Filiz KAYA Managing Director

ISE Settlement & Custody Bank Inc.

November 2, 2011 Seoul

Is the Central Clearing Agency of Turkish Capital Market.

As an Investment Bank, provides some unique

securities services as well as some banking facilities for the Turkish Capital Market participants.

Clearing and Settlement Agent for

Istanbul Stock Exchange (ISE) Turkish Derivatives Exchange (TURKDEX)

Official Custodian for Pension Funds

National Numbering Agency of Turkey

Takasbank,

Takasbank Has a Central Position in Turkish Capital Market

Government Banking Regulation

Supervision Agency Central Bank Capital Markets

Board

Banks Broker Firms

Central Registry Agency (CSD) TAKASBANK

Istanbul Stock

Exchange

Domestic Clearing & Settlement Service

Custody Accounts for Bonds & Cash Transfers

Turkish Derivatives Exchange

Funds

Cross-border Settlement& Custody

Service

Custody Accounts for Equities, ETF Shares

Market Participants

Regulatory Authorities

ICSDs

Main Services of Takasbank

1. Clearing and Settlement

2. Custody

3. Banking Services

4. National Numbering Agency

5. Organized Markets

6. Guarantee Fund & Collateral Management

Takasbank Fund Services

Clearing

Settlement

Custody

• Investment Funds

• Investment Trusts

• Private Pension Funds

• Exchange Traded Funds

Reporting services to:

Takasbank Interface for Institutional Investors

Institutional investors (mutual funds, private pension funds, investment trusts, ETFs) have direct link to Takasbank system.

These firms execute their operations online, real-time by using Takasbank interface.

Services to Mutual Funds

• Securities accounts in CRA for mutual funds’ portfolios.

• Online link to CRA. Custody service

• Equity settlement.

• Fixed-income securities settlement.

• Foreign securities settlement.

Settlement of securities in fund

portfolio

• Calculating the NAVs and unit prices

• Comparing the data declared by funds.

• Informing the difference to brokers and CMB.

Calculating NAV and unit price

• Reporting fund datas to Capital Market Board. Reporting

Services to ETFs

Creation and redemption of ETF shares.

Clearing and settlement of ETF shares traded in ISE.

Custody services: Securities accounts in CRA for fund portfolios.

On-line link to CRA for ETF transactions.

Clearing & settlement and custody services to multinational ETFs (e.g. GT-30 ETF traded both in ISE and ATHEX).

Service to Pension Funds

• Official Custodian for Private Pension Funds

Custody service

• Equity settlement

• Fixed-income securities settlement

• Foreign securities settlement

Settlement of securities in fund

portfolio

• Calculating the NAVs and unit prices

• Comparing the data declared by funds.

• Informing the difference to funds and CMB.

Portfolio value and unit share price control

• Reporting fund datas to Capital Market Board.

Reporting

Cross-border Settlement for Funds’ Portfolios

Takasbank gives also cross-border settlement service to local funds for the foreign securities in their portfolios (inc. shares and eurobonds).

Correspondent relationship with ICSDs (Euroclear) for foreign securities clearing & settlement.

PLATFORM

A platform enabling fund issuers to execute creation and redemption transactions of mutual fund shares among other platform members and their customers in an electronic environment. This platform also enables the settlement and custody of these transactions to be realized through Takasbank and Central Registry Agency system.

The Aim of the Platform

To create a fully automated and centralized fund distribution system.

To improve the Turkish fund industry and to expand national distribution channels.

To design a system similar to international samples like Fund/SERV (DTCC), FundSettle (Euroclear),Vestima+ (Clearstream).

Benefits Easy access to fund transactions and related informations through one

single platform

Investors will have the opportunity to choose among different alternative funds on a single platform

Solution for limited distribution channels of fund issuers and managers

Substantial reduction in operational costs and risks

A new generation distribution system for successful asset managers lacking widespread distribution channels. They can easily increase their market shares

Fund performances will become a more noticeable criteria in fund investment

No counterparty risk

Retail sales will increase

New transfer agents will enter into the market → more competitive fund industry

A new income source for market participants

Participants of the Platform

A web-based, on-line structure combines

all the parties in the industry; Fund Issuers, Fund Distributors, Institutional Investors, Takasbank, Central Registry Agency.

Members

Fund Issuers and Managers.

Distributors;

Banks,

Brokers,

Custodians,

Asset Management Companies

Structure of the Platform

Order Management Entry Routing Matching Reporting

Clearing and Settlement

Delivery versus Payment (DvP) Straight through Processing (STP) Gross settlement

Fund Information Database

Fund types

All types of funds

TURKISH ELECTRONIC FUND PLATFORM

Settlement

Custody

Orders

Central Registry Agency

Issuers

Capital Market Board

Reporting Database Fund Info.

Investors

TAKASBANK

Distributors

Investors

Issuers

Distributors

The Scheme of the Platform

Order Management Fund issuer/operator defines trading rules and price

information for their funds on the platform

They also transfer fund shares available for sale to their account held for the platform transactions

Fund distributer wanting to purchase a fund, sends the order to the platform via Takasbank screens or web service

After receiving the order, cash/fund share will be blocked and the issuer’s account will be checked.

The order will be matched if the account is available

In case of inadequate fund balance, depending on the fund

distributor’s request, order can be suspended or canceled.

Turkish Electronic Fund Platform

Central Registry Agency Securities Account

Fund Distributor

Cash TAKASBANK Cash Account

Cash

Shares Shares

Clearing&Settlement I

Fund Issuer

Delivery versus Payment

Straight Through Processing

In Takasbank → Cash accounts

In Central Registry Agency → Securities accounts

Clearing & Settlement II

TURKISH ELECTRONIC FUND DISTRIBUTION

General info

NAV per share

Asset allocation

Fund prospectus

Manager info

Periodical returns

Benchmark

Fund costs

Fund Issuer

Fund Database

Enter

Market Participants Investors Data Vendors Asset Managers Regulators

Report

Brokerage Fee Fund Issuer can set a general commission rate. Intermediaries can set a special commission rate by selection. Brokerage fee is paid through Takasbank system.

Membership Fee for Funds This fee will be collected in fund basis.

Membership Fee for Platform Members It is the fee that will be collected monthly from the platform

members.

Trade Commission On a percentage basis of brokerage fee It will be collected from the Fund issuer’s account Commission Rebate

In case of Fund issuer acts as a intermediary for fund distribution apart from its own fund, Takasbank commissions will be reduced at the rate of 50 %.

The Structure of Fee Procedure

The Way Forward

Integration of

the Turkey Electronic Fund Platform with the international fund platforms

THANK YOU !