Sibiu Exchange

Romania

 OWNERSHIP STRUCTURE:

Commercial Banks

Securities Companies

Futures Brokerage Companies

Private Companies

Public Companies

BOARD OF MANAGING DIRECTORS:

Chairman Mr. Teodor ANCUŢA

Members Mr. Radu LUPUŢI

Mr. Marius TRIF

Mr. Octavian MOLNAR

Mr. Dan DRAGOMIR

Deputy Chairman Mr. Darius CIPARIU

Directors Mr. Radu BÂLBÂIE

Mr. Ioan ALEMAN

MAIN ACTIVITIES

Transactions for futures and options on futures

Intensive courses for brokers and others employees of brokerage agencies

Education programs (seminars, symposia):

1.339.597

PRODUCTS AND SERVICES

Futures – currency rates:

- RON/USD

- RON/EURO

- EURO/USD

Single stock futures::

- DESNP

- DESIF 1

- DESIF 2

- DESIF 3

- DESIF 4

- DESIF 5

- DETLV

- DEBRD

- DEAZO

- DEATB

- DEOLT

- DEBCC

- DERRC

- DEIMP

- DECMP

- DEBIO

- DEBRK

-DETBM

-DEALBZ

-DEARAX

-DEARCV

-DECOMI

-DEDAFR

-DEIPRU

-DEOIL

-DETEL

Futures on indices

- DESBX 9

- DESBX 18

Interest rate futures:

- BUBOR 3

Commodity futures

-SIBGOLD

Options on each futures contract

Trading activity:

Number of contracts: January-December 1998: 193,336

Value of transactions: ROL 1,260.87 billion

Number of contracts: January-December 1999: 175,243

Value of transactions: ROL 1,860.27 billion

Number of contracts: January-December 2000: 205,288

Value of transactions: ROL 2,506.47 billion

Number of contracts: January-December 2001: 188,973

Value of transactions: ROL 2,028.07 billion

Number of contracts: January-December 2002: 292,369

Value of transactions: ROL 2,660.29 billion

Number of contracts: January-December 2003: 187,914

Value of transactions: ROL 1,939.99 billion

Number of contracts: January- December 2004: 75,871

Value of transactions: ROL 806.622 billion

Number of contracts: January-December 2005: 707,738

Value of transactions: RON 1,018,613,297

Number of contracts: January-December 2006: 4.268.709

Value of transactions: RON 9, 74,275,705.37

Number of contracts: January-December 2007: 3.490.923

Value of transactions: RON 11.760.729.078

BRIEF HISTORY

The Sibiu Exchange was founded in December 1994 as a corporation owned by its 14 shareholders. In July 1997 SMFCE became the first financial futures and options exchange in Romania, playing an important role in offering an effective and efficient risk management and trading facilities.

The creation of the first futures and options on the Romanian exchange was a major step towards achieving the goal of transforming the former commodities exchange into a national center of finance where participants at the market have the opportunity to hedge their risks or to profit from price movements using derivatives instruments.

All trading members of SMFCE have full and direct access to the trading facility of SMFCE and may also choose to become clearing members, which enables them to have access to the clearing facilities provided by The Romanian Clearing House.

Every trading member-title offers the holder the right to execute trades in any contract listed on the Exchange.

Partnerships, companies and corporations that want to enter the futures markets of Sibiu Monetary-Financial & Commodities Exchange may buy or lease an available membership belonging to a full member.

Until June 1st 2000, all futures and options trades took place in special designated pits, via a system known as the open bidding auction. Since June 1st 2000, the trading system of the regulated markets at SMFCE and RCH has been the electronic SAGGITARIUS FUTURES & OPTIONS TRADING (SFOT). SMFCE's fully automated computer trading system - SAGGITARIUS - manages the input and matching of buy and sell orders and the execution of settlement procedures, as well as the dissemination of real-time data to members. The ability of SMFCE’s computer trading systems to process large volumes of transactions quickly and accurately supports the Exchange's fast, transparent, and secure trading.

SMFCE, as a financial futures and options exchange, offers an efficient price discovery mechanism and a risk transfer capability which has become absolutely necessary to both corporate and individual investors. At SMFCE, the financial integrity of the marketplace is of outmost priority and the Exchange has spared no resources in ensuring that its Financial Safeguard System is properly implemented. The SMFCE Financial Safeguard System has certainly stood the test of 5 years of activity and has weathered periods of uncertainty and volatility. It is quite obvious that it has achieved its state purpose, but it is one that is continuously evolving to better cater to the growing demands and changes that face the futures industry.

Since October, 2000 - the futures and options contracts listed at SMFCE are traded via Internet from any place of Romania. In September 1st, 2003 a new electronic trading platform, ELTRANS was implemented.

June 24th, 2003 - SMFCE became the first exchange authorized by the National Securities Commission - the Romanian regulation organism. SMFCE also became professional training organism for market operators (brokers and traders) and financial specialists.

In 2005 the activities of Sibiu Monetary-Financial and Commodities Exchange were focused on the expansion of the product range and the broadening of the market participant base.

In 2006 a series of important achievements were accomplished: during the first half of 2006 SMFCE was authorized by the NSC to operate the derivatives exchange DE (decision 356/31.01.2006), also during the first semester of 2006, Sibiu Exchange has enlarged the financial derivative instruments portfolio- starting with July 2006 there were released two new financial derivative instruments, i.e. futures and options contracts on BIOFARM BUCUREŞTI and SSIF BROKER CLUJ NAPOCA stocks and also were introduced the settlements for 9, 12 months, respectively, which are available for the derivatives on SIF 2 Moldova, SIF 3 Transilvania, SIF 5 Oltenia, DESNP, DERRC and DETLV stocks, as well as on the RON/EURO and EURO/USD parities.

Also starting from November 1st, futures and options contracts covering two new financial instruments were launched: the indices SIBEX 9 covering the financial sector in Romania by tracking 5 ETF’s stocks, 3 representative banks and one traded market intermediary – and SIBEX18 – considered a broad-based index for the capital market because it tracks the evolution of a portfolio containing 18 stocks from different sectors.

At the beginning of the year 2007 the order routing trading platform “Web Trader” was launched whose purpose is to link the customers of the Exchange to the Eltrans trading platform, via Internet. This way any customer has the possibility to see the market and trade electronically. In July 1st, the futures contract SIBGOLD was launched, contract that has as underlying asset the parity USD/GOLD and the options contract OPSIBGOLD that has as underlying asset the futures contract SIBGOLD. Also in July, 1^st, the futures contract DETBM was launched, contract that has as underlying asset the shares of TURBOMECANICA BUCUREŞTI and the options contract OPDETBM that has as underlying asset the futures contract DETBM. In October 1^st, 8 new products that have as underlying assets shares of companies listed on the spot market: IPROEB BISTRIŢA, IMOSTRUST ARAD, ALBALACT ALBA IULIA, ARMAXGAZ MEDIAŞ, DAFORA MEDIAŞ, OIL TERMINAL CONSTANŢA, CODMAG BRAŞOV and TRANSELECTRICA BUCUREŞTI were launched. In October 2007, the Warsaw Stock Exchange became shareholder of Sibiu Exchange. Thus WSE holds 1.8% of the Sibiu Exchange share capital. The acquisition of the Sibiu Exchange shares is the first equity investment in the WSE’s history in the pursuit of the strategy of developing transborder centres of securities trading in Central and Eastern Europe. The event marks another step in the development of cooperation between the WSE and Sibiu Exchange. Also, another two important companies joined the shareholders structure of SMCFE in October 2007: Morgan Stanley Investment Bank and The Romanian-American Investment Fund SIRA.

PROJECTS AND STRATEGIES

SMFCE objectives and strategies are:

Strengthening its well-functioning markets, stabilizing its turnover and increasing its liquidity.

One of the most ambitious projects of SMFCE is to establish a spot market in Sibiu. For this reason, WSE represents an important partner. WSE and SMCFE will develop a series of long term projects to exploit the huge potential of the domestic capital market the main objective being to establish the spot market in Sibiu and to build an important company for the regional financial environment. In order to bring new investors at the Exchange and increase the liquidity, another major project is to launch the market-making activity. All over the financial world, the market-makers contribute to market diversification. Therefore, Sibiu Monetary and Financial Exchange is engaged in projects aiming at managing and disseminating the market-making activity.

Another important project is to continue the financial derivatives marketing and present their advantages such as:

• Short selling
• The opportunity to win on both sides of the market (high and low)
• High leverage meaning low investments
• Low costs of transactions
• Different types of strategies: speculation, arbitrage, hedging