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1

Domestic Funds Platform

“Enabling the funds industryfor the future”Cancún

21 May 2015

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Market size*(Q4 2014 ; in EUR trillion)

CAGR** 2009-2014Net of FX fluctuations

+%

Source: Investment Company Institution (ICI), EFAMA* Market size of mutual fund market in Assets under Management** Compounded Annual Growth Rate

1.3+8%

0.5

0.1

+16%

0.9+14%

0.1

+14%

0.8+13%

0.6+7%

Strong global growth in funds

10+8%12

+7%+8%

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Growth slowdown / impediments

• Reduced investor appetite (domestic and foreign)

• Regulatory concerns on investor protection

• Capital invested elsewhere, possibly overseas instead of domestically

Marketinefficiencies

• Heavy administration

• Duplication

• Complexity

• Increased risk

• Increased cost

• Lack of standardisation

• Lack of transparency

Ad-hoc« infrastructure »

• Supporting infrastructure developed ad-hoc

• Driven by Fund Managers, Distributors and Administrators

• No central nor neutral market utility

Fast-growingfunds market

• Driven by emerging or fast-growing middle-class

Fast growing markets have similar characteristics…

…and are at a stage where a central infrastructure can bring substantial benefits to

market participants!

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Emerging case for change

Source: Quotes from workshops with fund market participants

“Difficult and long validation and

reconciliation processes”

“No end-to-end process”

“Long periods of exposures until confirmation is obtained on unit

balances holdings”

“Need for structural improvement of the

market"

“Cash settlement decoupled from unit

settlement”

“Need for more scale and efficiency"

“Open up to international investors"

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A partnership of complementary strengths…

Local CSD

Euroclear

Funds expertise and know-how

Dedicated platform “instance” which can be customized to the local fund market’s needs

Hosting in Euroclear’s datacenter

Local operations Local client

relationship management

Integration into the local cash payment and regulatory systems

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…to provide a comprehensive service offering…

Order routing

Settlement

Distributor authorization

Register keeping

Reconciliation

Transfers

Corporate actions

Regulatory reporting

International access

Local language and terminology

Multiple communication protocols (channels and formats)

Business continuity on three aligned data centers

BUSINESS FUNCTIONALITIES

TECHNICAL FUNCTIONALITIES

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FundDistributors

Investors

Local cash payment system

Fund Managers

…integrated into the local funds market

(Third Party Administrator

s)

Local CSD