�9-,1;-5��141;-,�

�65;)+;�,-;)13:���1)5)��1//15:�,1)5)01//15:�+9-,1;-5�+6�<2��� ��������� ������

��

�65:<3;15/�15�+9-,1;�91:2�4)5)/-4-5;�;6�:<7769;�;0-�,-=-3674-5;�)5,�;9)5:.694);165�6.�+9-,1;�

,-7)9;4-5;:�15�-5-9/@�;9),15/�

���<1,-�;6�#69;.6316��6479-::165�

�� �$�)5,�;0-�5->�+0)33-5/-:�.69�+6446,1;@�91:2�4)5)/-4-5;���"!��5-9/@�&9),15/�%���D::-3,69.����;0��-+-4*-9�����

�1)5)��1//15:���19-+;69�

2

�/-5,)�• (0);�1:�#69;.6316��6479-::165�)5,�>0@�1:�1;�9-3-=)5;�<5,-9�� �$��

• �13);-9)3�)5,� <3;13);-9)3��"7-9);165)3�+65:1,-9);165:�

• �13);-9)3�)5,� <3;13);-9)3���-5-.1;:�)5,�$1:2:�

3

(0@�#69;.6316��6479-::165�

4

•  $-,<+-�+65;91*<;165�;6>)9,:�� �$�;09-:063,��•  �):0�67769;<51;@�+6:;��91:2��15=-:;�15�-5-9/@�)::-;:��15;-95)3�318<1,1;@�+91:1:�

•  $-,<+-�4)9/1515/�9-8<19-4-5;:�•  $-,<+-�+9-,1;�-?76:<9-�•  �-::�;9),-:��3-::�67-9);165)3�>692��91:2��:@:;-4:��7-673-��;14-�•  $-/<3);69@�+)71;)3�•  &-9415);165��=63<5;)9@�69�.69+-,��•  '5,-9�� �$���

•  "7;141:);165�6.�*13);-9)3�� )?141A-�<:-�6.�+9-,1;�315-:�>1;015�<5:-+<9-,�;09-:063,:�

•  $-,<+;165�6.�+):0�6<;�,<-�;6�4)9/1515/��"&��)5,�+3-)915/��•  "7-9);165)3�9-:6<9+-:�)5,�;14-��9-769;15/�9-8<19-4-5;:�

$-):65:�;6��6479-::�,<-�;6�� �$�

5

%@:;-41+�)5,�565�:@:;-41+�73)@-9:�

Prop%trading:%Analyze%compression%twice%per%year%%

Opera7onal:%repor7ng%requirements%

Clearing%

Margin�%

OTC%Threshold%

No7onal�% Credit�%

#"$&�"��"��" #$�%%�"!�(��&��%��&��

6

(0);�1:�#69;.6316��6479-::165�

7

Less trades “Buys” Less trades “Sells”:

LESS NOTIONAL

LESS USE OF THE EMIR

THRESHOLD!!!

Thousands of trades “Buys” Thousands of trades “Sells”

“Equivalent” all or within “Tolerances”:

P/L: unrealized is cashed in or out

Credit exposure Overall volume / zero Volume by time buckets Dates: Delivery, Start, End, Strike, Payment Underlying physical / financial: ie NBP Gas

Before After

%;-7:�;6�#69;.6316��6479-::165�

8

Agree%Internally%

Agree%with%counterparty%

Trade%matching%

Valua7on%

Nego7a7on%

Termina7on%

9

My%Company%

Front%Office%

Credit%Risk%

Legal%

Informa7on%Technology%

Treasury%Backoffice%

Finance%

Opera7ons%(physical%delivery)%

Market%Risk%

����&�$����!�� '�&���&�$���

�"(�&"��

10

#69;.6316��6479-::165�

11

•  �13);-9)3��6479-::165���19-+;3@��•  <3;13);-9)3��6479-::165��

– &9167;14)��&91$-,<+-C���,-5;1.1-:�4);+015/�,-)3:�;6�+36:-�>1;015�;63-9)5+-:��&-9415);165�

•  <3;13);-9)3�E#9-�+6479-::165F��– "=6=1:C���,,�)�;9),-�;6�)+01-=-�76:1;165��36+2�)5,�;6�9-,<+-�;0-� ; �>1;015�;63-9)5+-:���-::�+9-,1;�91:2�*<;�56�;-9415);165��

%6<9+-:��>>>�;9167;14)�+64���>>>�6=6=1:�+64�

12

My%Co.%

%%%%

%%

%%

%%%%

%%

%%

%%

Cpty.%

%%%%

%%

%%

%%%%

%%

%%

%%

Bilateral%

13

Cpty.%

%%%%

%%

%%

%%%%

%%

%%

%%

Cpty.%

%%%%

%%

%%

%%%%

%%

%%

%%

Cpty.%

%%%%

%%

%%

%%%%

%%

%%

%%

Cpty.%

%%%%

%%

%%

%%%%

%%

%%

%%

My%Co.%

%%

%%

%%

%%

%%%%

%%

%%

%%

Mul7lateral%service%

Same%Day,%Time%

%“Place”,%Rules,%Engine%

Mul7lateral%

14

Step Bilateral TriReduce® Ovovis®

1-Agree terms with Counterparty � ☕

Standard terms ☕

Standard terms 2- Agree terms within my Company �

� �

3- Trade matching � ☕ Engine matches

☕ Triangles, no match

required 4- Valuation � �

MtM as given ☕

Engine: price, volume, value

5- Negotiation � Win-Lose, (W-W?)

☕ Win-Win

☕ P/L neutral

6- Documentation � ☕ Standard

☕ Standard: adds trade to simplify, no termination

6- Termination � ☕ Standard

�

15

Benefits'/'Risks' Bilateral' TriReduce®' Ovovis®'

1S%EMIR%Benefit%

“Flexible”%tolerances,%choose%who,%what%

%vs%Mul7ple%

%Mix %(EMIR%value%up%if%

not%terminated)%

2SPar7es%in%/%out%

3S%Confiden7ality%

4S%Benefit%Margin%Credit,%Opera7on%

5S%Profits%or%Losses%

WinSLose% WinSWin% Neutral,%then%Bilateral%

6S%Resources%

7S%Time%to%termina7on%(not%working%hours)%

Agree,%Nego7a7on%Engine?%%

Plus%opera7ons%

2S6%days%%

Plus%opera7ons%

2S3Sdays%%Plus%Nego7a7on%Plus%opera7ons%

8S%Cost% Internal%plus%Internal%

Cash%out%plus%Internal%

Cash%out%plus%Internal%

%<44)9@�

•  � �$�147)+;�+)5�*-�4)5)/-,���13);-9)33@��4<3;13);-9)3�69�41?�

•  (692�;6/-;0-9���– (1;015�69/)51A);165:�E;-)4:F�– �+96::�69/)51A);165:��:-9=1+-�796=1,-9:��)5,�*-;>--5�*13);-9)3�)99)5/-4-5;:��

•  �1/�71+;<9-�–  �"7;141A-�<:-�6.�;09-:063,�)5,�+3-)915/���E�):0�1:��15/F��15=-:;�)5,�:<9=1=-�

16

17

�1)5)��1//15:���19-+;69�

,1)5)01//15:�+9-,1;-5�+6�<2��

�9-,1;-5��141;-,��� ��������� ������>>>�+9-,1;-5�+6�<2�

&0)52�@6<��

�4769;)5;�+65:1,-9);165:�•  Disclaimer: To the extent permitted by law, neither Crediten Ltd nor its presenters will be

liable by reason of breach of contract, negligence or otherwise for any loss or consequential loss occasioned to any person acting omitting to act or refraining from acting in reliance upon the course material or presentation of the course or, except to the extent that any such loss does not exceed the price of the course, arising from or connected with any error or omission in the course material or presentation of the course. Consequential loss shall be deemed to include, but is not limited to, any loss of profits or anticipated profits, damage to reputation or goodwill, loss of business or anticipated business, damages, costs, expenses incurred or payable to any third party or any other indirect or consequential losses. Except as expressly and specifically provided in this agreement: you assume sole responsibility for results obtained from the use of the training and for conclusions drawn from such use. Crediten Ltd shall have no liability for any damage caused by errors or omissions in any information, instructions or scripts provided to Crediten Ltd by you in connection with the training, or any actions taken by Crediten Ltd at your direction; and all warranties, conditions and other terms implied by statute or common law are, to the fullest extent permitted by law, excluded from this agreement.

•  Nothing in this agreement excludes or limits the liability of Crediten Ltd for: death or personal injury caused by the Crediten Ltd's negligence; fraud or fraudulent misrepresentation; or any other liability which cannot lawfully be excluded or limited.

•  Intellectual property rights: all Intellectual Property Rights and all other rights in the training materials shall be owned by Crediten Ltd.

•  CREDITEN LIMITED COPYRIGHT 2012 �

18