This document discusses the opportunities for Cleartrade Exchange to become a regulated market operator (RMO) for over-the-counter (OTC) derivatives under new regulations. It notes that the Dodd-Frank Act requires OTC trades to be executed on regulated swap execution facilities (SEFs) by late 2012. Cleartrade Exchange aims to satisfy this definition by providing a centralized, transparent, and anonymous electronic market for cleared OTC derivatives. Its platform offers many-to-many trading, connectivity to multiple clearinghouses, and post-trade processing to seamlessly connect trading to clearing.

1. Transforming Market Structures as a Recognised Market
Operator (RMO) for OTC Derivatives
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2. THE STORY SO FAR…
Current Industry Scenario
The Industry Challenge
Cleartrade Exchange – Benefits for stakeholders
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3. Regulatory Reform
Opportunity for change
OTC instruments are subject
to global regulatory reform. Demand Curve of Regulation
By late 2012 institutional &
retail traders and brokers
under the Wall Street &
Consumer Protection Act Regulation Wall Street &
$600 Trillion Consumer Protection Act
(Dodd Frank) will be required (Dodd Frank)
Derivatives Market
to execute trades via
regulated swap execution SEF Rules definition
facilities (SEF’s). CFTC
Globally, regulators are Mfid Review What size market can
tightening rules and we expect to see ?
emulating the Dodd Frank Act. Dodd Frank Act
July 2011
2011 2012 2013
Time
Wall Street Reform and Consumer Protection (Dodd–Frank) 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”.
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Cleartrade Exchange comfortably satisfies this definition

4. Summary of SEF Principles
Everyone will want to be a SEF ! But what is it ?
These are the core principles to which a SEF must adhere are:
Compliant
(1) Complying with the CEA and the CFTC rules,
(2) Enforcing trade processes for market participants that will deter abuses, ensure impartial
access to markets and capture information on rule violations,
(3) Preventing swaps from being readily susceptible to manipulation,
(4) Monitoring trading to prevent manipulation, price distortion and disruptions of the delivery or
cash settlement processes,
(5) Establishing rules to obtain information to provide to the CFTC,
(6) Establishing position limitations and accountability to prevent market manipulation or
congestion,
(7) Establishing mechanisms for ensuring financial integrity of swaps,
(8) Establishing an emergency procedure to liquidate or transfer open positions in a swap or
suspend trading on the swap,
(9) Publishing trading information such as public information on price, trading volume and other data,
(10) Maintaining records of activities, including a “complete audit trail” for a five year period
(11) Not unreasonably restraining trade,
(12) Establishing rules for minimizing and resolving conflicts of interest,
(13) Providing adequate financial resources,
(14) Establishing system safeguards and
(15) Assigning a chief compliance officer who reviews compliance with core principles & CFTC rules.
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5. The industry challenge
… bridging the “gap”
*Freight / Ferrous Metals Complex of Derivatives
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6. 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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7. The Cleartrade Exchange (CLTX)
- Introduction
• Centralised, transparent & anonymous electronic market
• Regulated by Monetary Authority of Singapore (MAS) as an RMO
• Leading technology and operational infrastructure with an open API
• Venue for OTC cleared derivatives
– Launched with Dry FFAs, Iron Ore, Steel and Fertilizer swaps
– Will launch Container derivatives in Q4’11
– Established two Spot Indices for the development and settlement of swaps
markets. ( Cleartrade China Steel Index, World Container Index assessed by Drewry)
• Supports many-to-many participants trading styles
• Easy to deploy web based screen interface
• No screen costs, software, set up costs or membership fees, transaction fee based
• Multiple clearing house connections ( LCH, NOS, SGX, CME)
Cleartrade Exchange Timeline
2009 2010 2011 Over
Market Study (FEB) Cleartrade Exchange 160,000 LOTS
Incorporation in Singapore 1st IDB RMO License Processed
Regulated Market
Technology Credit Filter Member 3 Product
Design & Build & Clearing House Onboarding Families 7

8. The Cleartrade EDGE Platform
the infrastructure of a regulated marketplace
EDGE Execution Platform
Principals
Orders, Routing, RFQ’s, & Trade Link to Broker Trade Hub
Management, Credit Matrix, Trade / recap Web interface
Quote Vendor GCM’s
Recap Engine Management (Trade &
Feeds Rules & algorithms Systems Recap reports)
LCH
3rd Party
Cleartrade
Trading Screens
Clearing
Operations
HUB API
TRADE HUB
EDGE API
EDGE NOS
Execution : Pre & Post Trade Post Trade Reporting and Management
Processing : Marketplace
management, trading rules and
algorithms
FIX5.0
GCM STP Gateway
Cleartrade Mobile Credit SGX
Price & Trade Discovery
Matrix
Cleartrade Credit Matrix for GCM’s CME
Set financial margins by account
import positions, Net P&L risk view
Cleartrade Screens
Broker – Trade - GCM
Execution to Clearing : PriceStrictly Private andTrade Reporting : Risk Management
Discovery : Confidential 8

9. Fully integrated exchange solution
The Cleartrade EDGE platform
consists of 5 key elements:
1. Electronic execution screen Recap
manager / web
2. Block trading / deal registration and sw appl.
Version + RM
3. Link via credit filter to clearing module
houses for pre-approval of
trades
API access for
4. Consolidated recap manager third party
and risk management system trading system
(Trayport,
5. Market supervision and Elysian etc)
operations team (17hrs p/day)
Cleartrade Exchange
provides the “plumbing
between execution and
clearing” Clearing House
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10. How we translate the rules…
Screen Familiarization
Trades Window Transparency Window
Quick Trade / Order Entry User Definable Contract Layouts

11. Trading Scenarios
Global access for all members and
to all relevant commodities …
INITIATOR AGGRESSOR
Principal Principal
Principal Broker Principal
Principal
Principal
Broker Principal
Principal
Principal
Broker Broker Principal
Principal Principal
Principal
Broker (Block Trade) Principal
Principal Principal
11

12. Benefits of partnering with Cleartrade Exchange
Broker Principal
Participating brokers do not share prices and do not co-broker
Easy to access open market prices -Trade direct for regular trades
“Use Cleartrade as internal white board”
Cleartrade fee structure does not undercut brokerage commissions Trade via a broker for more complex tailored orders - Retain
and does not add significantly to the cost of transactions 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
MTF risk management function allows full visibility of positions and P+L
brokers
Cut your back office costs and let Cleartrade take care of Automated recap system and downloadable reports integrates with
confirmations, clearing registration and recording your accounting systems
Multi product platform enables cross selling of prices to relationship Private and Confidential trades allowed in block trading system (very
clients dark trades)
Positions you in a positive light with clients by participating in a level Better closing prices and forward curves
playing field
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13. The story continues…
• Cleartrade Exchange is at the heart of the OTC market
transformation.
• Multiple products listed and trading (Dry FFA, Iron Ore, Steel,
Fertilizers) and connected to multiple clearing houses.
• Monitoring closely the regulatory frameworks and will adjust the
business model, rulebook with MAS, as further OTC regulation gets
defined
• Remain focused on working with the market, this is a critical pivot
point and open dialogue with all partners is essential – we work
within an complex eco-system of dependencies
• We have the experience of working with the market over the last
two years on the sensitive issues – this is a journey not a
destination
Cleartrade Exchange meets to needs of a Swap Execution
Facility and will register accordingly to address the US market.
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14. THANK YOU
Contact :
Richard Baker,
Chief Executive Officer
Email : rbaker@thecleartrade.com
PS. Please stop raining !
Come on Andy Murray in the US Open…
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