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Development of Mongolia's Capital Market9 September 2011

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High level objectives for the MSE – LSE strategic partnership

• Successful development of the Mongolian capital market

• Establish Mongolian Stock Exchange as a world class exchange

operator

- with an attractive listing regime

- international standards

- liquid trading market

• Develop a long term sustainable business model for the

Mongolian Stock Exchange

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MSE Development Plan:

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Exploit market

potentialTo attract a flow of IPOs

and companies to the

market & create an

environment appropriate

for future privatisations

Business modelEnhancing MSE’s

business model to

generate new

revenues and develop

new products

Regulatory frameworkImplementing new rules and regulations that

meet international standards;

New technologyIntroducing MillenniumIT technology at

the trading, surveillance and post

trade levels of the exchange value

chain;

Knowledge transferTraining the market, regulators

and staff to help them achieve

better understanding of the

operations and functions of the

Mongolian capital market

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Improved Rules and Regulations

MSE

Rules & Regulations

MSE Listing rules

Trading rules

Membership rules

National legal

framework

Securities

Law

Companies

Act

Post Trade rules

Insider

dealing and

other criminal

laws

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Developing companiesExisting listed companies who failed to meet the

new listing standards

MSE – Enormous Potential

ExistingCurrent listed companies who meet

(or close to) the new listing

standards

New DomesticsExisting Mongolian companies

which decide to list on the

market

Appro

x.

mark

et

capit

alisa

tion $m

Repatriations Mongolia companies listed on another exchange who decide to

dual list on MSE

Approx. timing

State PrivatisationsSignificant state assets listed on MSE and LSEG for capital

raising

New LicencesSmall parcels of mining assets sold off by

Government

Foreign ListingsSiberian mining companies too small to list on

MICEX (or London) but wanting to raise further

capital. Success could establish MSE as a

regional exchange

Increasing the quality of the companies on the market is key to attracting new

investors. There are seven categories of companies that we will target

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New technology

Custodians

and

NomineesBroadcast

Market Information

Reuters, Bloomberg,

News media, etc.

MSE

Network

Trading, Clearing & Settlement

Depository / Share Registry

Surveillance

Local Broker

Remote

Broker

Foreign

Broker

Market

Surveillance

Mongolian Stock

Exchange

Settlement

Bank

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Introducing MillenniumIT

• MillenniumIT is a premier technology solutions provider serving the

global capital markets industry

• Its products currently power exchanges, depositories, brokerages and

regulatory bodies in the United States, Europe, Africa and Asia-

Pacific

• Millennium Exchange will power MSE’s trading platform and has a

superior technical performance, ultra low-latency and enhanced

functionality

• London Stock Exchange is using the same MillenniumIT technology to

power one of its premier platforms – SETS, where FTSE100 stocks are

traded

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Knowledge Transfer

• Academy of the London Stock Exchange is conducting a

broad range of Capital Market courses both in

Ulaanbaatar and London

• MillenniumIT is training staff and brokers on how to use

the system productively

• A Mongolia Desk is being setup at LSE to give MSE

employees an indepth exposure to financial markets in

London

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High level project milestones

Phase1

Move to T+3 and international risk

management standardsSGF and investor protection

Q1-Q2

Q2

Development of new listing rules

Market education

Corporate governance & transparency

Phase2

Go live

30 Nov

Membership rulesRemote Access for

international brokers

Timings are indicative

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Post trade and Listing

rules in detail

July August September October November December

T+ 3 Rule development Approval

30 Oct

Develop internal ops and procedures

inc. risk management

Develop market ops and procedures

inc. risk management

T+3 Go live

30 NovStaff and market training and

education

Roundtable

20 Sept

Draft listing rulesApproval

28 Nov

Options for existing listed companies Approval

28 Oct

Presentation to

companies and

advisors

Intr

oducti

on o

f T+3

New

Lis

ting R

ule

s

Timings are indicative

Roundtable

20 Oct

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Achieving the vision

Mongolian Stock Exchange will be:

• An attractive listing venue for companies and investors

- pool of quality domestic and international listed companies

- international standards of transparency and governance;

• Operating a liquid trading market

- range of trading products

- local and international brokers;

• Leading edge technology across the entire exchange value chain

• Offering competitively priced services, attractive to domestic and

international participants

• Operating a strong and robust business model with diversified

revenue streams and sustainable growth;

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Thank you!

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No representation or warranty, expressed or implied, is made or given by or on behalf of London Stock Exchange Group plc

(the “Company”) or any of its group undertakings or any of its or their respective directors or any other person as to the

accuracy, completeness or fairness of the information or opinions contained in this presentation and no responsibility or

liability is accepted for any such information or opinions.

The content of this presentation includes statements that are, or may deemed to be, "forward-looking statements". These

forward-looking statements can be identified by the use of forward-looking terminology, including without limitation the

terms "targets", "plans", "aims", "believes", "estimates", "anticipates", "expects", "projects", "intends", "may", "will" or "should"

and terms of similar substance or the negative thereof. Forward-looking statements include, without limitation, statements

relating to the following: (i) future capital expenditures, expenses, revenue, earnings, synergies, economic performance,

indebtedness, financial condition, dividend policy, losses and future prospects; and (ii) business management strategies and

the expansion or growth of the Company’s operations and/or that of the Mongolian Stock Exchange or any of its group

undertakings (“MSE”). By their nature, forward-looking statements involve risks and uncertainties because they relate to

events and depend on circumstances that may or may not occur in the future and may be beyond the Company’s ability to

predict, and readers are cautioned that any such forward-looking statements are not guarantees of future performance. The

Company's and/or MSE’s actual results and performance may differ materially from the impression created by the forward-

looking statements contained in this presentation. In addition, even if the results and performance of the Company and/or

MSE are consistent with the forward-looking statements contained in this presentation, such results and performance may not

be indicative of results and performance in subsequent periods. Important factors that could cause results and performance to

differ materially from those expressed or implied by forward-looking statements include, but are not limited to: changes in

economic conditions; changes in the level of capital investment; success of business and operating initiatives and

restructuring objectives; customers’ strategies and stability; changes in the regulatory environment; fluctuations in interest

and exchange rates; the outcome of litigation; changes in political and economic stability; government actions; and natural

phenomena such as floods, earthquakes and hurricanes. Other unknown or unpredictable factors could cause actual results or

performance to differ materially from those in the forward-looking statements contained in this presentation. The Company

undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new

information, future events or otherwise, except to the extent required by applicable law and regulation.

This presentation and its contents are confidential and should not be distributed, published or reproduced (in whole or in

part) or disclosed by recipients to any other person.