FAQs

1. Who is OTCDerivNet Ltd?

It is a limited liability company owned by Bank of America, BNP Paribas, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan, Merrill Lynch, Morgan Stanley, Royal Bank of Scotland, Société Générale and UBS.

2. What is the purpose of OTCDerivNet?

To partner with the LCH.Clearnet in the development of a secure, efficient and cost-effective post trade dated environment for the benefit of the OTC derivative industry.

3. What is its involvement with the LCH.Clearnet?

OTCDerivNet will provide strategic direction and funding for the development of LCH.Clearnet SwapClear and will work with the LCH.Clearnet to extend the existing range of clearable transactions.

4. What will the OTCDerivNet do?

The Group will work with the LCH.Clearnet to determine and prioritise the future development for LCH.Clearnet SwapClear, to ensure that the strategic direction closely follows the needs of the industry/market.

5. OTCDerivNet - Partners and Ownership %

There are currently 14 equal shareholders.

6. How is the OTCDerivNet organised?

OTCDerivNet is managed by a board of directors made up of a board member appointed by each of the fourteen shareholders. The board meets regularly and is advised by an Executive Committee composed of five of the board members. In addition there are various working groups managed by OTCDerivNet and staffed from each organisation working closely with LCH.Clearnet.

7. What is the size of the investment commitment to the LCH.Clearnet SwapClear service?

OTCDerivNet will provide sufficient funds to meet the cost of developing the system in the manner in which OTCDerivNet would like the system developed.

8. How will existing members be affected?

Existing members will benefit from the enlarged user group and the expanded product range as well as increased trade volume.

9. Does OTCDerivNet own LCH.Clearnet SwapClear

No, SwapClear is owned by LCH.Clearnet Limited.

II Product Development Issues

1. How does OTCDerivNet envisage the direction of further product development?

Planning is underway to develop the clearing of FRA, OIS, Cross Currency Swaps and to extend tenors on the major currencies. Other enhancements to
SwapClear are also being reviewed and planned.

2. Who will be responsible for the financing of such development?

OTCDerivNet.

3. What is the timescale envisaged for development of the additional product suite?

Initial estimates indicate a phased roll out this year and next year, to include feasibility, design, development and delivery for all the collective products mentioned above. This has yet to be finalised.

III Trading Platforms - Other

1. What is the relationship with Markit Wire

In August 2004 LCH.Clearnet established an FpML interface with the SwapsWire electronic derivatives platform that will enable a straight-through link from trade capture to affirmation to clearing.

2. Will LCH.Clearnet SwapClear be linking into any automated confirmation or transaction initiatives?

Interfaces will be added where there is user demand.