GC Access Break-out session Euroclear Collateral Conference, Tuesday, 13 May 2014

1. GC Access Break-out session Euroclear Collateral Conference, Tuesday, 13 May 2014

2. A market driven by new regulations Impact Themes Solvency & liquidity • High demand for high quality collateral and term lending • Capital cost Indemnifications • Repo market contraction? • LCR, NSFR, Leverage ratio • Counterparty exposure limits Basel III OTC Derivatives • Punitive capital charges for non CCP cleared OTC Derivatives • High demand for high quality collateral DF /EMIR Reducing systemic risk • Minimum haircuts • Increased transparency • Limits on cash reinvestment • Reduction Demand ? • Funding cost • Collateral velocity reduced? Shadow Banking Limit speculation • Tax on financial transactions • Requirement for reasonable expectation to borrow • Increased cost to borrow Short Selling/FTT Increasing settlement efficiency • Mandatory buy-ins • Penalty regime • Increased demand fails coverage CSDR

3. What about the future … ‘Repo and securitieslending are set to play an absolutely central role in the post-reformlandscape’ Quotefrom a speech given by Andrew Hauser, Head of Sterling Markets Division, Bank of England, and Chair of the Securities Lending and Repo Committee (At JP Morgan’sCollateral Management and Securities Financing Forum, March 27 2014, London)

4. GC AccessA new route to the market… Euroclear Offering Drivers Trends Fail Curing Market volume driven Securititeslending and borrowing Automatic Borrowing Collateral conversion GC Access Increasing need for high quality collateral (EMIR, Dodd Frank, Basel III) Opportunity Borrowing Reduced leverage & limiting regulation Investment Strategies (short selling, cheapest to deliver, ..) 4

5. GC AccessA new route to the market… Direct exposure on Euroclear Bank Borrowers Direct Custodian/Agency Street lending Exclusives GC Access Settlement driven Automatic Fail Driven lending … building on 30 + years of experience

6. Collateral conversion GC Access What’s in it for borrowers? • Focus on high quality collateral • Extension of existing autoborrow service • You borrow from Euroclear Bank at street levels • You pledge collateral to Euroclear Bank and authorize the unward pledge of the collateral to the lender • Limited number of collateral profiles • Collateralisation using TSL • We do the rest! • Status • Pilot activity started Q1 2014 • Gradually building lending supply

7. GC Access What’s in it for Lenders? • Generate additional lending revenues • The safest environment • Complementary to our Automatic fail-driven lending program • 30+ years of experience • Similar legal protection and set-up • Borrowercommunityalready in Euroclear Bank • No additional workload, we take care of everything • Benefit from Triparty collateral management without the need to be a Triparty specialist: we do the triparty set-up and instruct on your behalf • No additional costs

8. Pledge set-up benefits for borrowers • Pledge agreement • Transfer of collateral from the borrower to Euroclear Bank, and • From Euroclear Bank to the Lender • The borrower remains the legal owner of the collateral securities • Allows for unwind of the loan and recovery of collateral in default situations

9. Multiple lines of defence ensure the best lender protection … • Strict Borrower approval • Stringent borrower admission process • Specific GC Access credit line • Borrower default has no impact on you • Euroclear Bank guarantee (AA rated) covers all Borrower’s obligations • Loan unwind in case of Euroclear Bank default • Collateral in your name to protect against Euroclear Bank and Borrower default

10. GC Access Operational Flow

11. GC Access Loan arrangement Loan Arrangement • Contact the Desk via Bloomberg, email, or tel • gca@euroclear.com • gcaccess@bloomberg.net (bloomberg e mail) • 0032 2 326 42 20 • Send your locates or review pool availability • Daily confirmation of tradesend of day Pool Availability Borrower Request GCA Desk GCA Borrower Euroclear offer Loan Confirmation GCA Borrower GCA Desk

12. GCAccessLoan settlement – A pre-paid model Collateral Collateral Collateral 1 Pledge Pledge Pre-collateralisation of loan exposure Triparty FOP Triparty FOP Borrower Main Trading account EB Account Lender collateral account Loan Loan Loan 2 Once collateralised Loan generation Settlement Delivery FOP Euroclear BankTransit account Settlement Delivery FOP Lender Main Tradingaccount

13. Loan Management Corporate Actions • Automatic compensation of income proceeds, redemptions, mandatory corporate actions • A recall will be triggered if lenders wish to participate in a voluntary corporate action • Lenders to instruct a recall for meetings if they wish to elect Monitoring • Monitoring of • Corporate actions • Income proceeds GCA Desk Lender Main Account

14. Loan management Recalls Monitoring • Monitoring of • Settlement activity • Corporate actions GCA Desk Lender Main Account • Recalls are generated • Upon Lender request • When a Lender has an upcoming delivery instruction • For certain corporate actions • Recall periods T + 2 or T+1 (UK Gilts, US Treasuries)

15. Reporting 15

16. GC AccessHow to get started to borrow? • Confirm • Your agreement to the contractual documentation • GC Access Terms and Conditions • GC Access Operating Procedures • Yourreporting options • Agreewith EB on a dedicatedcredit line for GC Access activity • Agreewithcredit documentation • Creditletter • GC Access General Conditions • GC Access Collateral Agreement • GC Access Securities Borrowing Conditions

17. GC AccessHow to get started to lend? Register for the service by confirming: • Your agreement to the contractual documentation • GC Access Terms and Conditions • GC Access Operating Procedures • Your lender profile • Your lending cap • Your reporting options