YSX works as a clearing institution, a Central Counter Party (“CCP”), according to section 51 of the Securities Exchange Law.

YSX calculatestrading position of each SCand replace claims and obligations between SCs into ones between each SC and YSX in a scheme of novation.

YSX offsets claims and obligations between YSX and SCs in a netting processon a multilateral basisand reduces settlement risks associated with stock trading.

After netting process with fixing the amounts of securities and funds to be deliveredfrom/to SCs, YSX gives transfer instruction to the transfer institutions for settlement procedure on T+2 day after stock trading.

YSX is the transfer institution for securities settlement and a fund settlement bank, KBZ Bank Ltd., is atransferinstitution for fund settlement.

Securities and fund settlement are conducted account transfer, book-entry transfer, between YSX and each securities company in the transfer institutions.

To prevent a loss of principal, DVP (Delivery Versus Payment) settlement is introduced in the settlement scheme.

Shares are delivered on the condition that the corresponding cash payment is completed in case of a net buyer securities company while cash payment are received on the condition that the corresponding shares are delivered in case of a net seller securities company.

Share certificates of listed companies become invalid when a company gets list on YSX and shareholders information is registered as electronic data in YSX and SCs ICT system (“script less” or dematerialization scheme”).

Share transfer arising from stock trading at YSX is conducted through a process of increasing or decreasing of the numberof shares registered in YSX and SCs ICT system on T+3 day.

Cash payment arising from stock trading at YSX is conducted between settlement bank account between YSX and SCs with a fund settlement bank on T+3 day.