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

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Presentation on theme: "Corporate Action Processing Innovations. 2 Standardize Corporate Actions Liability Notices Improving Complex Security Income Agency Lending Disclosure."— Presentation transcript:

1 Corporate Action Processing Innovations

2 2 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

3 3 Corporate Action Processing Innovations Standardize Corporate Actions Liability Notices

4 4 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

5 5 Corporate Actions Liability Notification Service 6. 5. 4. 3. 2. 1. Announcement Collection Collect corporate action announcementinformation Consolidate data and prepare forcomparison Announcement Collection Collect corporate action announcementinformation Consolidate data and prepare forcomparison Announcement Validation Normalize, reconcile and enrich data Validate for accuracy and completeness Produce scrubbed announcement record Announcement Validation Normalize, reconcile and enrich data Validate for accuracy and completeness Produce scrubbed announcement record Identification and Notification Determine investors impacted by eventand calculate entitlements Notify investors of announcementinformation Identification and Notification Determine investors impacted by eventand calculate entitlements Notify investors of announcementinformation Election Processing (for Voluntaries) Reconcile elections Communicate elections from investors thruvarious financial intermediaries Submit instructions before deadline Election Processing (for Voluntaries) Reconcile elections Communicate elections from investors thruvarious financial intermediaries Submit instructions before deadline Event Settlement Deliver securities, if necessary Receive securities and/or money payment Event Settlement Deliver securities, if necessary Receive securities and/or money payment Reconciliation 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

6 6 SMART/Track: Corporate Actions Liability SMART/Track Broker A Bank A Bank B Broker B Broker C Bank C Tracking Database RIPS

7 7 SMART/Track: Corporate Actions Liability 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

8 8 SMART/Track: Corporate Actions Liability Features: Web-based Automated tracking including numbers of notices sent/received and status of each Link to DTCs 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 DTCs 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

9 9 SMART/Track: Corporate Actions Liability 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

10 10 SMART/Track: Corporate Actions Liability 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

11 11 SMART/Track: Corporate Action Liability Whats 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 Whats 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

12 12 Corporate Action Processing Innovations Improving Complex Security Income

13 13 Improving Complex Security Income 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

14 14 Improving Complex Security Income 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

15 15 Improving Complex Security Income 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

16 16 Improving Complex Security Income 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

17 17 Corporate Action Processing Innovations SMART/Track for Agency Lending Disclosure

18 18 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?

19 19 SMART/Track: Agency Lending Disclosure 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 DTCCs Role?

20 20 SMART/Track: Agency Lending Disclosure 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

21 21 SMART/Track: Agency Lending Disclosure 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

22 22 SMART/Track: Agency Lending Disclosure SMART/Track For Agency Lending Disclosure Loanet Equilend Borrower Agent Lender BorrowerAgent Lender

23 23 SMART/Track: Agency Lending Disclosure 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

24 24 SMART/Track: Agency Lending Disclosure 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

25 25 SMART/Track: Agency Lending Disclosure For more information about the Agency Lending Disclosure initiative, visit the Task Forces website at : www.agencylending.capco.com For more information about the Agency Lending Disclosure initiative, visit the Task Forces website at : www.agencylending.capco.com

26 26 Corporate Action Processing Innovations Global Corporate Action Validation Service

27 27 Global Corporate Action Validation Service 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

28 28 Global Corporate Action Validation Service 6. 5. 4. 3. 2. 1. Announcement Collection Collect corporate action announcementinformation Consolidate data and prepare forcomparison Announcement Collection Collect corporate action announcementinformation Consolidate data and prepare forcomparison Announcement Validation Normalize, reconcile and enrich data Validate for accuracy and completeness Produce scrubbed announcement record Announcement Validation Normalize, reconcile and enrich data Validate for accuracy and completeness Produce scrubbed announcement record Identification and Notification Determine investors impacted by eventand calculate entitlements Notify investors of announcementinformation Identification and Notification Determine investors impacted by eventand calculate entitlements Notify investors of announcementinformation Election Processing (for Voluntaries) Reconcile elections Communicate elections from investors thruvarious financial intermediaries Submit instructions before deadline Election Processing (for Voluntaries) Reconcile elections Communicate elections from investors thruvarious financial intermediaries Submit instructions before deadline Event Settlement Deliver securities, if necessary Receive securities and/or money payment Event Settlement Deliver securities, if necessary Receive securities and/or money payment Reconciliation 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

29 29 Global Corporate Action Validation Service The GCA Validation Service delivers standardized, comprehensive and timely information to financial institutions of all types and sizes. Broker/DealersBanks Investment ManagersHedge 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/DealersBanks Investment ManagersHedge Funds Any firm that tracks corporate action information and its impact on securities positions

30 30 Global Corporate Action Validation Service 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

31 31 Global Corporate Action Validation Service 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 customers 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 customers corporate action announcement information from other sources (e.g. Custodians, Prime Brokers)

32 32 Global Corporate Action Validation Service 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

33 33 Global Corporate Action Validation Service 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 Hours of Operation Monday through Friday 8am - 6pm (local time) Help Desk Support Phone Logistics Domestic: 866-DTCC-GCA International: +1 212-855-2366 E-mail Support Logistics gcabusiness.support@dtcc.com gcatechnical.support@dtcc.com 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 Hours of Operation Monday through Friday 8am - 6pm (local time) Shanghai Service Center Service Delivery Help Desk Support Hours of Operation Monday through Friday 8am - 6pm (local time) 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

34 34 Global Corporate Action Validation Service

35 35 Global Corporate Action Validation Service

36 36 Global Corporate Action Validation Service Find out how we can help you drive efficiency for corporate actions Contact us at: 1-866-382-2422 or gcainfo@dtcc.com Find out how we can help you drive efficiency for corporate actions Contact us at: 1-866-382-2422 or gcainfo@dtcc.com


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