1. Stage Participant Access Portal Central Server Log How The Electronic Process Works Price and Results

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2 1. Stage Access Portal Central Server Log How The Electronic Process Works Price and Results Stage Autilla Contact Details

3 The following methodology seeks to replace the manual modes of execution with an electronic process of the silver fixing as it currently occurs. The new architecture strives to keep the existing spirit, tradition and prestige of the current procedure while adding new elements to create a process which is more efficient, transparent, well-documented and regulatory compliant. 1. We replace the old system of communication via telephone with an electronic connection to a central server. 2. Each participant has a portal to connect to the central server. 3. The system algorithm suggests the first price and inputs it from a market data spot feed when all participants are present and logged in. An indicator light tells when participants are present. 4. All participants can enter orders, withdraw orders( FLAG ) or indicate no interest from their portal. 5. When all participants have entered their interest at the current price level; the system will attempt an automated match. 6. On a successful match (currently 300 bar tolerance), the system will create the matching trades and send to STP. 7. On a failed match, the procedure is tried again with a suggested price input from the system algorithm. 8. An automated live pricing commentary will be available in real time for distribution to participants clients and wider audience. 9. The central server handles: Price submission orders between the participants; Order processing and matching; Trade confirmation and straight through processing; Keeping a time-stamped log of all price events for regulatory purposes; Automation of settlement commentary. 3

4 Each participant has its own order portal on their local machines. For simplicity of demonstration, we have assumed a process with 3 participants. In a live process, the architecture can accommodate as many participants as necessary. On logging in, each participant will get a unique portal for submitting orders with the rest of the participants. The user can see which participants have logged in. Green status indicates that a participant has logged in. The current suggested price is entered and displayed here. A drop down list lets the user indicate: buyer, seller, or no interest. A press of the order button puts the order into the session. The user enters the order quantity here. Clicking on the flag button withdraws/suspends the current order. The message box displays activity. 4

5 The official event log will keep a time-stamped record of each event that happens during the session: login/out, order placement/amendment, prices tried, quantities at each price. The platform will automatically generate a live commentary data stream which will be available on a feed in real time for clients of fixing participants and a wider audience to view. The official event log keeps a time-stamped record of all events. In the examples in this document, neither the participant nor the general public have access to all of this information. The participant can see: 1. The suggested price. 2. When a participant logs in or out 3. When a participant submits or withdraws an order ( but not the order details). 4. The resulting number of buyers/sellers/no interest and amounts offered/wanted at each attempted price level. 5. The resulting participant trades and prices. Information available to the general public is: 1. The suggested price. 2. The resulting number of buyers/sellers/no interest and amounts offered/wanted at each attempted price level and final prices. The level of information visibility in this document is for example only, with the actual requirement on visibility in real time to be decided and agreed upon. 5

6 1. The process can begin when all participants have logged in and their status is shown in green. 2. When the process has begun, the server generates the first price to try. 3. The user can then enter his order in the appropriate textboxes and hit the Place Order button. At this point, his order will be logged onto the server and his Orders In status will go to green showing all participants that his order is in. 6

7 1. When all orders are in, the server will attempt a match. If the amounts bid versus offered are within a 300 bar limit, then the server will announce that a Price match has been reached. It will then show final price details and trades and send the trades to straight-through-processing. Additionally, all details and logs as required will be electronically sent to the relevant parties. The server will attempt an instantaneous match when all lights are green. Total number of buyers and sellers and total bars bid and offered are shown here. 3 buys 200 bars from participant 1. In this scenario a reduced amount because there was a total of 150 bars more wanted. 2. All details are posted on the log for further distribution. Each Order is logged as it is entered. Settlement price in USD is shown here. The Price in GBP and EUR is calculated by taking the GBP and EUR currency rate automatically from the relevant feed at the time of the trade match 7

8 There have been suggestions that the eventual solution for the daily silver price should be open to a much wider participation group, where clients of the current participants can connect and participate directly. Stage 2 of the platform would provide wider access with all participants orders entered directly in to the platform but routed through their credit give up. The system remains the same where a suitable CCP is engaged for credit settlement. We would suggest the following modifications which could be decided on for a second phase of the daily silver solution: 1. Participation in the Stage 2 LDSP for any participant would be voluntary meaning that the process would not wait for all users to enter an order and a flag would not stop the process. 2. Each try of a price by the system algorithm would be time based and the volume match would be based on the orders in the system at that time. 3. Participation would not be an obligation, participants would be made aware of the number of participants logged in for a session. 4. Each client and house account sees only their own individual orders. 5. Resulting trades would be designated according to credit lines between all the participants simultaneously and the system would issue trade confirmations. Client Client Client House 8

9 Mike Greenacre - CEO: mike.greenacre@autilla.com Tel: +44 (0) Mob: +44 (0) David O Neill Manager Metals Broking david.oneill@autilla.com Tel: +44 (0) Mob: +44 (0) Rory McVeigh Metals Broking/Physical rory.mcveigh@autilla.com Tel: +44 (0) Mob: +44 (0) Ken Oliver Development Manager Ken.oliver@autilla.com Tel: +44 (0) Mob: +44 (0) Web: Autilla Limited is an appointed representative of Linear Investments Limited, which is authorised and regulated by the Financial Conduct Authority (FRN no ). Autilla Limited is incorporated in England and Wales under the Companies House number The contents of this document are confidential and remain the intellectual property of Autilla Limited, they are intended for the recipient s information only and should not be transmitted to any third party outside the recipients place of business without prior permission from Autilla Limited. 9