Fintechisrael November Event Presentation 11.22

November 24, 2009 b

Formal Agenda • Introduction & Announcements

• Remarks from Dr. David Gershon Remarks from Dr David Gershon

• Presentations from

The Recanati Alumni Association: The Alumnus's Life-long Companion The Recanati Alumni Association - home to over 17,000 7, graduates off the Faculty g y off Management, Tel Aviv University, among them - leading figures in Israel's business community.  Networking events with leading figures from the business world and the academy

Reuven Covent

Hagi Golan

Chemi Peres

Zohar Zisapel

     

Erez Vigodman

Guy Rolnick

Industrial tours Career workshops & placement services The first and only Israeli chapter of Beta Gamma Sigma – The international honor society recognizing business excellence since 1913 Debate Club A Annual l ffaculty lt jjournall Chapters abroad: New-York, Boston, Chicago and Silicon Valley

Contacts: Dean – Professor Asher Tishler Director of Global Relations & Development – Ms. Irit Kassif Director of Alumni Association – Mr. Jonathan Penn Alumni Relations Coordinator – Ms. Yafit Cohen-Hadari Project Coordinator – Mr. Ofer Lifshitz

About Greylock • Founded in 1965 and currently on 13th fund (just closed, oversubscribed at $575M USD) • The firm is based in San Mateo (Silicon Valley), with offices in Boston, Hertzliya and Bangalore • Key US investments include:

• Greylock began investing in Israel in 2001, and opened a dedicated fund in 2006 of $200M USD Israel Team Israel Portfolio

DS Apex Mergers & Acquisitions DS Apex Mergers & Acquisitions • Investment banking arm of DS Apex Holdings Group • Advice on mergers & acquisitions and private fundraising • Partner offices across Europe, North America, South & Central  America, Asia, and Australia • CEO, Yair Ephrati • DS Apex Holdings Group  • M&A and private fundraising, underwriting,  brokerage, and  asset management • $12 Billion under management  • Leading underwriter of both debt and equity on  • Member of and traded on the Tel Aviv Stock Exchange, and part  of the Tel Aviv 100 Index

Investors

Entrepreneurs I d Industry P Professionals f i l

Students / Alumni PLEASE RETURN THE BADGES TO THE BOX OUTSIDE j g , y g y To join our mailing list, leave your card in the badge you return

Who’s Here

“The The goal of FinTechIsrael goal of FinTechIsrael is to bring together Israeli Startups,  is to bring together Israeli Startups Industry Professionals, and Investors to foster innovation in the world  of financial services”

Our Focus

The Plan Speakers. Startups. Networking. Every 8 Weeks. Website. Blog. Twitter. Facebook & LinkedIn Groups. Affiliations with NetBanker. BarCampBank. MIT Forum. 

Seeking Web Journalist(s) • Help develop content on  Help develop content on the FinTech space,  including commentary  and interviews with and interviews with  Israeli firms/startups Seeking Site Designer Seeking Site Designer • Work on further  developing the site and  build better features for build better features for  our membership

Join Us. Help Us. Spread the word.

PayPal X Developer’s Challenge $150K prize to best Applications • Paypal’s Open API and ‘Adaptive Payments’ service allows teams to build sophisticated payment applications leveraging Paypal’s payment infrastructure • Adaptive Payments is a money movement service that can be adjusted according to your business needs • Specifically, the service allows for: – Modular Approval: Allows businesses to determine the order and mechanism in which they obtain payment details and approval; Web, mobile, future or custom future approval methods are possible – Pre-Approval: For one-time, multi-use and subscription payments (including an optional configurable PIN identification) – Parallel and chained Payments: Single payment to multiple receivers, ideal for marketplace payments, multi-merchant checkout, and commission-based payments

More details can be found by contacting: Oded Zehavi Manager of Paypal Israel and South Africa [email protected]

or by y visiting g

www.x.com

Dr. David (Dudi) Gershon Founder and CEO of SuperDerivatives P t P iti Past Positions • Global Head of FX Exotic Options for Barclays Capital, UK • Options Trading at BZW New York (became Barclays  Capital) & Deutsche Bank

Education • PhD in Theoretical Physics • MBA and MSc in Finance

About the Keynote

Transparency and d efficiency ffi i in the global derivatives market David Gershon March 2009

Copyright © 2000-2009 by Super Derivatives, Inc. SuperDerivatives Proprietary and Confidential. Please do not distribute in any manner without SuperDerivatives' prior written consent.

About me • In May 2000 left Barclays to start SuperDerivatives. • Until May 2000 -Global head of exotic options at Barclays Capital in London. • Previous positions on Wall Street: - Head of emerging markets at Barclays NY - FX options trader at Deutschebank NY - Mortgages derivatives at Nationsbank (now Bank of America) e ca) ________ • Ph.D. in Theoretical Physics (Superstrings theory) – Tel Aviv University y • M. Sc. in Finance - Kellogg School of Management • MBA major in Finance - Tel Aviv University

November 09 13

SuperDerivatives p ( (SD) )

• A global technology and service innovator providing multi–asset derivatives analytics, data and business process tools for all derivative market participants

• Our ambition is to become the undisputed global category leader for products and services delivering information and transparency to the derivatives market • Offices in London, New York, Tokyo, Singapore, Sydney, Hong Kong, Mumbai and Tel Aviv

November 09 14

SD history and milestones • First pricing platform was launched in January 2001 – An internet platform to price currency (FX) options – First financial application for banks on the internet – By June 2001 we had Merrill Lynch, Bank of NY, Bear Sterns and Commezbank as paying clients. clients • 2002 First tier one bank roles the platform globally – After the merge of JPMorgan and Chase the FX business took SD system for all the sales people and traders globally (150 licenses). • 2003 – Distribution agreement with Reuters – In 2003 we signed a distribution agreement with Reuters- the biggest player in FX. • 2004 – From pricing to risk management – The launch of a full fledge risk management system to handle accurately the complexity of exotic options. First software as a service (SaaS) risk management solution for currency options • 2005 - From F single i l assett to t multi lti assett – In 2005 we launched our pricing & analytics platforms for interest rates, equity, commodities & energy.

November 09 15

History and milestones – Cont’ • 2006 – On-line execution capabilities -We launched our on-line execution platform for options.

The web solution is used either as an internal (sales – traders) or external t l ((clientsli t sales) l ) application. li ti

• 2007 – Launching credit derivatives

– In mid 2007 we launched our pricing & analytics platforms for credit dit derivativesd i ti th “hottest” the “h tt t” market k t then. th

• 2007 – Creating a business unit for revaluation services

– Aft After we d developed l d th the capabilities biliti tto price i credit dit d derivatives i ti we became a leading player in the global revaluation market with the capability to price any derivative.

• 2008 –Multi Multi asset risk management platform ‘light’ light ; CRM system for financial institutions

– In mid 2008 we launched our ‘light’ multi asset risk management platform aimed as a low cost solution. – Leveraging g g on this technology gy we also launched a client relationship management (CRM) system for banks sales people. November 09 16

The Issues SD Addresses • There are many option classes within each asset –Foreign exchange, commodities, interest rates, equities, energy and credit • The market lacks transparency: a large percentage of the OTC market participants deal in options without fully knowing the prevailing market price • The cost to build in-house solutions is prohibitive and the expertise is scarce • Customers at all levels are more sophisticated requiring an increased focus on accuracy and efficiency to increase productivity within banks • There is no published model that can accurately reflect the market at all times • Market participants would like to use real market prices when they price,, risk manage p g and evaluate their positions p

November 09 17

SD pricing solutions • Trusted, independent pricing – Real-time, accurate, multi-asset pricing for all structures g a unique q and p proven methodology gy through – Across FX, equities, commodities, energy, interest rates and credit – A true reflection of real market prices (bid & offer)

• SD’s built in models and market data reflect fair market value of priced derivatives, enabling: – Sales teams to give indicative pricing for the widest range of asset classes and instrument types in a quick and intuitive manner – Traders to obtain reference prices while negotiating with counterparties – Treasurers to obtain an accurate price reference point when getting a quote from a bank

November 09 18

SD markets coverage • Wide coverage – from vanillas to advanced instruments SD enables standardisation of derivatives structures across the following asset classes: – FX: extensive range of currencies including major (G7) and emerging markets and illiquid currency pairs – Interest rates: major and emerging markets – Equities: >3,000 single stocks and all major indices in all major exchanges – Energy: Oil and Oil products of the world’s largest refineries, natural gas in numerous hubs, electricity in Europe, US and Australia, emissions, coal. – Commodities: precious and base metals, agriculture and soft commodities in all global exchanges and markets – C Credit: edit >1500 single names and all majo major indices

November 09 19

SD Products • Richest derivatives coverage – Multi asset derivatives expertise – Comprehensive model library

• Access to all – Banks, funds, corporates, custodians and auditors y and sell-side – Services for both buy– Including multi-asset reference data

• Market innovation – Multi-asset derivative analytics, y risk, revaluation, productivity p y and performance, and operational support – Global infrastructure servicing clients in every part of the world – Business process tools for all derivatives market participants

•

A global business – – – –

Thousands of users in every region of the world Global and regional banks Derivative market convention expertise globally Scalable Scalable, real real-time time infrastructure

November 09 20

Revaluation • We provide fully automated portfolio revaluation services in all the asset classes and derivatives types • We provide on-demand analytics for middle/back office functions • We provide customer revaluation of structured products and notes • We anticipate significant growth in the revaluation business in the current environment • We have a strong integration team that enables the flexibility to use the client’s format.

November 09 21

Revaluation

November 09 22

The Target market The total market size consists of about 120,000 derivatives professionals, potential revenue of $2B per year.

• Global, regional and local banks in all continents- 850+ • Alternative (hedge funds) and traditional asset managers-5000+ • Custodians and administrators- 50+ • Corporations Corporations- 1500+ • Brokers- 10+ • Global and regional auditors-10+ • Regulators and Central Banks-20+

November 09 23

Our Business Model • All our products and systems are web based (enables frequent, seamless upgrades in an ever changing market). We only have one system for all the clients (but extremely flexible and customizable) • Our systems are sold on a subscription basis with annual renewal. • Payment for a year in advance for the services • Flat fee PER PERSON with unlimited usage of the system and free upgrades. • The fee for the Pricing and analytics systems is between $15-24k per year The fee for the risk management system is between $150 year. $150-500k 500k per year. • Revaluation services are sold on per-line basis

November 09 24

Business model - cont. • We only do direct sales • Huge investment in training of our sales force and R&D • Monitoring constantly the performance of our sales people • Extremely devoted to our clients • Maintain a special “echo system” with our clients for constant feedback on real time basis • Provide our clients with delivery y dates for feature they y request q (and ( at no cost) • We are the cutting edge systems in derivatives thanks to our (demanding) clients

November 09 25

SD Key advantages • Proprietary model that reflects f interbank prices for f derivatives • Portfolio of products with multi-asset and cross-asset capabilities • Solutions that are geared to increase customer productivity and profitability • Subscription model per person reduces up front cost • Strong brand recognition • Large client base in both the sell and buy side • Strong client relationships and a great ‘echo system’ with our clients • Global operations • Hi Highly hl skilled kill d employees l with ith extensive t i knowledge k l d off the th option ti markets

November 09 26

2009: Focus on cost control and risk management • Renewed focus from the market on: – Cost control – Risk management – Price transparency

• SD provides: – – – – – –

Cost control – software as a service Enterprise workflow Discovery for fair market value – independent pricing Effective analysis of risk Independent portfolio valuation Tools to help sales desks increase productivity

November 09 27

Thank You

Copyright © 2000-2009 by Super Derivatives, Inc. SuperDerivatives Proprietary and Confidential. Please do not distribute in any manner without SuperDerivatives' prior written consent.

November 09

Arnon Dinur

Yair Ephrati

Venture Partner Greylock Partners

CEO DS Apex Mergers & Acquisitions

About the Panelists

THE THE GUARDIAN ANGEL  GUARDIAN ANGEL THE HUMAN FACTOR IN THE CAPITAL MARKETS

Intro

Human Factor

Genetics Intelligence  Demographics

Constant

Education Information Experience

Saturated

Personality Perception Emotional bias Emotional bias

???

The Need Brokerage firms spend several hundred USD to gain a new trader.  However, 90% of new traders tend to wipe out their entire trading‐capital in  the first few months of trading, mainly due to psychological reasons: Emotions

Cognition

Fear of loss ("loss aversion") 

Perception

Confidence (under/over) 

Information processing load

Stress

Market awareness

Temptation to divert from plan

Decision making

C Competition with peers ii ih

Ri k M Risk Management

Coping with mistakes

Planning

The consequences: • For the traders – loss of assets • For F the th brokerage b k fifirms and d platform l tf providers – loss of investment, and loss of future commission

The Guardian Angel Solution  The Goal

Enabling traders to remain longer in trading, make more  volume and more commissions

Principles

1. Handling each trader individually g y 2. Measuring decision making effectiveness according to  market conditions 3. Providing ongoing feedback in real‐time

The Guardian Angel Approach The Trader I want to make money Did I do well? Should I close my position now? Where is the market going? I lost money – how do I get it back? Let’s try the 400! I can’t believe it…

The System 1. Ongoing feedback on each transaction and overall performance p 2. Support in known cognitive traps Reassurance Alert Pay attention to…

Trading Psychology Traps Leverage & Risk

Value at Risk

Depth of Losses

Striking

More… More

The Business Model Traders (end users)

Clients

Brokerage Trading platform

Monthly pay per trader

Service provider (SaaS)

The Retail Market # Traders (Global)

~20 million

Traders (Israel)

~25,000

Brokerage firms (global)

~8000

Annual commission Annual commission per  per trader

4000 $ 4000 $

GA annual cost

60 $

Global market size Global market size

1 2 Billion 1.2 Billion

Israeli market size

1.5 million

Thank you!

Oded Shefer, CEO oded@cbeyond‐tech.com 054‐6985589

Minimize Exposure Maximize Prevention www.SeqUR.Biz

Facts of life … CC Fraud Looking for a needle in a haystack – 1:10,000 • 9 out of 10 alerts turn to be False Alerts • 70% - Undetected Fraud • More then 5 Billion in the US alone. L ki for Looking f a chain h i A sequence is like a chain – easier to find them and easier to validate if they are legal or not More Detection with Less False Alerts

www.SeqUR.Biz

Tip … • Sequence – 196,000,000 results • Sequence of transactions - 2,830,000 results • “Sequence of transactions” - 2 results

www.SeqUR.Biz

Sequences vs. Single Actions 0.5%

1.5%

0.3%

8.2%

www.SeqUR.Biz

27%

5.3%

MDA2 Unique Features  Analytics

 

Broader coverage Higher accuracy

 Model

 

Constant update Customer level and up

 Rapid Implementation

 

Based on historical transactions Rapid mapping methodology

 Expandable and Highly Scalable

 

Multiple Parallel Processing (MPP) Use standard Blade servers

 Real Time

SeqUR – trying to do the unthinkable like Detect card fraud in www.SeqUR.Biz

speed

Thank You!

www.SeqUR.Biz

Company Profile November 2009

Mission Statement To provide transparency on financial products d t throughout th h t th their i lif life cycle l

Products A platform for financial advice. advice Established business in the domestic market. Providing transparency on structured products. Fast growing business in the global markets.

Modelity/Structures Status Summary Cli t validation Client lid ti Existing clients of different scales: tier 1-RBS, tier 2-Danske Bank and tier 33-Tapiola Tapiola

P Proven technology h l Sophisticated core engine already in production

Market size At least 2.5B USD and growing

Promising pipeline HSBC, JP Morgan, …

Modelity/Structures Architecture

Live Examples » Live examples for Sales & Advice Support, and for Post L Launch hS Support at: » Danske Bank » Royal Bank of Scotland