Russian Settlement

Russian Settlement Challenges Russian market is continuing to expand • In general, Russian has proven a robust market with sustainable growth  3rd highest foreign currency reserves  Strong budgetary and trade surpluses  Market has been relatively insulated from sub-prime marking it as a safe investment  Drivers for growth have shifted away from commodities to domestic industry • EBS has launched electronic trading of physical RUB which will drive FX trading beyond direct commercial needs Market participants want to invest     Hedge Funds Asset Managers International Corporations Banks providing financing • Variety of investment opportunities creates needs for physical FX • Interest in currency speculation is growing as well How can banks scale to meet demand? • Variety of standards at local agents • Manual processing still happening internationally and domestically 2 Traiana Confidential Ideal Solution Full adoption of a SWIFT standard message protocol inclusive of all details • RUR6 • Fields 72 usage standardized • CBR integration with SWIFT Real-time Gross Settlement at Central Bank • Plan has been circulated • Question of how long it will take for broad market adoption • Puts Rouble on path to CLS admission 3 Traiana Confidential Can Intermediate Steps be taken? Use adaptable connectors to format messages specific to each party • Dealers adhere to “standard” SWIFT protocol • Adaptor reformats message to local agent preferred formatting SWIFT or non-SWIFT compliant Centralize Russian specific instruction elements (CBR account, VIN Code, INN, etc.) to reduce need to manually update and track records Centralize the translation • Phase out the RUR6 protocol • Instructions sent in English by banks • Translated to Cyrillic by adaptor • Provides transparency to both parties of the intent and the output • Provides “standard” for instructing parties and ensuring clean instruction Ideally “updates” on payment status would be provided via the adapter as well Reduce the number of events at the local agent • Enable netting of Ruble • Provide full transparency to all parties    Dealers Local Agent CBR 4 Traiana Confidential How Traiana can help Harmony Message Center • Flexible connectivity – parties put and take in their preferred format • Industry familiarity with solution • Central repository for mapping details between parties NetLink – centralized netting • Visibility to all interested parties • Ensures parties agree netted values prior to submission to local • agent Linked to Message Center 5 Traiana Confidential