MTS DENMARK SPECIFIC MARKET RULES

MTS DENMARK SPECIFIC MARKET RULES Effective as of 2 nd June 2014 1

These Specific Market Rules together with the MTSAM Common Market Rules collectively constitute the rulebook for MTS Denmark and should be read in conjunction with one another. MTSAM Common Market Rules apply to MTSDk in their full and entire meaning. All capitalised terms are taken in their full meaning from the Definitions within the MTSAM Common Market Rules. SECTION I - DEFINITIONS In addition to the definitions listed in the MTSAM Common Market Rules, the following definitions are also applicable to MTS Denmark: DKB DKL means interest-bearing public government bonds denominated in DKK issued by DENNB classified as benchmark (DKB) or liquid (DKL) securities. DKS DKT DKS segment entails DKK-denominated bonds with less than one year to maturity. means Danish Treasury Certificate, a short-term zerocoupon Treasury bill issued by the DENNB. DIL DENNB Bond Segment Danish Inflation Linked segment for DGBi bonds. means Danmarks Nationalbank acting as Government Debt Management, the Social Pension Fund and on its own name, a participant that takes part in the TRS segment and PAF platform and is able to insert singlesided proposals in bond segment and T-bill segment. means the segment of the System dedicated for trading between Participants in DKBs, DKLs, DKSs. KOD means interest-bearing public government bonds denominated in EURO issued by DENNB Market Maker Liquidity Provider means the participants with market maker status who obtain a minimum of at least 75% compliance on a quarterly basis - as defined in article 14 and therefore entitled to receive fee-rebate from the company at yearend 2

Primary Dealer TRS-DBB segment means an institution that has been designated by the DENNB as a Primary Dealer. means the segment of the System dedicated for trading between the DENNB and Primary Dealers. SECTION II GENERAL PROVISIONS Article 1 Market Rules 1. For the purpose of this Article, all decisions taken by the Company pursuant to the MTSAM Common Market Rules shall be taken by the Board unless specifically delegated by means of a Board Resolution to another body of the Company. 2. For the operations and functioning of the TRS segment, Articles 25.2.b up to and including Article 25.2.e and Article 27 of the MTSAM Common Market Rules are not applicable. Trading in the TRS segment and PAF platform is subject to these Market Rules and to the issuance policies and issuance calendar of the DENNB. For DENNB, Articles 8.q and 8.r, 28, 29, 30 and 34 of MTSAM Common Market Rules are not applicable for TRS segment and PAF platform. SECTION III ADMISSION AND RESIGNATION Article 2 Participant Types MTS Denmark distinguishes between three categories of Participants: 1. Price Taker: Participants are permitted to take part in trading of Tradable Securities through Orders only. 2. Market Maker: Participants are permitted to take part in trading of Tradable Securities through Quotes and/or Orders. Market Makers are Participants that are accepted by the Company and agree to have quoting commitments in relation to certain Eligible Securities in accordance with MTSAM Common Market Rules. 3. DENNB A Participant that has access to the TRS Segment of the System and takes part in trading through Quotes on the bid only and orders on the ask side only. They also have access to the cash market (DKB, DKL, DKS, DKT) through single sided proposals and through orders. Furthermore they are connected via the auction system (PAF platform) to perform primary market activities. 3

Article 3 General conditions for admission 1. In addition to the General conditions for admission specified in MTSAM Common Market Rules, the following institutions may also be admitted to trading on the System: a) The DENNB 2. In addition to the General conditions for admission specified in MTSAM Common Market Rules, institutions requiring admission to trading must: a) Belong, either directly or via an agent, to the clearing and settlement institution specified below, and have suitable links with such institution for the settlement of trades on the System: I. In order to be admitted to trading DKK-denominated securities, MTSDk participants must hold a deposit account with VP Securities Services, Euroclear Bank or Clearstream Banking. II. In order to be admitted to trading on EUR-denominated securities, MTSDk participants must hold a deposit account with Euroclear Bank or Clearstream Banking. Article 4 Additional Conditions for admission for Participants 1. In accordance with Article 4 of MTSAM Common Market Rules, an institution that wishes to be admitted to trading on MTSDk as a Market Maker must be Primary Dealer of the Kingdom of Denmark for the DKK-denominated securities or a Single Market Specialist (SMS) on the Euro-denominated securities, must have a net worth, as calculated by its respective regulatory instructions for supervisory purposes of the institution, of at least 1 billion DKK. 2. In accordance with Article 4 of MTSAM Common Market Rules, an institution that wishes to be admitted to trading on a MTSDk as a Price Taker must have a net worth, as calculated by its respective regulatory instructions for supervisory purposes of the institution, of at least 500 million DKK and turnover of no less than euro 300 million. 3. Additional conditions for the admission of the State Agency in the Market Segment. a. Danmarks Nationalbank will be enabled on the DKT market making segment with the same technical setup as a Market Taker but only allowed to insert single side quotes - in order to execute buy and sell trade transactions in Danish Government Securities, including activities of Government Debt Management, the Social Pension Fund and on its own account. b. Danmarks Nationalbank will be enabled on the DKB & DKL market making segment with the same technical setup as a Market Taker but only allowed to insert single side 4

quotes in order to execute buy and sell trade transactions in Danish Government Securities, including activities of Government Debt Management, the Social Pension Fund and on its own account. Government Debt Management will in consultation with Primary Dealers assess the performance of Government Debt Management's buy and sell trade transactions on the DKB DKL - DKT market making segment in its own name and on behalf of the Social Pension Fund on an on-going basis. Government Debt Management may, decide after consulting with Primary Dealers, to amend the framework of Government Debt Management's buy and sell activity on its name and on behalf of the Social Pension Fund c. T-Bill, Bond and Reverse Bond auctions are announced to the Primary Dealers by Danmarks Nationalbank and performed via MTS Denmark s PAF auction system. Transactions are conducted in an issuing segment separate from the market making segment and only Primary Dealers and Government Debt Management have access to the issuing segment. Government Debt Management, in consultation with Primary Dealers, assesses the functioning of the issuing segment on an on-going basis. Government Debt Management may decide, after consulting with Primary Dealers, to amend the framework for opening of new issues. Article 5 Admission procedure for Participants Article 6 Resignation procedure for Participants As a deviation from set in article 6 of MTSAM Common Market Rules, a Primary Dealer of the State Agency may resign from membership by giving no less than 1 month notice in writing to the Company. Article 7 Committee The Market Committee consists of the Primary Dealers of the Kingdom of Denmark. The following banks are member of the Market Operations Committee: Danske Bank Nykredit Nordea Barclays 5

SECTION IV - UNDERTAKINGS Article 8 Undertakings Article 9 Additional Undertakings of Specific Participants Additional undertakings of Price Takers: In addition to the undertakings in MTSAM Common Market Rules, each Price Taker shall undertake to the Company and other Participants from time to time: 1. To ensure fulfilment of the conditions referred to in Article 3 of MTSAM Common Market Rules and the relevant section of Article 4 of these Specific Market Rules. 2. To notify the Company immediately in case of any breach of any of the undertakings in Article 3 of MTSAM Common Market Rules and Article 4 of these Specific Market Rules. Additional undertakings of Market Makers: 1. In addition to the undertakings in the MTSAM Common Market Rules, each Market Maker undertakes to the Company and other Participants from time to time, to make Double-Sided Quotes on the System in relation to all Eligible Securities assigned to it and to do so in compliance with the provisions regarding quoting commitments. Such undertaking shall not apply to a Tradable Security while it is suspended from trading on the System. 2. The Company may at its discretion: a. Agree to a temporary suspension of its undertaking in paragraph [1] above; or b. Temporarily suspend a Market Maker s undertaking in paragraph [1] above if normal market conditions do not apply or a MMI occurs; or c. Temporarily amend the methods of calculation referred to in the provisions regarding quoting commitments, if normal market conditions do not apply or a MMI occurs. SECTION V TRADING Article 10 General System Operations Article 11 - Opening Hours and Days The minimum number of hours in relation to the requirements to make Quotes on the System per Trading Day is 5 hours between 09:00 CET and 16:30 CET. Article 12 Suspension and postponing of operations 6

Article 13 Selection of Eligible Securities, Tradable Securities 1. The issuer is the Kingdom of Denmark 2. The eligibility criteria for Tradable Securities are: 2.1. Fixed coupon-bearing Eligible Securities 2.2. Index-linked Eligible Securities 2.3. T-Bills Tradable Securities shall be classified in the following maturity buckets according to their remaining maturity: a. Maturity buckets Traded Securities denominated in DKK DKB (Benchmark Securities) and DKL (Liquid Securities) shall be classified in the following maturity buckets according to their remaining maturity: Bucket A Bucket B Bucket C Bucket D 13 months to 3.5 years 3.5 years to 6.5 years 6.5 years to 13.5 years Over 13.5 years Traded Securities denominated in DKK DKT (T-bills) shall be classified in the following maturity buckets according to their remaining maturity: Bucket A Bucket B 0 to 6 months 6 to 12 months Traded Securities denominated in DKK DKS (short-term bonds less than 12 months) shall not be classified in maturity buckets. Traded Securities denominated in EUR KOD (Kingdom of Denmark) shall not be classified in maturity buckets. b. Minimum trading quantity and minimum order quantity Normal Market circumstances The minimum trading quantity for Traded Securities is as follows: 1. DKK- denominated securities: Minimum quantities vary from 5 to 20 million DKK, according to guideline set by the Danish DMO. For further information please contact mtsam@mtsam.com 2. EUR-denominated securities: The minimum trading quantity on EUR denominated securities shall be euro 2.5 million. 7

Extraordinary Market circumstances - applicable for Treasury Bills only The Market Operations Committee may suggest that Denmarks Nationalbank temporarily modifies minimum proposal and/or minimum order quantity in case of exceptional market circumstances by contacting MTS Denmark or Denmarks Nationalbank directly. Once Denmarks Nationalbank reaches a resolution, MTS Denmark will then communicate it to all T- bill Market Participants. Article 14 - Quoting Commitments Set-up agreed by the Danish Debt Management Office and Primary Dealers of the Kingdom of Denmark implemented on 4 th January 2010 DKK- denominated Bonds: - Variable spread quotation: parameters with minimum quantities but with undefined spreads The Danish DMO decides the list of benchmark securities after consulting with the Primary Dealers. In addition, all new key on-the-run issues automatically receive benchmark status. Market making obligations in new key on-the-run issues will apply as soon as the outstanding amount exceeds DKK 5 billion. All benchmark securities are assigned to all market makers for compulsory quoting on the selected platform. Market making in liquid securities is not compulsory, but market making in this segment will improve the compliance ratio of a market maker. Each month, Maker Makers who are below 75% compliance threshold are considered not compliant. The compulsory quantity will depend on time to maturity of benchmarks, whereas the compulsory quantity on liquids will be independent of time to maturity, as per table below: 8

EUR-denominated bonds: No quoting requirements Treasury Bills: As discussed during the Primary Dealers meeting held on 3 rd June 2010 and subsequently ratified by the Market Operations Committee on 8 th June 2010, market making obligations in new Danish Treasury Bills (DKT) will apply as soon as the outstanding amount exceeds DKK 4 billion. Max. b/o spread T-bill Securities Min. quantity Bucket A 4 DKK 100 million Bucket B 4 DKK 100 million Spread for T-bills are expressed in yield tick equivalent. Participant s compliance on MTS Denmark are not taken into consideration during one month period after entering the System for the first time. Compliance to quoting requirements will be monitored by the Danish DMO, who receives a detailed daily report of participants performances automatically generated from the MTS System. In case a participant shall have any queries about their performance, they should make their enquiries directly with the Danish DMO. Procedure for participants quarterly average adjusted compliance to quoting Commitments Variable spread quotation: parameters with minimum quantities but with undefined spreads (in use since July 2013) Market makers have the option of receiving daily compliance reports upon request containing information on the Best 5Hrs Spreads (5HrSp), the Quantity during best 5Hrs Spreads (5HrQty), the Quotation time and the Compliance Ratio (in %). The compliance ratio is calculated based on the banks performance for the items previously mentioned compared to CompSp and the CompQty. This data would provide simple and straightforward information on relative secondary market performance. If you would like to apply to this service, please send an email to mtsam@mtsam.com Calculation of Compliance Ratio for one security: Definition: 1. Quotation Time. This data provides the total time the security was quoted with quantity higher than or equal to CompQty. 9

2. Best 5Hrs Spread (5HrSp). This is the time weighted average spread of the best (i.e. sharpest quoted) 5 hours of each security, where the quantity was higher than or equal to CompQty. In case the Market Maker has quoted less than or equal to 5 hours, the time weighted average spread of the total quotation time will be provided here. 3. Quantity during Best 5Hrs Spread (5HrQty). This is the time weighted average quantity expressed in DKK million, quoted during the 5HrSp. In case the Market Maker has quoted less than or equal to 5 hours, the time weighted average quantity of the total quotation time, with quantity higher than or equal to CompQty, must be provided here. A Market Maker s compliance against quoting requirements will be evaluated on a quarterly basis, based on 5HrSp with (5HrQty CompQty) and (5HrSp CompSp). The daily competitive spread in security s is calculated as: CompSp s = κ 5HrSp quoting MarketMa ker s # quoting MarketMa ker s As a starting point, κ is set to 1.25. The magnitude of κ is subject to subsequent adjustments. For benchmark & liquid securities, the number of assigned Market Makers will be equal to the number of Market Makerswhich quote prices in a specific security acc²ording to the CompQty. To be included as an assigned Market Maker in benchmark & liquid series, a Market Maker will not have to quote prices for the compulsory 5 hours. However, the compliance ratio can never be 100 per cent if the quotation time is below 5 hours, see below. If a Market Maker has quoted prices in a security with (5HrSp CompSp) and (5HrQty CompQty), then the compliance ratio in this security will be: s CR s Quotation times = min ; 1 5 In other cases, the compliance ratio in the specific security will be zero. Daily and Quarterly CR The daily CR (DCR) is calculated as: CR i i benchmark series ( 1 ) DCR = α + α # benchmark series # liquid CR j j liquid series series With α set to 0.8 initially. The level will be subject to subsequent adjustments. That is, a Market Maker that only quotes in benchmark series cannot achieve a DCR higher than α independently of the number of benchmark series. 10

The daily CR of each market maker will be excluded when the average daily compliance ratio of all the market makers is below 50% on that day, except when their daily CR is beneficial for them on that day, when calculating their Quarterly Compliance Ratio. The quarterly CR (QCR) is the sum of all DCR ratios divided by the total number of working days, i.e. The number of working days may vary between Market Makers depending on holiday calendars. A Market Maker is defined as a Liquidity Provider during a quarter if and only if his QCR, duly corrected in case of any technical problems, exceptional circumstances and problems of other nature as communicated to MTS Denmark by the Market Maker or other parties, is at least 75 per cent. Article 15 Suspension of Quoting Commitments on Tradable Securities A participant shall be exempted from MTSDk compliance calculations to define Liquidity Providers on the days which are recognized public holidays in the participant s country of system connection or, if communicated in written form by the participant, in the location where actual trading is performed, such that the Market Maker is not in default of its undertaking for not complying with its requirements on such days. For more details, please refer to Article 14 of these Specific Market Rules. Article 16 Assignment of Securities to Market Makers Set-up agreed by the Danish Debt Management Office and Primary Dealers implemented on 4th January 2010 1. DKB. Market makers have quoting commitments on all DKBs. 2. DKL Market making in liquid securities is not compulsory, but market making in liquids will improve the compliance ratio of a market maker. However, only market making with quantity higher than or equal to the compulsory quantity will be included in the compliance calculations. 11

3. DKT Market makers have quoting commitments on the listed T-bills under the following conditions: - T-bills must have a remaining maturity of more than 1 month, i.e. market making obligation of a T-bill will always end on the final trading day of March, June, September or December; - Quoting Obligation start on the first trading day following the opening auction; - T-bills must have an outstanding amount of at least DKK 4 billion 4. DKS Market makers do not have quoting requirements on DKS 5. KOD Market makers do not have quoting requirements on KODs There has been no bond listed under the KOD segment since November 2010. 6. DIL Market makers should quote the DIL segment, which might as well include benchmark bonds, as per the DGDM s guidelines. For more information on any of the items above, please contact mtsam@mtsam.com Article 17 Quotes In addition to the provisions specified in MTSAM Common Market Rules, MTS Denmark has further specific provision regarding the contribution of Quotes: 1. Contribution of Quotes in DKB, DKL Segment must be made in price. 2. Contribution of Quotes in DKS & DKT Segment must be made in yield. SECTION VI CONTRACTS Article 18 Trades Article 19 Types of Contracts Article 20 - Procedures for the conclusion of contracts 12

Article 21 - Clearing and settlement of contracts 1. DKK-denominated securities The System will be connected to VP Securities Services via the SWIFT network. The System will send real time instructions to VP Securities Services on behalf of System Participants. Institutions will receive the matching status reports and the settlement status reports from the VP Securities Services in the usual manner. Transactions executed on MTS Denmark will be distinguished by a special reference code. At the end of the trading day, System Participants receive detailed trading activity reports, with settlement details, through MTS Denmark activity pages on the System. At present MTS Denmark Participants can be Direct Clearing customers in VP Securities, with the possibility of using an account controller to maintain their account, or Indirect Clearing Customers in VP Securities via Clearstream Banking Luxemburg or Euroclear Bank Brussels. Each market participant must execute a standard "Power of Attorney" provided by VP Securities granting MTS Associated Markets SA/NV authorisation to report trade transactions to VP and be informed of potential fails. Those participants making use of a custodian bank must sign with the custodian a standard contract provided by MTS Associated Markets SA/NV. On the Power of Attorney each System Participant must specify the account number he wants to be operated. Every participant will be allowed to use only a single account for clearing transactions executed on MTS Denmark. 2. EUR-denominated securities. The System will send real time settlement instructions to Euroclear and Clearstream Banking on behalf of both System Participants. Each settlement instruction will include all the settlement details, including the settlement amount calculated by the system. The Bridge existing between Euroclear and Clearstream Banking enables settlement of transactions executed by counterparts having accounts open with either agent. Institutions will receive the matching status reports and the settlement status reports from to Euroclear/Clearstream Banking in the usual manner. Transactions executed on KOD will be distinguished by a special reference code. At the end of the trading day, System Participants receive detailed trading activity reports, with settlement details, through MTS Denmark activity pages on the System. 13

System Participants will authorise to Euroclear and Clearstream Banking to settle instructions sent by MTS Associated Markets by executing Power of Attorney arranged by Euroclear/Clearstream Banking in favour of MTS Associated Markets. On the Power of Attorney each System Participant must specify the account number he wants to be operated. Every participant will be allowed to use only a single account for clearing transactions executed on MTS Denmark. Executing the Power of Attorney, System Participants also authorise the Company to receive a daily fail report with indications of the trades either not settled on the value date, cancelled or modified by members. Article 22 - Settlement cycle 1. DKK-denominated securities. The settlement cycle will follow the Danish holiday calendar. 2. EUR-denominated securities. The settlement cycle will follow Target calendar. Article 23 Cancellation of trades Article 24 Law governing contracts SECTION VII PROVISION OF INFORMATION Article 25 - Provision of Information to Participants Article 26 - Provision of Information to the authorities Article 27 - Provision of Information to the issuer 14

SECTION VIII SUPERVISION AND SANCTIONS Article 28 - Verification of regular course of trading Article 29 - Breach of Participant undertakings Article 30 - Procedure in respect of Article 30 (Breach of Participant Undertakings) Article 31 - Adoption and enforcement of sanctions Article 32 - Automatic suspension from trading SECTION IX FINAL PROVISIONS Article 33 - Liability Article 34 - Disputes 15