Diversifications by CSD in China

Progress and Initiatives

Member Presentation for the ACG 14 General Meeting

December 3, 2010 Mumbai, India

SHEN BingChina Securities Depository and Clearing Co. Ltd

Contents Diversification on the Rise Rationale behind CSD’s Diversification Progress & Initiatives—SD&C's Perspectiv

e Opportunities and Challenges

Diversification on the rise DTCC's Services Spectrum

Asset Service Global Corporate Actions OTC Derivatives Wealth Management Insurance & Retirement

Euroclear Services EMX Message System Funds Settlement Stock Loan data Asset Servicing Proxy voting Securities Lending and Collateral managem

ent NSDL's Value-added Services and other Activities

Lending and Borrowing Tax information National Skills Registry

Diversifications by CSD are clearly on the rise.

Rationale behind CSD’s Diversification Incentives for Creating New Market and New Services

A relatively mature market for traditional depository and settlement services

Increasing pressure for lower price and costs Possible leverage on CSD’s resources and skills

Market Demand and Regulatory Requirement Diversifying customer needs Development and innovations of financial products and

trading mechanism Changing regulatory environment

Value for Participants and Customers High efficiency and service level Lower cost for market participants Safety of assets and information

Rationale behind CSD’s Diversification

Value proposition is key for successful diversification.

Progress & Initiatives – SD&C's Perspective

There are still many diversifying opportunities in a developing market.

Characteristics of SD&C's CSD Services Fully Dematerialized Securities Book-entry Sys

tem Providing STP Depository and Settlement Services

A CSD that is highly integrated with trading and clearing systems

A CSD that also Perform Registration Functions

SD&C’s Funds Services Established in 2003

Market share of 30%

Potential New Products to Cover

Collateral Management Initiative

Increasingly used Pledge Services

Collateral Management Services

Information & Data Services Initiative

Statistics and Data Services

Notary Services

Securities Industry Data Warehouse

IT Infrastructure Support for the Securities Industry

OTC market Services Initiative

Depository & Registration Services for Equity OTC market

Repository for OTC derivatives

Opportunities and Challenges

Competition & Cooperation along the Value Chain Strategic Business Case Regulatory Constraint Risks Management

Mind the gaps!

A Few Questions to be Considered

Does diversification create value for the industry and synergy for CSD’s business?

Does it help CSD to reap benefits from market development?

Does it introduce new risk exposures and how do we monitor and mitigate them?

Does it help the CSD to gain sustainable competitive advantage?

Thank you