Corporate Action Processing Innovations. 2 Standardize Corporate Actions Liability Notices Improving Complex Security Income Agency Lending Disclosure.

Corporate Action Processing Innovations

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•Standardize Corporate Actions Liability Notices

•Improving Complex Security Income

•Agency Lending Disclosure

•Global Corporate Actions Validation Service

•Standardize Corporate Actions Liability Notices

•Improving Complex Security Income

•Agency Lending Disclosure

•Global Corporate Actions Validation Service

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Standardize Corporate Actions Liability Notices

Standardize Corporate Actions Liability Notices

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SMART/Track: Corporate Actions Liability

What is it?

SMART/Track for Corporate Actions Liability Notification Service is a web-based application for the communication and tracking of voluntary corporate action liability notices

Allows participants to create, send, process and track liability notices and links the various parties involved with corporate action processing

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Corporate Actions Liability Notification Service

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Announcement Collection• Collect corporate action announcement

information• Consolidate data and prepare for

comparison



comparison

Announcement Validation• Normalize, reconcile and enrich data• Validate for accuracy and completeness• Produce scrubbed announcement record


Identification and Notification• Determine investors impacted by event

and calculate entitlements• Notify investors of announcement

information



information

Election Processing (for Voluntaries)• Reconcile elections• Communicate elections from investors

thru various financial intermediaries• Submit instructions before deadline



Event Settlement• Deliver securities, if necessary• Receive securities and/or money

payment


paymentReconciliation• Allocate entitlements to investors• Notify investors of final transactions• Close-out event

Reconciliation• Allocate entitlements to investors• Notify investors of final transactions• Close-out event

DTCC Corporate Action Initiatives

Corporate Actions Liability

Notification Service

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SMART/Track

Broker A

Bank ABank B Broker B

Broker C

Bank C

TrackingDatabase

RIPS

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Functions:

•Create and transmit liability for a voluntary corporate action to a single or multiple counterparties

•Accept/reject a liability notice

•Reduce liability quantity

•Cancel a notice

• Track status of notices sent/received

Functions:

•Create and transmit liability for a voluntary corporate action to a single or multiple counterparties

•Accept/reject a liability notice

•Reduce liability quantity

•Cancel a notice

• Track status of notices sent/received

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SMART/Track: Corporate Actions LiabilityFeatures:

•Web-based

•Automated tracking including numbers of notices sent/received and status of each

• Link to DTC’s RIPs system for corporate offer information

•Automated Alerts for date changes in RIPs that affect a liability notice

•E-mail notices at start of day and intra-day for notices requiring action that day

•Automatic archiving and retrieval of archived notices with 7-year data retention

Features:

•Web-based

•Automated tracking including numbers of notices sent/received and status of each

• Link to DTC’s RIPs system for corporate offer information

•Automated Alerts for date changes in RIPs that affect a liability notice

•E-mail notices at start of day and intra-day for notices requiring action that day

•Automatic archiving and retrieval of archived notices with 7-year data retention

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Benefits

Eliminates the manual paper-based fax and phone notification process

Standardizes market practice for communicating liability notifications

Provides a single point of entry for all participants

Manages message delivery risk through tracking

Benefits

Eliminates the manual paper-based fax and phone notification process

Standardizes market practice for communicating liability notifications

Provides a single point of entry for all participants

Manages message delivery risk through tracking

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Pilot Program

•Pilot launched in November 2004 with 19 participants

•64 pilot participants representing 123 users

•822 notices transmitted

Pilot Program

•Pilot launched in November 2004 with 19 participants

•64 pilot participants representing 123 users

•822 notices transmitted

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SMART/Track: Corporate Action Liability

What’s next?

•Expect that use of the automated Service will be the standard way of sending liability notices

•Working with the NYSE on changing NYSE Rule 180 to mandate use of SMART/Track for sending voluntary corporate actions liability notices

What’s next?

•Expect that use of the automated Service will be the standard way of sending liability notices

•Working with the NYSE on changing NYSE Rule 180 to mandate use of SMART/Track for sending voluntary corporate actions liability notices

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Improving Complex Security Income


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•Elimination of contra-CUSIPs for Variable Rate Demand Obligation (VRDO) partial calls

•Implement a unified end-to-end platform for the asset servicing life cycle

•Establish best practices and performance metrics for the handling of complex securities

•Elimination of contra-CUSIPs for Variable Rate Demand Obligation (VRDO) partial calls

•Implement a unified end-to-end platform for the asset servicing life cycle

•Establish best practices and performance metrics for the handling of complex securities

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Elimination of Contra-CUSIPs VRDO partial calls

•Effective with the November 1, 2005 redemption date

•Called positions will be segregated into the Called Account under the regularly assigned CUSIP number

• Lotteries for late call notices or revisions to previously paid out items received after November 1, 2005, will also be processed without contra-CUSIPs

Elimination of Contra-CUSIPs VRDO partial calls

•Effective with the November 1, 2005 redemption date

•Called positions will be segregated into the Called Account under the regularly assigned CUSIP number

• Lotteries for late call notices or revisions to previously paid out items received after November 1, 2005, will also be processed without contra-CUSIPs

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Implement a unified end-to-end platform from issuance through the entire asset servicing life cycle

•Underwriting

•Corporate Actions

•Masterfiles

Implement a unified end-to-end platform from issuance through the entire asset servicing life cycle

•Underwriting

•Corporate Actions

•Masterfiles

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Establish best practices and performance metrics for the handling of complex securities

• Post-payable adjustments for complex securities decreased by 6% from Q1 to Q2

•Work continues with the major paying agents to identify root causes of errors and implementing process improvements where feasible

•DTCC is also planning on broadening its working relationship with other industry associations and participants to collaboratively progress the streamlining of Asset Backed Securities processing

Establish best practices and performance metrics for the handling of complex securities

• Post-payable adjustments for complex securities decreased by 6% from Q1 to Q2

•Work continues with the major paying agents to identify root causes of errors and implementing process improvements where feasible

•DTCC is also planning on broadening its working relationship with other industry associations and participants to collaboratively progress the streamlining of Asset Backed Securities processing

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SMART/Track for Agency Lending Disclosure

SMART/Track for Agency Lending Disclosure

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SMART/Track: Agency Lending Disclosure

•Industry initiative to provide greater transparency in securities lending transactions

•Agent lenders will be required to disclose principal lender information on open loans to borrowers on a daily basis for credit monitoring and capital requirement purposes in 2006

•Industry initiative to provide greater transparency in securities lending transactions

•Agent lenders will be required to disclose principal lender information on open loans to borrowers on a daily basis for credit monitoring and capital requirement purposes in 2006

What is Agency Lending Disclosure?

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Approached by the Task Force for Agency Lending Disclosure in 2003 to develop a communications facility for the transmission of periodic and daily loan files between agent lenders and borrowers

Approached by the Task Force for Agency Lending Disclosure in 2003 to develop a communications facility for the transmission of periodic and daily loan files between agent lenders and borrowers

What is DTCC’s Role?

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SMART/Track has two functions:

•Communications facility for transmitting data files

•Web application for viewing file transmission status and searching/requesting unique identifiers

SMART/Track has two functions:

•Communications facility for transmitting data files

•Web application for viewing file transmission status and searching/requesting unique identifiers

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Transmission of loan files

•Agent lender and borrowers can send loan files directly to SMART/Track or through a vendor (SunGard or EquiLend) using:

oFTP

oNDM – CONNECT:Direct, or

oFTP over the internet

Transmission of loan files

•Agent lender and borrowers can send loan files directly to SMART/Track or through a vendor (SunGard or EquiLend) using:

oFTP

oNDM – CONNECT:Direct, or

oFTP over the internet

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SMART/TrackFor Agency

Lending Disclosure

Loanet Equilend

Borrower

Borrower

Agent Lender

Borrower Agent Lender

Agent Lender

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Web Application allows users to:

•Search for or create unique identifiers for those principal lenders that do not have U.S. tax identification numbers (required in the data files)

•View the transmission status of files sent directly through SMART/Track to a counterparty

Web Application allows users to:

•Search for or create unique identifiers for those principal lenders that do not have U.S. tax identification numbers (required in the data files)

•View the transmission status of files sent directly through SMART/Track to a counterparty

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To sign up:

•Contact your DTCC Account Executive, or

•Call DTCC Relationship Services at

800-422-0582

To sign up:

•Contact your DTCC Account Executive, or

•Call DTCC Relationship Services at

800-422-0582

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For more information about the Agency Lending Disclosure initiative, visit the Task Force’s website at:

www.agencylending.capco.com

For more information about the Agency Lending Disclosure initiative, visit the Task Force’s website at:

www.agencylending.capco.com

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Global Corporate Action Validation Service


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The Global Corporate Action (GCA) Validation Service provides a centralized source of scrubbed information about corporate actions for nearly 100 event types for instruments traded in Europe, Asia-Pacific and the Americas

The Global Corporate Action (GCA) Validation Service provides a centralized source of scrubbed information about corporate actions for nearly 100 event types for instruments traded in Europe, Asia-Pacific and the Americas

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comparison



comparison





information



information






payment


paymentReconciliation• Allocate entitlements to investors• Notify investors of final transactions• Close-out event

Reconciliation• Allocate entitlements to investors• Notify investors of final transactions• Close-out event

DTCC Corporate Action Initiatives

GCA VS

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The GCA Validation Service delivers standardized, comprehensive and timely information to financial institutions of all types and sizes.

Broker/Dealers Banks

Investment Managers Hedge Funds

Any firm that tracks corporate action information and its impact on securities positions

The GCA Validation Service delivers standardized, comprehensive and timely information to financial institutions of all types and sizes.

Broker/Dealers Banks

Investment Managers Hedge Funds

Any firm that tracks corporate action information and its impact on securities positions

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How does it Work?

•The service validates data through an intricate process of mapping, normalizing and consolidating announcement information

•Skilled professionals enrich the data through follow-up research relying on a wide array of sources

•Customers submit a “securities of interest” file and have the GCA VS monitor and report on these specific securities throughout the day

How does it Work?

•The service validates data through an intricate process of mapping, normalizing and consolidating announcement information

•Skilled professionals enrich the data through follow-up research relying on a wide array of sources

•Customers submit a “securities of interest” file and have the GCA VS monitor and report on these specific securities throughout the day

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How does it Work? (continued)

•Customers receive a common composite record for each announcement

•A file of these records is available six times a day and includes event data for each composite record created or updated since the last publication

•Real-time, around-the-clock access to information through a secure, Web-based inquiry tool provides the most current version of the composite record

•A custodian verification feature compares and validates customer’s corporate action announcement information from other sources (e.g. Custodians, Prime Brokers)

How does it Work? (continued)

•Customers receive a common composite record for each announcement

•A file of these records is available six times a day and includes event data for each composite record created or updated since the last publication

•Real-time, around-the-clock access to information through a secure, Web-based inquiry tool provides the most current version of the composite record

•A custodian verification feature compares and validates customer’s corporate action announcement information from other sources (e.g. Custodians, Prime Brokers)

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Benefits

•Reduce operational losses

•Optimizes front-office trading

• Simplifies operations globally

• Streamlines data sources

•Provides a smooth access to information

Benefits

•Reduce operational losses

•Optimizes front-office trading

• Simplifies operations globally

• Streamlines data sources

•Provides a smooth access to information

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London Service Center• Service Delivery• Help Desk Support

Hours of Operation• Monday through Friday • 8am - 6pm (local time)

London Service Center• Service Delivery• Help Desk Support


Help Desk Support Phone Logistics• Domestic: 866-DTCC-GCA• International: +1 212-855-2366

E-mail Support Logistics• [email protected]• [email protected]

Online Inquiry URL Logistics• https://gca.dtcc.com

New York Service Center• Service Delivery• Help Desk Support• IT Infrastructure• Vendor Management• Client and Service

Management• Governance

Hours of Operation• Monday through Friday• 8am - 6pm (local time)

New York Service Center• Service Delivery• Help Desk Support• IT Infrastructure• Vendor Management• Client and Service

Management• Governance

Hours of Operation• Monday through Friday• 8am - 6pm (local time)

GCA Web Page• www.dtcc.com/GCA

Shanghai Service Center • Service Delivery• Help Desk Support


Shanghai Service Center • Service Delivery• Help Desk Support


Language Coverage• English• Spanish• Portuguese• German• Italian• French• Chinese• Japanese• Arabic• Turkish• Bengali

Language Coverage• English• Spanish• Portuguese• German• Italian• French• Chinese• Japanese• Arabic• Turkish• Bengali

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Find out how we can help you drive efficiency for corporate actions Contact us at:

1-866-382-2422or

[email protected]

Find out how we can help you drive efficiency for corporate actions Contact us at:

1-866-382-2422or

[email protected]

Corporate Action Processing Innovations. 2 Standardize Corporate Actions Liability Notices Improving Complex Security Income Agency Lending Disclosure.

Documents

track liability notices

liability notifications

liability quantity

numbers of notices

tracking slide

notice track status

retrieval of archived

pilot participants