Joint Press Conference The Clearing Corporation and Eurex Form First Global Clearing Partnership Bue

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Joint Press ConferenceThe Clearing Corporation
and Eurex Form First Global Clearing
PartnershipBuergenstock 4 September 2003
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Agenda

• Headlines
• The Partners Highlights
• The Global Clearing Partnership
• Benefits for Customers

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Headlines

• Partnership deal signed between The Clearing
  Corporation and Eurex on September 3
• The Clearing Corporation to clear for Eurex in
  the U.S.A.
• Clearing users will save up to 95 percent of
  their margin requirements
• The Clearing Corporation to change its capital
  structure
• Eurex will take a 15 percent equity stake in The
  Clearing Corporation
• The Clearing Corporation will remain independent
  and continue to provide services to multiple
  market places
• The Global Clearing Partnership to give customers
  direct access to both U.S. and European products
  and to form the basis of a truly global market
  place

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Agenda

• Headlines
• The Partners Highlights
• The Global Clearing Partnership
• Benefits for Customers

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The Partners

• Eurex Highlights
• Eurex is the world market leader in derivatives
• The world's highest volume derivatives exchange
• The largest derivatives clearing organization in
  the world
• Total trading and clearing volume on Eurex
  exceeded 800 million contracts in 2002 and
  reached 524 million contracts in the first half
  of 2003
• Eurex provides the most liquid international
  benchmark products
• Fixed income products Eurex is the worlds most
  liquid market with 450 million contracts traded
  in euro interest rate derivatives in 2002 and 295
  million contracts in the first half of 2003
• European index products Eurex is the leading
  exchange with a market share of over 70
• Equity options Eurex is the leading
  international equity options market with an
  underlying value of 583 billion euros in 2002

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The Partners

• Eurex Highlights
• For more than three years Eurex has operated the
  most successful electronic trading platform for
  U.S. futures
• More than 80 percent of all U.S. treasury futures
  are already traded on Eurex technology (a/c/e)
• Same trading platform and network used in Europe
  and the U.S.
• Proven, reliable and scalable technology
• Eurex will continue to use this infrastructure
  for its new U.S. exchange

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The Partners

• The Clearing Corporation Highlights
• Market leader in U.S. futures clearing
• The largest independent U.S. clearing
  organization for futures
• Clears over 98 of all USD treasury bond futures
• The Clearing Corporation processed over 960
  million clearances in financial and agricultural
  futures and options in 2002
• Provides a variety of clearing services for the
  U.S. financial industry
• Offers clearing services for multiple U.S.
  exchanges and market places

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The Partners

• The Clearing Corporation Highlights
• Independent and close to industry participants
• The oldest and largest independent futures
  clearinghouse in the world
• Owned by 87 clearing member shareholders, who
  represent a vast group of global derivatives
  users and liquidity providers
• a sampling of some of our clearing members
  include
• ABN AMRO, Bear Stearns, Carr Futures, Citigroup,
  Credit Swiss, Deutsche Bank, Fimat, Fortis
  Clearing, Goldenberg Hehmeyer, Goldman Sachs,
  J.P. Morgan, Lehman Brothers, Marquette Partners,
  Merrill Lynch, Morgan Stanley, Prudential
  Securities, Refco, UBS Warburg and others

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The Partners Perfect Fit

• Leading international trading platform partners
  with leading U.S. clearing organization
• All market participants in US treasury futures
  are connected to the Eurex trading platform and
  The Clearing Corporation clearing infrastructure
• Partnership provides continuity for market
  participants through use of existing trading and
  clearing infrastructure
• Partnership creates enhanced value for customers
  through additional trading and clearing
  opportunities in both US and European products
• High synergy potential
• Eurex Clearing already provides 98 percent of the
  risk transfer in Euro denominated fixed income
  futures and more than 70 percent in European
  equity derivatives
• The Clearing Corporation clears over 98 of all
  USD denominated treasury futures

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The Partners Perfect Fit

• Both partners
• have a proven track-record of outstanding client
  service
• are leaders in their respective markets
• Of the top 20 Eurex customers, 18 are
  shareholders as well as clearing members of The
  Clearing Corporation
• Growing demand of market participants for global
  solutions build on proven processes and
  reliable partners

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Agenda

• Headlines
• The Partners Highlights
• The Global Clearing Partnership
• Benefits for Customers

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The Global Clearing Partnership

• The Clearing Corporation to clear for Eurex in
  the U.S.

• The global clearing partnership will give
  customers of The Clearing Corporation direct
  access to Eurexs European products
• Eurex customers worldwide will be able to clear
  Eurexs U.S. products via both Eurex Clearing as
  well as The Clearing Corporation
• Access to both organizations and their respective
  product portfolios and services
• Choice of clearing access through Eurex Clearing
  and The Clearing Corporation

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Change of The Clearing Corporation Equity
Structure

• The Clearing Corporation will change its
  structure to achieve the following benefits
• Guarantee function currently performed through
  the company capital, will be performed through a
  separate clearing fund
• Clearing services at The Clearing Corporation
  will become available for non equity shareholders

• Eurex and industry participants to build up
  equity partnership in The Clearing Corporation
• Existing shareholders will hold equity of 85
  million USD and hold 85 percent of the equity
• The Clearing Corporation will offer a share buy
  back program in order to allow shareholders to
  monetarize a certain amount of their equity
  interest while continuing to use The Clearing
  Corporations clearing services
• Existing shareholders will elect eight board
  members
• Eurex will contribute 15 million USD and hold a
  15 percent stake in The Clearing Corporation and
  appoint one board member

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Mutual Business Arrangements for a Preferred
Partnership

• Eurexs US clearing of interest rate products in
  Euro and USD exclusively through The Clearing
  Corporation

• The Clearing Corporation and Eurex will decide
  jointly on
• - cross-margining additional products with Eurex
  US products
• building additional clearing links for interest
  rate products
• changing rules regarding clearing of Eurex
  products
• The Clearing Corporation offering clearing
  services in US interest rate products for other
  markets operators
• The Clearing Corporation enter into strategic
  alliances, joint ventures, merger or acquisition
  with competing market operators
• Eurex can increase its stake to 51 in case of
  an outside bidder seeking control in The Clearing
  Corporation

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Agenda

• Headlines
• The Partners Highlights
• The Global Clearing Partnership
• Benefits for Customers

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Benefits for customers

• Increased capital efficiencies leading to lower
  costs through
• single collateral pool for two markets
• Cross margin effects between U.S. and European
  Products up to 95 percent
• Lower entry barriers for all customers of Eurex
  and its new U.S. exchange because of clearing
  choice
• Single open interest pool for all customers due
  to fungibility of contracts executed on all Eurex
  exchanges
• Lower back office costs due to streamlined
  processes
• Additional business opportunities for clearing
  members through access to additional products

Clearing
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Benefits for customers

• Democratic, open market model
• Level playing field for all market participants
• Participation in Eurexs global liquidity network
• Low trading costs
• Additional trading opportunities through
  additional products
• Overall market growth due to market model, global
  distribution and stimulation through seamless
  integration of OTC markets

Trading
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Benefits for customers

• Customers can leverage their existing trading and
  clearing infrastructure
• Eurex operates the reliable and scalable
  electronic trading platform which already trades
  more than 80 percent of all US. bond futures
• The Clearing Corporation operates the preferred
  futures clearing infrastructure in the U.S.

Infrastructure
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Continuous Trend to a fully Electronic Treasury
Futures Market

• Extrapolating the current trend, 100 of Volume
  in T-Bond Futures will be reached in December,
  2003

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Joint Press ConferenceThe Clearing Corporation
and Eurex Form First Global Clearing
PartnershipBuergenstock 4 September 2003