International Capital Market Association TRAX2 – Matches, Reports & Complies Brian Eyles – Head of Business Liaison.

International Capital Market AssociationTRAX2 – Matches, Reports & Complies Brian Eyles – Head of Business Liaison

Agenda

1. Overview & Benefits2. TRAX2 Matching3. TRAX2 Reports & Complies 4. Future Developments5. ICMA Securities Database6. Questions & Answers

Agenda


TRAX2 Overview & Benefits

• Operated by ICMA since 1989, TRAX is a real-time post-trade/pre-settlement operational risk managment tool for transactions traded in the OTC market space.

TRAX2Phase II


• TRAX2 went live on 26 June 2006. • All existing TRAX1 users were seamously switched

over to the new TRAX2 central system and database with minimal distruption.

• All TRAX1 users will be required to implement TRAX2 by end of Q3 2007

• TRAX2 Repo went live in August 2006 with five major investment banks (JP Morgan, Goldman Sachs, Nomura, Credit Suisse Securities & HSBC). A number of additional firms including buy-side firms will becoming on-stream shortly.

• TRAX1 and TRAX2 is now processing ~5 Million trades per month.


• TRAX2 supports the 15022 and 20022 (XML) messaging standards to enable rapid and easy integration with front, back or middle-office systems.

• It also utilises ISO standards where available including, ISO 6166 (ISIN), ISO 10383 (MIC Place of Trade) ISO 9362 (BICs), etc.

• Internet connectivity using SSL encryption• Highly competitive reporting/matching

transaction costs • Central TRAX2 transaction data is on-line for 1

year


• TRAX2 is supported by its own dedicated web site – www.trax2.org

Agenda

1. Overview & Benefits2. TRAX2 Matching3. TRAX2 Reports & Complies 4. Future Developments5. ICMA Securities Database 6. Questions & Answers

TRAX2 Matching

• Enables any asset class including cash (FI & equities), repo, and on or off-exchange derivative instruments (Options, Futures, CFDs, etc. ) to be bi-laterally agreed and matched through the system.

• New settlement matching model with real time exchange of standard settlement instructions (SSI) enabling firms to agree settlement details prior to the start of the settlement cycle.

• Real time graphic display of unresolved transactions with dynamic real time query monitor.

• Flexible matching model to meet specific firms’ business requirements.

TRAX2 Matching

• TRAX2 Repo is the first confirmation system to be specifically developed for firms trading in the OTC repo space. The system enables: Fixed or variable rate terms, BSBs or open terms

entered as a single transaction incorporating both the start and end legs; both legs are matched and allocated an individual status.

Provision to add end date and closing amount post trade actions (PTAs) for open, FRN and variable rate terms; and rate, spread or price change PTAs (rate rolls) for open repos throughout its maturity.

Provision of roll-back or roll-forward facility for amending end leg details.

Support for overnight repos or any other duration including maturities >12 months.

Available for both buy and sell side firms

Agenda


TRAX2 Reports & Complies

• ICMA is applying to be an Approved Reporting Mechanism (ARM) to the FSA in the UK - TRAX is presently recognised as a Permitted Reporting System (PRS)

• TRAX2 is currently compliant with Article 12 (Articles 25(3) and (5) of Directive 2004/39/EC) of the Level II Implementing Directive of MiFID (the 23 fields).

• ICMA will ensure TRAX2 will continue to be compliant with any ‘super-equivalence’ that may be imposed by Competent Authorities (CAs) such as the FSA (CDSs, Proprietary Trading…)


• Options for receipt of transaction data from firms include: TRAX2 PC Gateway using ISO based messaging; or TRAX2 FTP Batch (excluding ICMA reportable

securities)• Options for delivery mechanism of transaction data to

CAs include:• End of day batch; or• Real time via a TRAX2 CA Gateway

• This will enable any asset class as denoted in the directive to be reported to any respective CA throughout the EEA – The Central European Hub.


TRAX2 TRAX2

ParticipantsParticipants

Future Developments

• Phase two enhancements will include: Partial Repo Repayment Post Trade Action

(PTAs) Queries/Reports for Repo netting

opportunities and report of due coupon payments.

STP links to CSDs, ICSDs and Custodians with external settlement instruction matching status available within the TRAX2 client application and/or TRAX2 host messaging.

Agenda


ICMA Securities Database

• To support the TRAX2 system and ICMA’s end of day pricing and data products, ICMA’s securities database contains over 360,000 securities comprising: Bills; Convertibles; Equities; FRNs; GDRs; Straights and Warrants.

• Source information from: Lead Managers, Clearing Houses & Data vendors

• Pricing information in over 11,000 bonds is provided by TRAX and quotations received by ICMA’s Council of Reporting Dealers (CRD).

• Sub-set is currently available via TRAX2 screens and downloadable for ICMA reportable instruments.

• Full database is available through www.icma-info.org or data feeds.



Questions & Answers

International Capital Market Association TRAX2 – Matches, Reports & Complies Brian Eyles – Head of Business Liaison.

Documents

new trax2 central system

settlement details

open terms

variable rate terms

settlement cycle

iso standards

end legs

confirmation system