MTS Markets

Overview

24 April 2017 MTS Page 1

London Stock Exchange Group

Cap

ital M

ark

ets

Post Trade

Information

Services

Technology

Monte Titoli CC&G

RNS Proquote Historical & Reference Data Unavista Real Time Data

Hosting and Connectivity

Cash Equities

Derivatives LSE Derivatives IDEM IDEX

Primary Markets

MIV

MTA

AIM Italia

Main Market

AIM

Specialist Fund Market

Professional Securities Market

Fixed Income ORB ExtraMOT MOT

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MTS Overview of MTS Business Lines

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Cash

Interdealer cash

bond trading

BondVision

Multi-dealer-to-client

cash bond trading

BondsPro

USD denominated all-to-all

for corporate bonds

Repo

Interdealer order book

for repo contracts

Swaps

Dealer to client interest

rate swap products

Data

Real-time and historical

data products

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MTS Overview – B2B, B2C, Repo

MTS Cash

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MTS Interdealer Cash Markets are quote driven secondary markets with links to all major European depositories and central clearing houses providing full straight through processing

Trading functionality:

• Auto-matching of quotes – price and time priority algorithm automatically matches quotes of both counterparties

• Matching between orders (hit/lift) and quotes (bid/offer) – orders executed according to the time they are sent

• Mid price crossing – order book referenced to the MTS order book to determine a real-time mid price level at which orders are matched

• Parallel quoting – simultaneously enter a proposal for the same bond in benchmark segment (EBM) and domestic markets

Main order types:

• Two-way quotes

• Fill and Store orders – single sided quotes

• Fill and Kill orders

MTS Interdealer Cash Markets

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The DMO plays a central in the functioning of any interdealer electronic

government bond market:

MTS Interdealer Cash Markets –

The Role of the DMO

- Reduction of lines and concentration of liquidity in benchmarks

- Public issuance calendar

- Focus on fixed-coupon lines

- Repo facility

The DMO designates a regulated platform on which Primary

Dealers are required to fulfil their quoting commitments. The

DMO also requires the platform to provide all the necessary

reporting services needed in order to evaluate PD performance

and award incentive

- Privileged access to primary auctions

- Participation as lead managers in syndicated debt deals

- Non-competitive auctions

Incentives

Platform

Designation

Debt Management

Policies

MTS BondVision

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MTS BondVision – dealer-to-client

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Features:

- Extensive coverage of securities

- In-depth post-trade reporting and MIS

- Choice of trading models (RFQ and Click-to-Trade)

- Ongoing development of pre-trade analytic and data tools for credit

markets

MTS BondVision Instruments

MTS Page 10

Government Covered Bonds SSAs Financials Corporates

— All Euro-

denominated

government issues

— Central, Eastern

Europe (EUR,

USD)

— Czech Republic

(CZK)

— Denmark (DKK)

— Hungary (HUF)

— Norway (NOK)

— Poland (PLN)

— Sweden (SEK)

— UK Gilts (GBP)

— US Treasuries

(USD)

— Inflation linked

bonds

— Cedulas

— Obligations

Foncieres

— Pfandbriefe

— Other (e.g. Danish,

Dutch, Finnish,

Irish, Italian UK,

US covered bonds)

— EFSF

— EIB

— KFW

— EU

— Quasi-government

— Bank

— Financial Services

— Insurance

— Automotive

— Basic materials

— Consumer good

services

— Industrial

— Telecom

— Transport

— Utilities

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MTS Repo

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MTS Repo

MTS Repo is an order driven market delivering deep liquidity

for both cash investors and specific bond traders with fully

automated settlement and connectivity to clearing houses.

Benefits include:

— Deep liquidity for both cash investors and specific bond traders

— Extensive member and settlement network

— Choice of execution methods – click-to-trade and RFQ with chat functionality

— Comprehensive support for all repo contracts

— Regulated market (Italian Ministry of Finance, Banca d’Italia and Consob)

and OTC booking mechanism

— Consolidation of all trading activity into a single blotter

— Fully automated settlement and connectivity to clearing houses

— Sophisticated credit line management and intra-day credit control functionality

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MTS Swaps

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MTS Swaps

MTS Swaps is a dealer-to-client electronic platform for trading

€ & £ denominated Interest Rate & Overnight Index Swaps.

— A sponsored access model for Clients permitting anonymous trading

— A centralised, FCA-regulated platform

— Trading via RFCQ and click-to-trade protocols

— Connectivity to MarkitWire for post-trade processing, novation to CCPs

and reporting to SDRs

— A liquidity pool provided by Dealers supporting the platform from launch

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MTS BondsPro

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MTS BondsPro

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MTS successfully completed the acquisition of Bonds.com in May 2014.

— Protocol – MTS BondsPro is an All-to-All limit order book with click-to-trade

functionality and firm pricing

— Universe of Bonds – US and European IG and HY corporate bonds issued in USD

– c13,000 bonds priced every day

— Anonymity – MMI is a FINRA broker dealer acting

a riskless principle and is counterparty to every trade

— Members – Over 200 Dealer and +350 buy-side accounts

— Access & Connectivity – FIX 4.4 API, Bloomberg TOMS/

ETOMS, OMS/ EMS solutions or native GUI

— Fixed Income Strategy – MTS is now a global facilitator

of electronic fixed income trading

MTS Data

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MTS Data

— All data is from MTS Cash – 18 government bond markets

— Over 1,100 bonds

— Over 100 unique counterparties

— All generating around 30,000,000 executable prices each day

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MTS Data – Products

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Product Description Users or Usage

MTS Real-Time The global investment community.

MTS Cash order book: 5 aggregated

levels of depth pre-trade; post-trade

with price and size.

MTS Historical

Used by Central Banks, Researchers, Investors,

Academics, etc. Used in the ECB working

paper series and daily Euro area yield curve.

Over 11 years of MTS Cash and

Repo data: tick-by-tick, trade-by-trade

data, daily trading summaries.

MTS Reference Prices Banks, Asset Managers, Administrators,

Central Banks, Clearing Houses, etc.

Official open and close prices from

MTS Cash.

MTS Live MTS Cash participants only.

Low latency pre-trade, tick-by-tick

pricing service. Post-trade from

Q3 2015.

Debt Securities

Markets – General

Remarks

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Debt Securities Markets at a Glance

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Core EU Other EU Other Gov

(ex-US)

SSA

(EU)

Credit

Issuers Few Few Many Many Very Many

Scale Large Medium Mixed Mixed Mixed

Frequency High High Mixed Low Low

Instruments Few Few Few Many Very Many

Standardisation High High Low High Low

Rating High Mixed Mixed Mixed Mixed

PDs Yes Yes (ish) No (ish) No No

CCP Yes Mixed No No No

Mkt Structure D2D / D2C D2D / D2C n/a n/a n/a

Electronification >50% <50% Low Low Low

Disclaimer

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Disclaimer: Information in this publication may or may not have been provided by MTS S.p.A. and/or its group undertakings, and/or the individual authors (each a “party” and

together the “parties”), but is made available without responsibility on the part of the parties. No action should be taken or omitted to be taken in reliance upon information in this

publication and the information is not offered as and does not constitute professional, financial or investment advice on any particular matter and must not be used as a basis for

making investment decisions. None of the parties accept any liability for the results of any action taken or omitted on the basis of the information in this publication. It is in no way

intended, directly or indirectly, to invite or induce you to engage in any investment activity or 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 circumstance. None of the parties make any representations or warranties of any kind in

relation to this publication and no responsibility is accepted by or on behalf of the parties for any errors, omissions, or inaccurate information. Third party advertisements are

clearly labelled as such and none of the parties endorse or are responsible for the content of any third party advertisement in this publication or otherwise. MTS, EuroMTS and

their logo are registered trade marks of MTS S.p.A.. Other logos, organisations and company names referred to may be the trade marks of their respective owners. No part of

these trademarks, or any other trademark owned by MTS S.p.A. or its group undertakings can be used, reproduced or transmitted in any form without express written consent by

the owner of the trademark. © May 2014, MTS S.p.A., via Tomacelli 146, 00816 Rome

MTS Cash: The Government Bonds Electronic Wholesale Market, cash segment (otherwise known as MTS Italy) and The Electronic Market of Non-Government Bonds and Securities Issued by State Participated International Bodies (otherwise known as MTS Corporate) are both regulated markets operated by MTS S.p.A. under the supervision of the Ministry of Economy and Finance, Bank of Italy and Consob; EuroMTS, MTS Austria, MTS Czech Republic, MTS Germany, MTS Greece, MTS Hungary, MTS Ireland, MTS Israel, MTS Netherlands, MTS Portugal, MTS Slovenia, MTS Spain, MTS UK and MTS Prime are all Multilateral Trading Facilities operated by EuroMTS Limited under the supervision of the Financial Conduct Authority in the United Kingdom; MTS France is a Multilateral Trading Facility operated by MTS France S.a.s. under the supervision of Autorité des marchés financiers (AMF); MTS Belgium, MTS Denmark and MTS Finland are all Multilateral Trading Facilities operated by MTS Associated Markets S.A. under the supervision of the Financial Services and Markets Authority (FSMA) in Belgium. Please note that MTS Associated Markets S.A. is not part of the London Stock Exchange Group plc. MTS Repo: The Government Bonds Electronic Wholesale Market, repo segment (otherwise known as MTS Repo) is a regulated market operated by MTS S.p.A. under the supervision of the Italian Ministry of Treasury, Bank of Italy and Consob; Agency Cash Management (ACM) is a Multilateral Trading Facility operated by EuroMTS Limited under the supervision of the Financial Conduct Authority (FCA) in the United Kingdom. BondVision: BondVision, the Regulated Wholesale Market in Government Bonds, is a Regulated Market operated by MTS S.p.A. under the supervision of the Ministry of Economy and Finance, Bank of Italy and Consob; BondVision MTF is a Multilateral Trading Facility operated by MTS S.p.A. under the supervision of Consob; BondVision UK is a Multilateral Trading Facility operated by EuroMTS under the supervision of the Financial Conduct Authority (FCA) in the United Kingdom; BondVision US is an Alternative Trading System operated by MTS Markets International Inc., under the supervision of the Financial Industry Regulatory Authority, Inc. (FINRA) and the U.S. Securities and Exchange Commission (SEC). MTS SWAPS is a Multilateral Trading Facility operated by EuroMTS under the supervision of the Financial Conduct Authority (FCA) in the United Kingdom. MTS Bonds.com is an Alternative Trading System operated by MTS Markets International Inc., under the supervision of the Financial Industry Regulatory Authority, Inc. (FINRA) and the U.S. Securities and Exchange Commission (SEC).