lse .general presentation

Listing on the London Stock ExchangeMarch 2011

2

Overview

• The Group• Peers • Investors• Regulation• Liquidity and Performance

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London Stock Exchange Group

Partnerships / Joint Ventures:

Diversified international exchange business with new partnerships evolving

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We operate the largest and most liquid equities market in Europe

0

500

1,000

1,500

2,000

2,500

3,000

LSEG NYSEEuronext(Europe)

DBAG SIX BME NASDAQOMX Nordic

(US

D b

n)

Domestic market capitalisationof European exchanges as at 30 Nov 2010

Average daily traded value (ADTV) and number of trades in shares (as at 30 Nov 2010)

Source: World Federation of Exchanges

• 2,100 UK-incorporated companies are currently listed/quoted on our London markets, sharing an aggregate market cap close to USD 3 trillion

• Close to 600 international companies are currently listed/quoted on our markets, with aggregate market cap reaching nearly USD 3 trillion.

• With close to 3,000 companies listed/quoted on its markets and over 500 member firms, the London Stock Exchange Group operates one of the most liquid cash equity marketplaces globally.

• During 2010, an average of nearly USD 10bn worth of shares were traded daily on the LSEG’s markets, more than any other exchange in Europe.

0

2,000

4,000

6,000

8,000

10,000

12,000

LondonStock

Exchange

NYSEEuronext(Europe)

DeutscheBorse

BMESpanish

Exchanges

SIX SwissExchange

NASDAQOMX

Noridic

US

D (

m)

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

Nu

mb

er

of t

ran

sact

ion

s

Trading Volume

Transactions

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London Stock Exchange is the most international exchange in the world1

(1) By number of international companies admitted to trading. Source: London Stock Exchange statistics

Overview of countries with companies admitted to London Stock Exchange primary markets in 2011

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London Stock Exchange is a global leader in IPOs

0

100

200

300

400

500

600

700

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010LSE NYSE Euronext (US) Hong Kong

Deutsche Borse NYSE Euronext (Europe) Shanghai

Source: World Federation of Exchanges

Number of IPOs

7

204850

8295

LSE NYSE ENXT NASDAQ DBAG

NORTH AMERICA

54

238 4 1

LSE DBAG NYSE NASDAQ ENXT

355779

191

231

LSE NYSE ENXT DBAG NASDAQ

EMEA

103

5 1

LSE NYSE DBAG

RUSSIA AND CIS

151

265 13

NYSE LSE NASDAQ ENXT

SOUTH AMERICA

103 97

6 2

NYSE LSE DBAG ENXT

ASIA INDIA

Source: relevant exchange websites


Total number of companies admitted to trading as at 31 August 2010

8


Source: Bloomberg

-

200

400

600

800

1,000

1,200

1,400

1,600

Basic Materials Communications Retail Energy Financial Funds Industrial

US

Db

n

London Stock Exchange

NYSE Euronext (Europe)

Deutche Bourse

Hong Kong SE

Comparison of market capitalisation of listed issuers, by sector

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We provide access to the world’s largest pool of international equity assets*

4686

122139173

London New York Frankfurt Paris HK

365093

330658

London New York Paris HK Frankfrut

Banks

Investment advisers

263 252

82 76

London New York HK Paris

Pension Funds & insurance

*Based on international equity AUM in key financial centres. Source: Ipreo, Dec 2010

International equity AUM in key financial centers

Total international equity AUM by type of investor (USDbn)

LondonUSD 1.15trillion

New YorkUSD 1.04trililon

ParisUSD 278bn

FrankfurtUSD 171bn

Hong KongUSD 179bn

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London Stock Exchange offers a choice of routes to market, equally to UK and international companies

Commercial Companies equity shares and funds

Commercial Companies all types of shares

Depositary receipts

Options, warrants, derivatives and fixed income

Growth Companies

Flexible route for DRs wishing to use domestic accounting standards

Private equity, hedge funds, complex and single strategy funds

Main Market

OTHER

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Every company admitted to our primary markets can increase their visibility by using our brand marks

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Main Market – key listing requirements

• Compliance with the Listing Principles (LR 7)• Appointment of a sponsor• 75% of the business to be supported by a revenue

earning track record• Control over the majority of the entity’s assets• Unqualified working capital statement• Combined Code (only UK companies, non-UK

companies have to state compliance with their domestic corporate governance and explain any substantial differences)

• Prospectus approved by the UKLA• Minimum 25% shares in public hands*• Minimum market capitalisation £700,000• 3 years of audited financial information (or such shorter

period since company has been in operation)• Free transferability of securities • Working capital statement covering 12 months (for

commercial companies issuing shares only) • Compliance with the London Stock Exchange's Admission

and Disclosure Standards

(In addition to…)

* FSA will consider lower free float if it satisfied that there is sufficient liquidity in market

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Key regulatory comparisonsLondon Stock Exchange

London Stock Exchange - DR

HKSE NYSE Euronext DBAG

Corporate governance

UK Corporate Governance Code (mandatory for

Premium listing only)

Domestic governance code

appliesn.a

Depending on the jurisdiction

German Corporate

Governance for German inc.

issuers

Free Float 25%1 25%1

Different criteria depending on the size of the

company

25% 25%

Accounting

standard IFRS or equivalent2

IFRS or equivalent2 [local

GAAP on PSM]US GAAP or IFRS

IFRS or equivalent2

IFRS or equivalent2

Accounts

3 years audited accounts

(or such shorter period the company was in operation) 3


(or such shorter period the company was in

operation) 3




Working Capital statement

Yes Not requiredCash Flow Statement

No No

Sponsor Only for Premium

listingNot required

Compliance Adviser

Not required Listing Agent

Remuneration

UK Corporate Governance Code (mandatory for

Premium listing only)


applies

Domestic governance code applies

Depending on jurisdiction


applies

Reports Interim (Half yearly)

AnnualAnnual

Quarterly

Interim

Annual

Interim (unaudited)

Half yearly

Annual

Half yearly

Annual

Investor Conference

Competent Authority

UKLA UKLASecurities and

Futures Commission

UKLA, AFM, AMF, CBFA,

CMVMBaFIN

Inside information

Inside information must be disclosed to the market without delay

The exchanges represented here are only a sample of our competitors 1FSA will accept lower free float if its is satisfied that there will be sufficient liquidity in the market 2Japan and the US, China, India, South Korea and Canada 3or such shorter period the company was in operation (companies pursuing Premium listing are required to show a full three year track record)

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Indicative IPO transaction timeline Timeline +6 months +3 months +1 month

Company Transaction structure and board preparationsDiscussions with existing shareholders Due diligence

Engage with sponsor (if applicable)

Financial Tax planning

IFRS preparation (if needed)

Audit

Financials and valuations

Working capital statements

Long form financials

Forecasts and offer size agreed

Legal Suitability and due diligence

Admission Document draftingUKLA approval stage

Early engagement with the UKLA

Memorandum and articles of association / underwriting agreement/ Board minutes/ depositary agreement and other documents

Investors and distribution

Road show presentation and business case Road show

Test marketing

Preparation of research Pre marketing Bookbulding

Pricing model

PR Company profile and story


Preliminary discussions and ongoing support

Pathfinder ready

Prospectus

approved

Pricing

Admission to trading

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London Stock Exchange offers a choice of trading platforms, equally to UK and International companies

• Powered by the same technology

• All Member firms have unrestricted access to all trading services

• Services designed in cooperation with trading community to offer optimum liquidity potential

Platform Type

Nov 10 Value traded (USDm)

Nov 10 Volume traded

Average transaction value (USD)

Type of securities on the platform

SETS Order Book 168bn 11.6m 42k Shares

IOB Order book 23bn 462k 50k Depositary Receipts

SETSqx Auction driven platform

2.2bn 52k 42k Shares

SEAQ Quotation Service

2bn 188k 10k Shares

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Standard deviation in performance of key indices

London Stock Exchange offers a stable investment pool for companies listed on our markets

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2008 2009 2010

Sta

nd

ard

dev

iati

on

FTSE 100

EmergingMarkets

DevelopedMarkets

0

50

100

150

200

250

300

350

Dec

-04

Apr

-05

Aug

-05

Dec

-05

Apr

-06

Aug

-06

Dec

-06

Apr

-07

Aug

-07

Dec

-07

Apr

-08

Aug

-08

Dec

-08

Apr

-09

Aug

-09

Dec

-09

Apr

-10

Aug

-10

Ind

ex, (

1 Ja

n 2

005=

100)

FTSE 100

LSE Emerging

MSCI Emerging

Index performance

LSE Emerging index represents the performance of all emerging stock on the London Stock Exchange. Source: LSE calculation and

Bloomberg

Return on investment in LSE listed emerging market companies is higher than compared to emerging market companies on other markets

Securities trading on the LSE have significantly lower volatility compared to other markets.

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0.20%

0.20%

0.19%

0.19%

0.17%

0.15%

0.15%

0.13%

0.12%

0.08%

0.06%

0.05%

Essar Energy

NLMK

Novatek

Gazprom

Rosneft

Kazakmhys

Surgutneftegas

Sistema

Severstal

Fresnillo

ENRC

VTB

London Stock Exchange Group is a leader in trading emerging market securites

Source: Bloomberg, Dec 2010

Median Bid-Ask Spread for emerging market securities

On the London Stock Exchange issuers from emerging markets enjoy comparable liquidity with the world’s most liquid securities.

0.12%0.08%0.08%

0.07%0.07%

0.06%0.06%0.06%0.06%0.06%

0.05%0.05%0.05%

0.04%0.03%

XSTRATA

STANDARD CHARTERED

SABMILLER

BHP BILLITON

BARCLAYS

BAT

VODAFONE

ASTRAZENECA

BP

ANGLO AMERICAN

RIO TINTO

ROYAL DUTCH SHELL

HSBC

BG GROUP

LLOYDS

Median Bid-Ask Spread for FTSE 100 Securities

SETS traded

IOB traded

Allocation of a security on IOB or SETS does not significantly affect its liquidity

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IOB - Dedicated DR trading platform

Clearing and Settlement: • Our relationship with LCH.Clearnet, x-clear and Euroclear UK and Ireland ensure that trades are cleared and settled quickly and cost effectively

•Central Counter Party (CCP) service is extended to all SETS securities

•All IOB securities for which market participants request the service have the CCP service enabled

• Member firms can use a netting services with a clearing house to have their trading fees reduced and therefore enhance liquidity

London Stock Exchange operates the International Order book - a dedicated Depositary Receipt trading platform.

Benefiting from common underlying technology infrastructure to SETS, the IOB provides a focussed arena for the trading of DRs with a market model and trading hours aligned with its distinct trading membership base.

In addition DRs are also traded on Turquoise the London Stock Exchange operated MTF

IOBContinuous Trading Model

Market open

Openingauction

Closingauction

Ordermanage-

ment

07:00 08:00 08:15 15:30 15:40 17:15

Continuous trading

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London Stock Exchange enables companies listed on our markets continuous access to capital markets

• Institutionally focussed domestic and international investor base investing through the London Stock Exchange creates a financing source for companies throughout the economic cycle.

•Companies across the London Stock Exchange’s markets raised a record USD 137 billion in new and further issues during the course of 2009.

• Recovering investor sentiment has seen over USD 10 billion raised by 55 IPOs, between January and August 2010.

Source: London Stock Exchange Statistics

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2007 2008 2009 YTD 2010

Mon

ey r

aise

d in

Fut

her

issu

es (U

SDm

)0

5,000

10,000

15,000

20,000

25,000

30,000

Mon

ey r

aise

d at

IPO

s (U

SDm

)

Money raised in further issues Money Rasied at IPO

Money raised by issuers listed on the London Stock Exchange

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Performance of companies admitted to trading over the last 12 month period

Performance of companies recently admitted to trading on the London Stock Exchange and other exchanges

80

85

90

95

100

105

110

115

120

t t+10 t+20 t+30 t+40 t+50 t+60 t+70 t+80 t+90 t+100 t+110


NYSE Euronext (US)

Deutsche Borse

NYSE Euronext (Europe)

t- admission date

Source: Bloomberg, Oct 2010

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London Stock Exchange remains the centre of choice for international companies


NYSE Euronext London

DBAG HKSE

Choice Choice of markets for issuers

Limited choice Choice of markets for issuers

No choice

Investment pool Investment pool USD 1.8 trillion*

Investment pool USD 445 billion*



FTSE indexation FTSE UK series inclusion (including FTSE 100)

No indices inclusion Not flagship indices No indices inclusion

Trading services platforms

Tiered trading services to provide maximum visibility and liquidity

Access to a Universal Trading Platform – reduced visibility

n/a No variety of trading services

Member firms Admitted to trading platform with 400 member firms

Admitted to trading platform with 221 member firms (not all of which have access to all ENXT markets)

Admitted to Xetra trading platform

Peer comparisons Peer comparison No other companies on the market

Limited comparison Only two international companies on the market in different sectors

*Source: Ipreo, Sept 2010

Conclusions

The London Stock Exchange is the pre-eminent global listing centre and the most international exchange1 in the world, with close to 600 international companies from over 70 countries, listed and traded on its markets.

The London Stock Exchange offers a wide choice of routes to market. The choice of markets is open equally to UK and international companies, and differentiated trading platforms offer tailored solutions to maximise liquidity and investor participation.

We provide cost-efficient access to the world’s largest pool of international equity assets. Over USD 1.85 trillion of equities are managed out of London, with USD 1 trillion invested in international equity assets, more than any other major financial centre.

With close to 3,000 companies quoted on its markets and over 500 member firms, the London Stock Exchange Group operates one of the most liquid equity marketplaces globally.

1by number of international companies admitted to trading 2Source: IPREO Sept 2010

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Contacts

Region Relationship Manager Telephone email

UK Bruce RayfieldMark FahyMark Russon

+ 44 20 7797 4377+ 44 20 7797 6396+ 44 20 7797 7397

[email protected]@[email protected]

Americas & Israel Graham Dallas +44 20 7797 4055 [email protected]

Asia Pacific Jane Zhu (HK)Julia Wang (Beijing)Yi Xie (London)

+852 3555 6390 +86 10 5833 2202 +44 20 7797 4743

[email protected]@londonstockexchange.com [email protected]

Continental Europe Luca Peyrano

+44 20 7797 3340

[email protected]

India, Pakistan, Middle East and Africa

Ibukun AdebayoRichard Webster-Smith

+44 20 7797 1085 +44 20 7797 1058

[email protected]@londonstockexchange.com

Russia and CIS Jon EdwardsMaksim Kondratjuk

+44 20 7797 1599 +44 20 7797 4307


Primary market account managers

Product management and development Market Product Manager Telephone email

Listed/Regulated Markets Joanne Dutton Darko Hajdukovic

+44 20 7797 3622 +44 20 7797 3306


AIM Marcus Stuttard +44 20 7797 3364 [email protected]

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DisclaimerThis document has been compiled by the London Stock Exchange plc (the “Exchange”). The Exchange has attempted to ensure that the information in this document is accurate, however the information is provided “AS IS” and on an “AS AVAILABLE” basis and may not be accurate or up to date. The Exchange does not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of the document or any of the information in it. The Exchange is not responsible for any third party content which is set out in this document. No responsibility is accepted by or on behalf of the Exchange for any errors, omissions, or inaccurate information in the document.No action should be taken or omitted to be taken in reliance upon information in this document. The Exchange accepts no liability for the results of any action taken on the basis of the information in this document. All implied warranties, including but not limited to the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement, compatibility, security and accuracy are excluded by the Exchange to the extent that they may be excluded as a matter of law. Further, the Exchange does not warrant that the document is error free or that any defects will be corrected.To the extent permitted by applicable law, the Exchange expressly disclaims all liability howsoever arising whether in contract, tort (or deceit) or otherwise (including, but not limited to, liability for any negligent act or omissions) to any person in respect of any claims or losses of any nature, arising directly or indirectly from: (i) anything done or the consequences of anything done or omitted to be done wholly or partly in reliance upon the whole or any part of the contents of this document; and (ii) the use of any data or materials in this document.Information in this document is not offered as advice on any particular matter and must not be treated as a substitute for specific advice. In particular information in the document does not constitute professional, financial or investment advice and must not be used as a basis for making investment decisions and is in no way intended, directly or indirectly, as an attempt to market or sell any type of financial instrument. Advice from a suitably qualified professional should always be sought in relation to any particular matter or circumstances.The contents of this document do not constitute an invitation to invest in shares of the Exchange, or constitute or form a part of any offer for the sale or subscription of, or any invitation to offer to buy or subscribe for, any securities or other financial instruments, nor should it or any part of it form the basis of, or be relied upon in any connection with any contract or commitment whatsoever.London Stock Exchange and the London Stock Exchange coat of arms device are registered trade marks of London Stock Exchange plc. Other logos, organisations and company names referred to may be the trade marks of their respective owners.

© October 2010London Stock Exchange plc

10 Paternoster SquareLondon EC4M 7LS

Telephone +44 (0)20 7797 1000www.londonstockexchange.com

lse .general presentation

Economy & Finance