Strictly Private and Confidential 1

The Electronic Marketplace for OTC Cleared Derivatives

Regulatory Reform Opportunity for change

OTC instruments are subject to global regulatory reform. By late 2012, institutional & retail traders and brokers under the Dodd-Frank Wall Street Reform and Consumer Protection Act will be required to execute trades via regulated swap execution facilities (SEF’s).

Globally, regulators are tightening rules and emulating the Dodd-Frank Act.

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Regulation

Time 2011 2012 2013

MiFID / ESMA / ISOCO

SWAP & SEF Rules definition

CFTC

G20 Nations Implement ISOCO Principals

For OTC Derivatives

The Dodd–Frank Wall Street Reform and Consumer Protection Act lays the foundation defining a SEF as a “facility, trading system or platform in which multiple participants have the ability to execute or trade swaps by accepting bids and offers made by other participants that are

open to multiple participants in the facility or system”.

Cleartrade Exchange comfortably satisfies this definition

Dodd-Frank Act July 2011

Demand Curve of Regulation

$700 Trillion Derivatives Market

What size market can we expect to see ?

The industry challenge … bridging the “gap”

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*Freight / Ferrous Metals Complex of Derivatives

Introducing The Cleartrade Exchange

Cleartrade Exchange provides seamless transaction flow of OTC derivatives from electronic execution, through to GCM via Credit Filter to clearing house(s), and back.

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The Cleartrade Exchange (CLTX) - Introduction

• Centralised, transparent & anonymous electronic market

• Regulated by Monetary Authority of Singapore (MAS) as a RMO

• Leading technology and operational infrastructure with an open API

• CLTX platform is available as a Platform as a Service (PaaS) for private markets

• Venue for OTC cleared derivatives

– Dry FFAs, Iron Ore, Steel, Fertilizer and Container swaps

– Coking Coal & Bunker Fuel Oil (Q4’12) pending approval with MAS

– Established two Spot Indices for the development and settlement of swaps markets. (Cleartrade Exchange China Steel Index, World Container Index assessed by Drewry)

• Supports many-to-many participants trading styles via easy web interface

• No screen, software or set up costs; no membership fees; a transaction fee exchange

• Multiple clearing house connections ( LCH, NOS, SGX, CME)

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Cleartrade Exchange Timeline

Market Study Regulated Market

2009 2010 (FEB) Cleartrade Exchange Incorporation in Singapore

Technology

Design & Build

2011

Credit Filter& 1st Clearing House

1st IDB RMO License

Over 250,000

LOTS Processed

Live Trading & 3 Product Families

Member Onboarding

2012

Container Freight

PaaS Launched

DMA & Mobile Apps

Strictly Private and Confidential 6 Execution to Clearing : Price Discovery : Trade Reporting : Risk Management

EDGE Execution Platform

Orders, Routing, RFQ’s & Trade Management, Credit Matrix,

Recap Engine Rules & algorithms

DM

A TRADE HUB

Post Trade Reporting and Management

FIX5.0

HU

B A

PI

LCH

NOS

SGX

Trade Hub Web interface

(Trade & Recap reports)

Cleartrade Clearing

Operations

3rd Party Trading Screens

STP Gateway Credit Matrix

Principals

GCM’s

Cleartrade Screens

Broker – Trade - GCM

Link to Broker Trade / recap Management

Systems

CME

Cleartrade Mobile

Price & Trade Discovery

Cleartrade Credit Matrix for GCM’s

Set financial margins by account

import positions, Net P&L risk view

Quote Vendor Feeds

EDGE Execution : Pre & Post Trade

Processing : Marketplace management, trading rules and

algorithms

EDG

E A

PI

The Cleartrade Platform the infrastructure of a regulated marketplace

The technology : Fully integrated exchange solution

The Cleartrade Exchange EDGE platform consists of 5 key elements:

1. Electronic execution screen

2. Block trading / deal registration

3. Link via credit filter to clearing houses for pre-approval of trades

4. Consolidated recap manager and risk management system

5. Market supervision and operations team (17hrs p/day)

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Trade Repository and Recap Manager

FIX & XML API access for third party trading and reporting

systems

Clearing House

Cleartrade Exchange provides the “plumbing between execution and clearing”

The products : OTC cleared commodity markets

Market Value US$ Physical Volume Lot Volume (Paper)

Dry Bulk FFA $15bn 611 M DWT 1.1 M lots

Container Freight $111bn 155 million moves 3000 lots

Fertilizers $640m 160 M tonnes 2.1M tonnes

Iron Ore $150 bn 1,779 M tonnes 44M tonnes

Steel $10.6bn 1,5 bn tonnes

409.6 M tonnes

Scrap $56bn 120 M tonnes n/a

Coal $80bn 1,086 M tonnes 9,000 M tonnes

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Cleartrade Exchange has focused product development on Dry Bulk trade commodities in the initial phase, a physical market complex worth in excess of $400 billion.

Dry Bulk Commodity Complex Volatility – Volatility - Volatility

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Iron Ore1,179

Coal1,086

Grain352

Other1,040

2002 2012

Dry Cargo - Cape Brazil/China

Bunkersas % of Freight

Rates70%

38%0

50000

100000

150000

200000

250000

$/d

ay

Cape 172k dwt Panamax 74k dwt Supramax 52k dwt

Dry Bulk Trade Growth 2012-14 – 6.2% Dry Bulk Multiple Industrial Commodities

Dry Bulk Time Charter Volatility Very Extreme Fuel Oil – a hedge to Brent Crude adding volatility

Strategic Market Development Settlement Indices

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www.worldcontainerindex.com World Container Index assessed by Drewry, created as a 50/50 joint venture between Cleartrade Exchange and Drewry Shipping Research. • Launched September 2011 • Over 1800 registered email subscribers • 20 paying members • Licensed to LCH for Contract Settlement • Providing 11 contract prices weekly

Cleartrade Exchange China Steel Index A 5-year partnership between Cleartrade Exchange and Umetal of China. • Launched November 2010 • Covers China HRC/Rebar/Wire & Rod • Over 800 registered email subscribers • Licensed to LCH for Contract Settlement • Providing 4 contract prices daily

Broker Principal

Participating brokers gain access to a deeper, centralized pool of

liquidity Easy to access open market prices -Trade direct for regular trades

Cleartrade fee structure does not undercut brokerage commissions

and does not add significantly to the cost of transactions

Trade via a broker for more complex tailored orders - Retain

relationship

Brokers can route orders securely to traders “Legging” functions gives better view of available spreads and ratios

All open screen prices are shown anonymously to all participants Bespoke contract functions for time strips / calendar strips

Block trading of pre-matched trades (dark trades) are available to OTC

brokers

MTF risk management function allows full visibility of positions and

P+L

Cut your back office costs and let Cleartrade take care of

confirmations, clearing registration and recording

Automated recap system and downloadable reports integrates with your accounting systems

Multi product platform enables cross selling of prices to relationship

clients

Private and Confidential trades allowed in block trading system (very

dark trades)

Positions you in a positive light with clients by participating in a level

playing field

Better closing prices and forward curves

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Benefits of partnering with Cleartrade Exchange

CONTACT DETAILS

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Richard Baker Chief Executive Officer Email : rbaker@thecleartrade.com

Robert Antell Business Development Director

Email : bantell@thecleartrade.com