Russian Trading System Stock Exchange

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Russian Trading System Stock Exchange

• Opportunities of Derivatives market for foreign
  investors

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Russian Derivatives market

• Derivatives market the fastest growing, the
  most profitable
• segment of the Russian financial market.
• 2007 until now this year has been
• the most profitable year in the history
• of derivatives market
• Rapid growth of trading volume
• Steep growth of number of trading participants
• Legislation improvements
• Infrastructure changes
• The facts above create a solid base for the
  future market development

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FORTS (Futures and Options on RTS)
Positive factors that promote development of
derivatives market

• Legal defence of futures contracts (the law was
  adopted by the governmental authorities and
  signed by RF President on January 26, 2007)
• Cancellation of limitations for capital
  transactions with currency
• Macroeconomic policy helps further economics and
  financial market development
• The process of overflow of the main share of the
  derivatives on Russian assets to Russia

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FORTS (Futures and Options on RTS)
Russian derivatives market

• FORTS (Futures and Options on RTS)
• is a derivatives division of the Russian Trading
  System Stock Exchange
• FORTS has 13 years experience in futures and
  options trading
• FORTS is a leader of the Russian market in
• Monthly Trading volume 27 bln US dollars
• Number of traded contracts - 53
• Number of active market participants - 90
• Number of accounts - 20000
• Last Records
• Daily open interest exceeded 9,5 billion.
• Daily trading volume grew to 1,8 billion.
• FORTS is a reliable and technologically
  advanced market

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Market Dynamics
Russian derivatives market

• FORTS is
• in the international exchanges top-20 by trading
  volume
• the world leader in the single stock derivatives
  segment
• the fastest growing segment of the Russian
  financial market

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Volume examples
Why Russian Derivatives market?

• Monthly trading volume of futures and options
  contracts on IOB Index on LSE
• 45 mln USD
• Monthly trading volume on futures and contracts
  on RTS Index
• 15 bln USD
• Monthly trading volume on futures contracts on
  Rebco oil on NYMEX
• 0
• Monthly trading volume on futures contracts on
  Urals on RTS
• 32 mln USD
• Conclusion financial instruments on Russian
  assets have better liquidity in Russia

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Wide range of instruments
FORTS (Futures and Options on RTS)

• FORTS offers a wide range of derivative
  instruments
• Equity derivatives
• Futures on 15 most liquid shares
• Options on 15 most liquid shares
• Index derivatives
• Futures on RTS Index and RTS Sectoral Indices
• Options on RTS Index
• Bond futures
• -Futures on 12 most liquid bonds
• Short terms Interest Rate futures
• -MosIBOR Futures
• -MosPrime Futures
• Currency derivatives
• -Futures on UDS
• -Option on USD
• Commodity derivatives
• -Physical Delivery Gas oil futures
• -Futures on Gold and on Silver
• -Futures on Oil (Urals)

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FORTS (Futures and Options on RTS)
FORTS advantages

• Highly liquid market
• Aggregation of demand of local and global market
  participants
• A large number of market participants (more than
  14 thousand of clients accounts)
• A wide range of instruments
• An opportunity of arbitrage with western
  financial markets

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FORTS maximum opportunities for international
investors

• Hedging of positions in Russian assets (both
  portfolios and separate securities)
• Hedging of positions in rubles and USD
• An opportunity to make money on volatile and bear
  market
• Making arbitrage deals
• An opportunity to trade with Russian
  counterparties
• Offering clients trading on the Russian market
  (DMA, Structured Products)

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RTS Index Derivatives
Russian derivatives market

• Futures on the RTS Index was launched in August
  2005
• Option on RTS Index future was launched in
  September 2005
• Within 6 months RTS Index has become the most
  popular Russian derivative
• Open interest is over 2,4 bln dollars

• RTS Index is the benchmark of the Russian stock
  market
• Calculated since 1995
• Capitalization-weighted, with free-float
  coefficients
• Consist of 50 preferred and common shares
• Calculated real-time

Current market capitalization of companies
included the RTS Index as of Sept 25 is 935 bln.
RTS Index is included in the StandardPoors
Index Global Portfolio
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Money market derivatives
Russian derivatives market

• Effective instrument for hedging of risks in
  domestic Russian assets
• Futures contract on exchange RUR\US dollar rate
• Option on futures contract on exchange RUR\US
  dollar rate
• Futures contract on short-term interest rate

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Commodity Derivatives
Russian market instruments
-February 20th, 2007 Started of physical
delivery futures contracts on Gas oil -Sugar
futures launched 19 September, 2007 -Weather
derivatives will be launched in November,
2007 -Futures contracts on oil Cash-settled
futures contracts on export oil Urals. Settlement
based on pricing information supplied by Platts
(Urals-ex-Baltic Sea CIF R'dam) -Futures and
options on gold -Futures contracts on silver
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FORTS General Clearing Members

• Main Russian banks (Sberbank, Gazprombank, VTB,
  Alfa-bank, NRB, etc.)
• Global investment banks (CSFB, Deutsche Bank,
  Raiffeisenbank Austria , UBS)
• Leading Russian investment banks (Troika Dialog,
  Renaissance Capital, CIT-Finance, Aton etc.)
• Leading Russian investment companies

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FORTS Participants

• Leading investment companies
• Investment banks including global investment
  banks
• Commercial banks
• Institutional investors
• Non-residents
• Private investors
• Industry participants
• In total more than 20 000 participants who are
  served by up to 180 professional market
  participants

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Settlement guarantees

• A separate specialized clearing company RTS
  Clearing House
• acts as a central counterparty to the futures and
  options transactions
• runs the settlement of all the contracts
• Three-level guarantee system
• Initial margin (guarantee payment)
• Reserve Fund
• Contingency Fund

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Contact details
RTS Derivatives Department Tel/Fax [phone]
90 31 E-mail forts_at_rts.ru Web www.rts.ru or
www.forts.ru