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TAKASBANKDerivatives Market

Clearing House Operations

London, December, 2004

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GENERAL INFORMATION ON TAKASBANK

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Clearing and Settlement Institution for the

Istanbul Stock Exchange (ISE)

Central Securities Depository of Turkey

Money Market for ISE Members

Official Custodian for Pension and Mutual

Funds

National Numbering Agency of Turkey

Clearing House for the TURKDEX

Unique Functions of Takasbank in Turkey

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Bridge Role in The Turkish Financial Markets

Capital Markets

Board

Issuers

Capital Markets

Intermediaries

Istanbul Stock

Exchange

BanksBanking Regulation and Supervision Board

Central Bank of Turkey

TAKASBANKTAKASBANK

Investorsindirect

TURKDEX

Central Registry

Institution

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Shareholder Structure

Banks

40%

Brokerage Houses

36%

ISE

24%

The total value of paid-in capital is USD 41.3 million

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Off-site Disaster Recovery System with an operations center;

with real time backup facility.

All operational program products are developed in house

All members are online connected to Takasbank system and

using our proprietary program products.

The Takasbank Electronic Transfer System (TETS) enables

brokerage houses to transfer both securities (G-Bonds &T-Bills)

and cash in and out of the Takasbank system electronically in

real-time connection with the Central Bank's EFT / ESTS

systems.

Real-time connection to Turkdex, Istanbul Stock Exchange,

Central Bank of Turkey and Capital Markets Board.

Operational Efficiency

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Custody System with Numbers

Equities Bonds & Bills

Asset Value under Custody (17.11.2004)

25.7USD (Billion.) 20.7

Total number of investorsub-accounts (equities) with balance

Pension and Mutual Funds Portfolios

17.1

1,111,356

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Number of Members : 113

Number of Companies Traded: 295

Average Daily Trading Volume: 579 ml$

Average Daily # of Contracts : 202,000

G-Bonds&Bills Market Clearing and Settlement

Number of Members : 140

Average Daily Trading Volume:

OP&SM: 980 ml$ Repo M: 4.126 ml$

Organized Market Clearing and Settlementwith Numbers (Equities)

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DERIVATIVES MARKET CLEARING HOUSE

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Takasbank’s functions

Clearing member selection with Turkdex,

Central counterparty to derivative contracts,

Determining the collateral type and procedures,

Collateral valuation daily,

Mark to market daily margining on sub account basis,

Monitoring collateral composition and margin call,

Managing of collaterals in case of default,

Guarantee fund management,

Cash collaterals management,

Member training.

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General Clearing Principles

Margin deposit requirement before buying or selling of a derivative contract. Futures contracts are marked-to-market daily and final settlement on T+0. Contracts are settled on cash basis. Margin calls are paid in cash (TRL). Clearing system and collateral management system are totally customer based. On line real time connection (Trading System Messages Router) with TURKDEX. Takasbank guarantee is limited only with the following sources;

Margin collateral Guarantee fund

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Membership types

Direct Clearing Member (DCM):

DCM is only authorized to trade and clear its own portfolio

and clients’ trades.

DCM can not provide clearing services to non clearing

members.

General Clearing Member (GCM):

GCM is authorized to trade and clear its own portfolio and

clients’ trades

GCM may addititonally provide clearing services to the non

clearing members, who are also authorized to trade in

Turkdex.

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Membership requirements

Capital adequacy,

Sufficient financial resources,

Certified as a derivatives intermediary by the

Capital Markets Board,

Approval of Turkdex Board of Directors as a market

member,

Sign Clearing Membership Contract,

Fullfillment of clearing member obligations such as

contribution to the Guarantee Fund.

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Portfolio

Market maker

Client

Global (omnibus)

Account types

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Collateral types

Initial margin

Maintenance margin

Extra-ordinary margin

Guarantee fund collaterals

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Eligible collateral margin

TRL

Foreign currency (USD, EUR)

FX Indexed Bonds

G-Bonds & T-Bills

Equities (ISE 100)

Mutual fund certificates

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Composition of collaterals

Collateral Type Min. Max. Haircut Cash (TRL) % 30 %100 1.00 Non cash % 0 % 70 FX ındexed bonds % 0 % 70 0.80 FX (USD, EUR) % 0 % 70 0.95 G-Bonds % 0 % 70 0.80 T-Bills % 0 % 70 0.90 Equities (ISE-100) % 0 % 35 0.70 Mutual Fund (Type A) % 0 % 35 0.70 Mutual Fund (Type B) % 0 % 70 0.80 Mutual Fund (Liquid) % 0 % 70 0.90

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Collateral Deposit/Withdrawal Operations

Collateral deposit/withdrawal takes place in the electronical environment.

Collaterals deposit to relevant a/c by the clearing members.

Depositing is made sub a/c basis.

Account owners can get available balances through members.

Available collaterals are calculated as follows:

Available Collateral = Deposited - Required +/- Profit Collateral margin (Loss)

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Collateral Valuation

Collateral valuations is done by Takasbank at the and of day process with the following price data:

for Bonds valuations, by ISE calculated prices which is used in Repo collateralization,

for Equities valuations, by ISE market closing price,

for FX valuations, by Central Bank FX price,

for Mutual Fund valuations, by unit price.

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Daily Mark to Market

Daily losses are cut from the cash collateral while profits added to the cash collateral on the same day.

Because the loss is cut from the cash balance, if the collateral is below the Maintenance Margin, margin call announcement is made by Takasbank.

Daily profits can be withdraw after the session, as long as the collateral composition is satisfied.

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TURKDEX DERIVATIVES MARKET TRADING

TURKDEX

TAKASBANK

RISK CONTROL

Buyingmember

Sellingmember

Col. Deposit or withdraw request are collected and transmitted to Turkdex

Position Collateral

Buy Order Sell Order

Session hours: 10 am- 3 pm

Trading Engine

Cash+Non cash =Total collateralTot.Col > Req. margin

Ordermatch

Order canc.

EH

COLLATERAL

1

2

3

4

Col. deposit Col. deposit

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TURKDEX DERIVATIVES MARKET CLEARING

TURKDEX TAKASBANK MEMBER

14:45 Turkdex DM is updated with the latest collateral balance. 15:15 Turkdex announce the settlement price and calculates the margin call amount.

15:15 Takasbank receives the Req. Margin and Profit/Loss amounts and starts the daily mark to market operations. Losses cut from the cash collaterals. Margin call announcement to members.15:30 Last hour for the cash management order for daily cash withdrawals.16:30 Last hour for margin call. Daily profits are added to the cash collaterals.16:30 Cash management, money transfer and placement is exercised.17:00 Last hour for omnibus position details.18:00 + End of day operations (valuation, reporting, accounting, cash management, a/c transfers etc.)

DM

DM

MBS SCREEN

(WAN)-Deposit-withdr.-Omnibus a/c-Default-Gurantee fund-Cash management-Reports (MIS)-a/c opening

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Guarantee Fund

Guarantee Fund is established by the Clearing House with the clearing members’ contribution. This fund makes payment in case of the defaults.In any default, the defaulting member’s contribution is used first and if necessary then non defaulting members’ contributions are used on a pro rata basis.

Clearing members must contribute this fund with cash and non cash collaterals. Fixed amount of the contibution is determined by the membership type, while variable amount is calculated with open positions and volume of the member.

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Eligible Collateral Types for Guarantee Fund

TRL

Foreign currency (USD, EUR)

FX Indexed Bonds

G-Bonds & T-Bills

Mutual fund certificates

Letter of Guarantee

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Cash Management

Cash margins and Cash Guarantee Fund contributions are subject to cash management. Contract based margin colleteral is subject to cash management and net interest income is added to cash collateral following business day.

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THANK YOU

TAKASBANK