Hong Kong Exchanges and Clearing Limited — Remuneration Information 2013

Feb 27, 2013

Pursuant to Chapter 38 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Securities and Futures Commission regulates Hong Kong Exchanges and Clearing Limited in relation to the listing of its shares on The Stock Exchange of Hong Kong Limited. The Securities and Futures Commission takes no responsibility for the contents of this document, makes no representation as to its accuracy or completeness, and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.

(Incorporated in Hong Kong with limited liability) (Stock Code: 388)

(Incorporated in Hong Kong with limited liability) (Stock Code: 388)

2012 Remuneration Committee Report

As at 27 February 2013, the Board comprises 12 Independent Non-executive Directors, namely Mr CHOW Chung Kong (Chairman), Mr Ronald Joseph ARCULLI, Mr CHAN Tze Ching, Ignatius, Mr Timothy George FRESHWATER, Mr John Barrie HARRISON, Mr HUI Chiu Chung, Stephen, Dr KWOK Chi Piu, Bill, Mr LEE Kwan Ho, Vincent Marshall, Mr LEE Tze Hau, Michael, Mr John Estmond STRICKLAND, Mr John Mackay McCulloch WILLIAMSON and Mr WONG Sai Hung, Oscar, and one Executive Director, Mr LI Xiaojia, Charles, who is also HKEx’s Chief Executive.

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2012 REMUNERATION COMMITTEE REPORT

(Financial figures in this report are expressed in Hong Kong dollar)

The Remuneration Committee

The Remuneration Committee (RC) is delegated by the Board with the responsibility to establish, review, and make recommendations to the Board on the Group’s remuneration policy and practices to ensure that employees are fairly remunerated with reference to the Group’s and individual’s performance. The RC comprises 5 INEDs whose names are set out on page 9 of this report. Its detailed terms of reference are available on the HKEx website.

The RC held 10 meetings and passed 1 written resolution in 2012 and up to 21 February 2013. Members’ attendance records in 2012 are set out in the 2012 Corporate Governance Report.

Summary of work done in 2012/2013

• Adopted the annual RC Report

• Reviewed the remuneration level for Non-executive Directors and recommended increases for 2012/2013

• Engaged an external professional consultant to conduct a compensation study and, based on the study results, recommended the remuneration package for the renewal of the employment contract of HKEx’s Chief Executive

• Approved the remuneration packages for the new recruits as the Chief Administrative Officer, the Chief Financial Officer, and the Chief Regulatory Officer of HKEx

• Approved the remuneration level for LME’s directors

• Recommended the 2012 performance bonus and share award pools for employees

• Recommended the 2012 performance bonus and share award for HKEx’s Chief Executive

• Recommended the 2013 salary adjustment for merit increase, inflation, and promotion

Non-executive Directors’ Remuneration

Objective

To remunerate Non-executive Directors at an appropriate level for their commitment of time and efforts to HKEx and to ensure the attraction and retention of high calibre and experienced individuals to oversee HKEx’s business and development

Policy

• To conduct annual reviews with reference to companies of comparable business or scale, and recommend remuneration adjustments, if appropriate

• To seek the Board’s endorsement for and Shareholders’ approval on any recommended changes

Annual review for 2012/2013

An in-depth study of the level of remuneration of non-executive directors of HSI constituent companies, overseas listed exchanges, and major global and regional financial services companies was conducted. Professional advice from Egon Zehnder International Limited, an independent consultant engaged to perform the Board’s performance evaluation in 2011, was also sought. A recommendation to increase: (i) the remuneration of HKEx’s Chairman and each of the other Non-executive Directors; (ii) the remuneration of the chairman and each of the other members (excluding the Executive Director) of the Audit Committee, Executive Committee, Investment Advisory Committee, and RC; and (iii) the attendance fee in respect of each of the said committee’s meetings was then made to the Board. The proposal received endorsement from the Board and was approved by Shareholders at the 2012 AGM.

Annual review for 2013/2014

In consideration of the increases in Non-executive Directors’ remuneration for 2012/2013, macroeconomic factors, and the competitive environment, the RC recommended that the remuneration level for Non-executive Directors for 2013/2014 should remain unchanged.

Non-executive Directors are not entitled to participate in the Share Option Schemes or the Share Award Scheme, or to receive other fringe benefits.

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2012 REMUNERATION COMMITTEE REPORT

Non-executive Directors’ Fee for 2012/2013

Non-executive Directors’ Fee for 2012/2013
	2012/2013 2011/2012
	$ $
Board Chairman Board member * Audit Committee / Executive Committee * / Investment Advisory Committee / RC  chairman  member  attendance feeper meeting	900,000 550,000 600,000 385,000 120,000 90,000 3,000 100,000 70,000 2,500

• Excluding the Executive Director

Non-executive Directors’ Fee for 2012

Name	2012 2011
	$ $
Current Directors Ronald Arculli Ignatius Chan C K Chow1 Timothy Freshwater1 John Harrison Stephen Hui Bill Kwok Michael Lee Vincent Lee John Strickland John Williamson Oscar Wong Ex-Directors Laura Cha2 Moses Cheng2 Marvin Cheung 3	733,500 752,500 642,750 456,250 957,5274 – 532,500 – 835,777 4 431,250 642,750 453,750 756,750 551,250 643,250 451,250 756,750 566,250 675,750 476,250 865,250 618,750 645,750 451,250 116,250 451,250 116,250 451,250 – 107,500
Total	8,920,804 6,218,750

Notes:

1 Messrs Chow and Freshwater were appointed effective 23 April 2012.

2 Mrs Cha and Dr Cheng retired on 23 April 2012.

3 Dr Cheung retired on 20 April 2011.

4 Including a director’s fee of $57,527 to be paid by LME to each of Messrs Chow and Harrison for their directorships with LME during the period between 6 and 31 December 2012

Employees’ Remuneration

Objective

To ensure that employees are remunerated equitably and competitively with consideration of the achievement of their individual performance goals as well as the key business objectives at corporate level

Policy

• To recommend, based on up-to-date market information, the appropriate salary adjustments, if any, for the Board’s approval

• To evaluate the corporate performance based on a set of pre-determined measurements and recommend to the Board the appropriate level of performance bonus and share award pools for the year

• To consult HKEx’s Chief Executive about the individual performance of the Senior Management and ensure that they are remunerated equitably and in accordance with the established guidelines

• To review and recommend to the Board the remuneration of HKEx’s Chief Executive and ensure that he is not involved in the discussion and decision on his own compensation

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2012 REMUNERATION COMMITTEE REPORT

Review for 2012/2013

• The RC recommended and the Board approved in November 2012:

• (i) a salary adjustment effective January 2013 that covered merit increase, inflation, and promotion. The salary adjustment took into consideration the cost of living and projected pay increase in the financial services industry;

• (ii) a discretionary performance bonus for eligible employees in recognition of their contributions in 2012; and

• (iii) a sum of $112.4 million for the purchase of HKEx shares pursuant to the Share Award Scheme for 150 selected employees including HKEx’s Chief Executive and selected employees to be recruited in 2013.

• The performance bonus was determined based on the Group’s financial performance and achievement of strategic initiatives, as well as market, regulatory, and organisational development. Individual performance bonuses were then differentiated according to a 5-point performance rating scale, the employees’ grade level, and job function.

Further details of HKEx’s remuneration policy and structure are available in the Corporate Governance section of the HKEx website.

75 temporary employees (2011: 57).

A performance development process is in place to ensure that employees’ performance objectives are defined, their performance progress is tracked, and their training and development opportunities are identified. Further employee training details will be set out in the 2012 CSR Report and which will be available on the HKEx website in mid-March 2013.

Emoluments for 2012

Executive Director

Name	2012 Salary $ Cash bonus $ Other1 benefits $ Retirement2 benefits cost $ Director’s fee $ Total3 $	2011 Total3 $	2012
			Share 4 award benefits $
HKEx’s Chief Executive Charles Li	7,642,334 6,559,669 170,561 955,292 – 15,327,856	16,131,880	9,247,357

Senior Management

Name	2012 Salary Cash bonus Other1 benefits Retirement2 benefits cost Compensation for loss of office Total3 $ $ $ $ $ $	2011 Total3 $	2012
			Share4 award benefits $
Martin Abbott5 Mark Dickens Lawrence Fok6 Gerald Greiner Henry Ingrouille7 Kevin King Romnesh Lamba Henry Law Stephen Marzo8 Diarmuid O’Hegarty5 Christine Wong Samuel Wong9	377,288 458,357 4,237 64,132 – 904,014 4,467,600 2,978,400 67,354 558,450 – 8,071,804 2,448,000 – 745,863 306,000 – 3,499,863 6,000,000 3,000,000 126,250 750,000 – 9,876,250 1,451,613 2,250,000 41,769 181,452 – 3,924,834 3,198,000 – 60,754 399,750 – 3,658,504 4,467,600 3,723,000 84,216 558,450 – 8,833,266 2,754,000 1,377,000 56,548 344,250 – 4,531,798 2,295,850 – 49,236 286,981 – 2,632,067 253,005 245,897 3,377 25,299 – 527,578 3,427,200 3,998,400 125,108 342,720 – 7,893,428 731,613 – 214,139 91,451 – 1,037,203	– 9,365,317 5,126,171 6,858,466 – 3,605,078 9,373,049 4,889,186 – – 6,887,255 5,575,095	– 3,959,396 214,324 4,961,049 258,521 196,384 4,180,435 1,674,782 – – 2,142,390 (1,578,827)

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2012 REMUNERATION COMMITTEE REPORT

Notes:

• 1 Other benefits include leave pay, insurance premium, club membership and relocation allowance, as applicable.

• 2 An employee who retires before normal retirement age is eligible to 18 per cent of the employer’s contribution to the provident fund after completion of 2 years of service. The rate of vested benefit increases at an annual increment of 18 per cent thereafter reaching 100 per cent after completion of 7 years of service.

• 3 Excluding the shares awarded to HKEx’s Chief Executive and the Senior Management during the relevant years, details of which are set out in the Chief Executive’s and Senior Management’s Interests in HKEx Securities under Long-term Incentive Schemes section of this report.

• 4 The share award benefits represent the aggregate of the amortised fair value of the Awarded Shares of HKEx’s Chief Executive and the respective members of the Senior Management that were charged to the consolidated statement of comprehensive income for the year ended 31 December 2012.

• 5 Messrs Abbott and O’Hegarty became members of the Senior Management effective 6 December 2012. Their emoluments are for the period from 6 to 31 December 2012, with the amounts of cash bonus payable to them in March 2013. In addition, they are members of the LME pension scheme operating in the UK. The vesting scale of HKEx’s provident fund scheme as specified in note 2 above is not applicable to them.

• 6 Mr Fok retired on 1 September 2012.

• 7 Mr Ingrouille joined HKEx on 7 July 2012.

• 8 Mr Marzo joined HKEx on 26 June 2012 and resigned effective 13 January 2013.

• 9 Mr Wong resigned effective 20 March 2012.

Further details of Directors’ emoluments and the 5 top-paid employees as required to be disclosed pursuant to Section 161 of the Companies Ordinance and Appendix 16 to the Main Board Listing Rules are set out in notes 16 and 17 respectively to the consolidated financial statements for the year ended 31 December 2012.

Long-term Incentive Schemes

HKEx adopted the Share Award Scheme to recognise the contributions of certain employees and help retain them for the Group’s operation and further development. Prior to the adoption of the Share Award Scheme, HKEx had 2 share option schemes, the Pre-Listing Scheme and the PostListing Scheme, both of which ended on 30 May 2010.

Share Option Schemes

There are no outstanding options under the Pre-Listing Scheme. The unexercised options under the Post-Listing Scheme will continue to be valid and exercisable subject to the provisions of the scheme until the end of the exercise periods.

Movements in the outstanding share options granted under the Post-Listing Scheme during the year ended 31 December 2012 are set out below.

Date of grant Exercise price $	Number of shares issuable under the options As at 1 Jan 2012 Issued upon1 subscription during the year Cancelled/lapsed during the year As at 31 Dec 2012 Exercise2 period
Employees 31 Mar 2004 16.96 17 May 2004 15.91 26 Jan 2005 19.25	382,000 72,500 – 309,500 31 Mar 2006 – 30 Mar 2014 25,000 – – 25,000 17 May 2006 – 16 May 2014 577,600 49,000 – 528,600 26 Jan 2007 – 25 Jan 2015

Notes:

1 The weighted average closing price immediately before the dates on which the options were exercised was $117.23.

• 2 Options granted were subject to a vesting scale in tranches of 25 per cent each per annum starting on the 2[nd] anniversary and became fully vested on the 5[th] anniversary of the grant.

Further details of the Share Option Schemes are set out in note 40(b) to the consolidated financial statements for the year ended 31 December 2012.

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2012 REMUNERATION COMMITTEE REPORT

Share Award Scheme

The Share Award Scheme was adopted by the Board on 14 September 2005 (Adoption Date). The maximum number of shares which can be awarded under the scheme is 3 per cent (ie, 31,871,575 shares) of the HKEx shares in issue as at the Adoption Date and the maximum number of shares which can be awarded to a selected employee in the scheme is 1 per cent (ie, 10,623,858 shares).

In December 2012, the Board approved a sum of $112.4 million for the purchase of the HKEx shares for awards to the selected employees, including HKEx’s Chief Executive ($8.92 million), and a sum of $10 million for the purchase of the HKEx shares for selected employees to be recruited in 2013. Based on the Board’s recommendation, the Share Award Scheme’s trustee applied 103,116 HKEx shares held under the scheme, which were unallocated or forfeited pursuant to the scheme, to partly satisfy such award.

Further details of the Share Award Scheme are set out in note 40(c) to the consolidated financial statements for the year ended 31 December 2012.

Since its adoption, a total of 4,539,205 shares had been awarded under the Share Award Scheme up to the date of this report, representing about 0.43 per cent of the HKEx shares in issue as at the Adoption Date.

Details of the awards (save for those which had been fully vested or lapsed as of 31 December 2011), including the number of shares which were awarded and vested according to the terms of the Share Award Scheme during the year ended 31 December 2012 are set out below.

						Number of
						Awarded
						Shares
Date of approval	Date of 1	Awarded	Number of shares	Number of Awarded	Average2 fair value	vested during
by Board	award	sum $’000	purchased	Shares	per share $	the year	Vesting period3
15 May 2007	17 Jul 2007	600	5,500	5,500	102.29	1,375	18 Jun 2009 –
							18 Jun 2012
12 Dec 2007	4 Feb 2008	26,300	151,000	150,965	163.72	25,688	12 Dec 2009 –
							12 Dec 2012
10 Dec 2008	3 Feb 2009	4,900	59,900	59,900	81.96	14,975	1 Jan 2011 –
							1 Jan 2014
23 Apr 2010	10 Jun 2010	88,516	720,100	720,054	123.29	308,250	13 May 2012 –
							13 May 2013
23 Apr 2010	9 Jul 2010	840	6,900	6,900	121.88	3,450	10 Jun 2012 –
							10 Jun 2013
23 Apr 2010	9 Jul 2010	2,520	21,000	21,000	120.32	–	2 Jul 2012 –
							2 Jul 2013
14 Dec 2010	31 Dec 2010	91,303	518,100	518,039	176.75	238,900	14 Dec 2012 –
							14 Dec 2013
14 Dec 2010	30 Mar 2011	570	3,300	3,300	169.92	–	13 Jan 2013 –
							13 Jan 2014
14 Dec 2010	30 Mar 2011	2,310	13,600	13,600	169.92	–	1 Feb 2013 –
							1 Feb 2014
14 Dec 2010	8 Apr 2011	263	1,400	1,400	179.55	–	1 Apr 2013 –
							1 Apr 2014
14 Dec 2010	9 Jun 2011	570	3,300	3,300	171.59	–	26 Apr 2013 –
							26 Apr 2014
14 Dec 2010	8 Jul 2011	1,560	9,200	9,200	168.87	–	8 Jul 2013 –
							8 Jul 2014
14 Dec 2010	7 Sept 2011	405	2,900	2,900	137.12	–	20 Jul 2013 –
							20 Jul 2014
14 Dec 2010	11 Oct 2011	1,620	11,800	11,800	137.22	–	19 Sept 2013 –
							19 Sept 2014
14 Dec 2010	11 Oct 2011	1,560	14,400	14,400	108.03	–	3 Oct 2013 –
							3 Oct 2014

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2012 REMUNERATION COMMITTEE REPORT

						Number of
						Awarded
						Shares
Date of approval	Date of 1	Awarded	Number of shares	Number of Awarded	Average2 fair value	vested during
by Board	award	sum $’000	purchased	Shares	per share $	the year	Vesting period3
14 Dec 2011	30 Dec 2011	113,624	567,800	912,4374	124.75	11,5245	14 Dec 2013 –
							14 Dec 2014
14 Dec 2010	28 Mar 2012	500	3,400	3,400	143.74	–	3 Jan 2014 –
							3 Jan 2015
14 Dec 2011	22 Jun 2012	256	2,300	2,300	108.45	–	26 Mar 2014 –
							26 Mar 2015
14 Dec 2011	22 Jun 2012	345	3,100	3,100	108.42	–	2 Apr 2014 –
							2 Apr 2015
14 Dec 2011	22 Jun 2012	412	3,800	3,800	108.45	–	2 May 2014 –
							2 May 2015
14 Dec 2011	22 Jun 2012	990	9,100	9,100	108.39	–	2 May 2014 –
							2 May 2015
14 Dec 2011	5 Sept 2012	975	8,900	8,900	109.00	–	7 Jul 2014 –
							7 Jul 2015
3 Dec 2012	31 Dec 2012	102,398	707,200	810,2454	126.71	–	3 Dec 2014 –
							3 Dec 2015

Notes:

• 1 The date of award refers to the date on which the trustee allocated the Awarded Shares to the selected employees from the shares purchased with the awarded sum determined by the Board.

• 2 The fair value of the Awarded Shares was based on the average purchase cost per share.

• For the shares awarded on 30 December 2011 and 31 December 2012, the fair value of the Awarded Shares was based on the average fair value calculated from the weighted average of the following:

• (a) for shares awarded from unallocated or forfeited shares: closing price of the HKEx shares on the date of approval of the awarded sum by the Board; and

• (b) for shares purchased from the market: average cost per share.

• 3 Effective 13 May 2010, the vesting period of the Awarded Shares was changed from 5 years to 3 years. Accordingly, the Awarded Shares and the related income are vested in 2 equal tranches in the 2[nd] and 3[rd] year after the grant, as opposed to 4 equal tranches from the 2[nd] to 5[th] year, the arrangement prior to the change.

• 4 The Share Award Scheme’s trustee applied 344,706 shares and 103,116 shares held under the scheme, which were unallocated or forfeited pursuant to the Share Award Scheme, to partly satisfy the awards allocated on 30 December 2011 and 31 December 2012 respectively.

• 5 According to the terms of the Share Award Scheme, these Awarded Shares became vested on a selected employee who retired prior to the vesting period.

As at 31 December 2012, taking into account the shares acquired out of the dividends from the shares held under the trust, there were 2,399,854 shares held in trust under the Share Award Scheme.

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2012 REMUNERATION COMMITTEE REPORT

Chief Executive’s and Senior Management’s Interests in HKEx Securities under Long-term Incentive Schemes

Share Options

Share Options
Name Date of grant Exercise price $	Number of shares issuable under the options As at 1 Jan 2012 Subscribed during the year Lapsed during the year As at 31 Dec 2012 Exercise period 1
Senior Management Gerald Greiner 17 May 2004 15.91 26 Jan 2005 19.25	25,000 – – 25,000 17 May 2006 – 16 May 2014 100,000 – – 100,000 26 Jan 2007 – 25 Jan 2015

Note:

1 Options granted were subject to a vesting scale in tranches of 25 per cent each per annum starting on the 2[nd] anniversary and became fully vested on the 5[th] anniversary of the grant.

Awarded Shares

Awarded Shares
Name Date of award2 Number of Awarded Shares Average3 fair value per share $	Number of shares1 As at 1 Jan 2012 Shares acquired during the year out of the dividends Vested during the year Lapsed during the year As at 31 Dec 2012 Vesting period4
HKEx’s Chief Executive Charles Li 10 Jun 2010 73,217 123.29 31 Dec 2010 40,856 176.75 30 Dec 2011 70,495 124.75 31 Dec 2012 70,556 126.71 Senior Management Mark Dickens 3 Feb 2009 59,900 81.96 10 Jun 2010 14,236 123.29 31 Dec 2010 19,860 176.75 30 Dec 2011 29,312 124.75 Lawrence Fok5 4 Feb 2008 658 163.72 10 Jun 2010 7,468 123.29 Gerald Greiner 4 Feb 2008 8,418 163.72 10 Jun 2010 35,700 123.29 31 Dec 2010 16,601 176.75 30 Dec 2011 48,185 124.75 31 Dec 2012 11,870 126.71 Henry Ingrouille 5 Sept 2012 8,900 109.00 31 Dec 2012 14,639 126.71 Kevin King 10 Jun 2010 6,101 123.29	76,355 1,952 38,816 – 39,491 13 May 2012 – 13 May 2013 42,008 1,442 21,723 – 21,727 14 Dec 2012 – 14 Dec 2013 70,495 2,426 – – 72,921 14 Dec 2013 – 14 Dec 2014 – – – – 70,556 3 Dec 2014 – 3 Dec 2015 49,047 1,122 16,347 – 33,822 1 Jan 2011 – 1 Jan 2014 14,848 378 7,546 – 7,680 13 May 2012 – 13 May 2013 20,424 700 10,558 – 10,566 14 Dec 2012 – 14 Dec 2013 29,312 1,013 – – 30,325 14 Dec 2013 – 14 Dec 2014 213 6 219 – – 12 Dec 2009 – 12 Dec 2012 7,794 200 7,994 – – 13 May 2012 – 13 May 2013 2,433 82 2,515 – – 12 Dec 2009 – 12 Dec 2012 37,230 951 18,925 – 19,256 13 May 2012 – 13 May 2013 17,073 585 8,824 – 8,834 14 Dec 2012 – 14 Dec 2013 48,185 1,660 – – 49,845 14 Dec 2013 – 14 Dec 2014 – – – – 11,870 3 Dec 2014 – 3 Dec 2015 – – – – 8,900 7 Jul 2014 – 7 Jul 2015 – – – – 14,639 3 Dec 2014 – 3 Dec 2015 6,361 161 3,230 – 3,292 13 May 2012 – 13 May 2013

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2012 REMUNERATION COMMITTEE REPORT

Name Date of award2 Number of Awarded Shares Average3 fair value per share $

Number of shares1 As at 1 Jan 2012 Shares acquired during the year out of the dividends Vested during the year Lapsed during the year As at 31 Dec 2012 Vesting period4

Romnesh Lamba 10 Jun 2010 25,626 123.29 31 Dec 2010 23,832 176.75 30 Dec 2011 29,312 124.75 31 Dec 2012 29,461 126.71 Henry Law 4 Feb 2008 3,623 163.72 10 Jun 2010 15,832 123.29 31 Dec 2010 7,362 176.75 30 Dec 2011 10,841 124.75 31 Dec 2012 10,896 126.71 Christine Wong 9 Jul 2010 6,900 121.88 31 Dec 2010 14,299 176.75 30 Dec 2011 15,740 124.75 31 Dec 2012 15,820 126.71 Samuel Wong6 9 Jul 2010 21,000 120.32

26,723 682 13,585 – 13,820 13 May 2012 – 13 May 2013 24,504 840 12,670 – 12,674 14 Dec 2012 – 14 Dec 2013 29,312 1,011 – – 30,323 14 Dec 2013 – 14 Dec 2014 – – – – 29,461 3 Dec 2014 – 3 Dec 2015 1,060 35 1,095 – – 12 Dec 2009 – 12 Dec 2012 16,512 420 8,392 – 8,540 13 May 2012 – 13 May 2013 7,574 258 3,912 – 3,920 14 Dec 2012 – 14 Dec 2013 10,841 378 – – 11,219 14 Dec 2013 – 14 Dec 2014 – – – – 10,896 3 Dec 2014 – 3 Dec 2015 7,192 183 3,656 – 3,719 10 Jun 2012 – 10 Jun 2013 14,703 504 7,600 – 7,607 14 Dec 2012 – 14 Dec 2013 15,740 542 – – 16,282 14 Dec 2013 – 14 Dec 2014 – – – – 15,820 3 Dec 2014 – 3 Dec 2015 21,899 – – 21,899 – 2 Jul 2012 – 2 Jul 2013

Notes:

• 1 It included shares acquired out of the dividends from the Awarded Shares according to the Share Award Scheme.

• 2 The date of award refers to the date on which the trustee allocated the Awarded Shares to the selected employees from the shares purchased with the awarded sum determined by the Board.

• 3 The fair value of the Awarded Shares was based on the average purchase cost per share. For the shares awarded on 30 December 2011 and 31 December 2012, the fair value of the Awarded Shares was based on the average fair value calculated from the weighted average of the following:

• (a) for shares awarded from unallocated or forfeited shares: closing price of the HKEx shares on the date of approval of the awarded sum by the Board; and

• (b) for shares purchased from the market: average cost per share.

• 4 Effective 13 May 2010, the vesting period of the Awarded Shares was changed from 5 years to 3 years. Accordingly, the Awarded Shares and the related income are vested in 2 equal tranches in the 2[nd] and 3[rd] year after the grant, as opposed to 4 equal tranches from the 2[nd] to 5[th] year, the arrangement prior to the change.

• 5 Mr Fok retired on 1 September 2012. According to the terms of the Share Award Scheme, all the Awarded Shares and the related income became vested on Mr Fok on 31 August 2012.

• 6 Mr Wong resigned effective 20 March 2012.

Members of the Remuneration Committee

CHOW Chung Kong (Chairman) Ronald Joseph ARCULLI Timothy George FRESHWATER John Barrie HARRISON

John Mackay McCulloch WILLIAMSON

Hong Kong, 21 February 2013

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2012 REMUNERATION COMMITTEE REPORT

Glossary

2012 AGM Annual general meeting held on 23 April 2012 at 4:30 pm at the Exchange Auditorium in the Exchange Exhibition Hall of SEHK Awarded Shares Shares awarded under the Share Award Scheme Board HKEx’s board of directors CSR Corporate Social Responsibility Director(s) HKEx’s director(s) Group HKEx and its subsidiaries HKEx Hong Kong Exchanges and Clearing Limited HSI Hang Seng Index INED(s) Independent Non-executive Director(s) of HKEx LME The London Metal Exchange (formerly known as The London Metal Exchange Limited) Main Board Listing Rules Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited Post-Listing Scheme Post-Listing Share Option Scheme approved by Shareholders on 31 May 2000 which was subsequently amended by Shareholders on 17 April 2002 Pre-Listing Scheme Pre-Listing Share Option Scheme approved by Shareholders on 31 May 2000 Senior Management HKEx’s senior executives as set out in this report Shareholders HKEx’s shareholders Share Award Scheme The Employees’ Share Award Scheme adopted by the Board on 14 September 2005 which was subsequently amended on 16 August 2006 and 13 May 2010 Share Option Schemes Pre-Listing Scheme and Post-Listing Scheme UK United Kingdom

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