XBRL and Corporate Actions Presentation to Financial Executives International (FEI) December 8,

SEC’s US GAAP Rollout Average 7% of elements are extensions Range from 0 to 52% Reasons for extensions: – Aggregate elements not available in the taxonomy – creating a new element that captures several elements added together – Develop new elements that were more specific than what was available – Reflect accounting changes if the 2008 taxonomy was used, which did not include new FASB pronouncements – Use new FASB pronouncements that came out in the last few months, even since the 2009 taxonomy release was published – Depict elements excluded from the taxonomy as not allowed in US GAAP – Provide extensions for the same element in Cash Flow and Income statement – Reflect industry specific extensions not yet covered in the taxonomy – Development of dimensional equivalents (i.e. Trade Receivables)

What is a corporate action? A mandatory corporate action is an event initiated by the corporation by the board of directors that affects all shareholders. Participation of shareholders is mandatory for these corporate actions. An example of a mandatory corporate action is cash dividend. Other examples of mandatory corporate actions include stock splits, mergers, pre-refunding, return of capital, bonus issue and spinoffs. A voluntary corporate action is where the share holders elect to participate in the action. A response is required by the corporation to process the action. Examples include a tender offer, rights issue, making buyback offers to the share holders while delisting the company from the stock exchange.tender offer Mandatory with choice is a mandatory corporate action where share holders are given a chance to choose among several options. An example is cash/stock dividend option with one of the options as default. Share holders may or may not submit their elections.

Corporate Action information flows between many parties in a more complicated chain than GAAP Issuer driven Corporate Action information is passed between many parties in the flow and often results in changes to the corporation structure or entitlements to the investor which need to be correctly communicated and accounted for. Due to the transactional nature of the information ISO messaging has grown to support communication within the Financial Services Industry

Background: Multiple versions, of what should be the same information, travels from the issuer to intermediaries before reaching investors 6 Corporate Actions: Improving Issuer-Investor Communication DTCC Non Confidential Issuer / Agent Sub-Custodian A Sub-Custodian B Data Provider X Data Provider Y IM / AM CSD Global Custodian J Global Custodian K Exchange Prospectus Portal

1 Tender Offer on 250 securities required the manual creation of 250 ISO electronic announcements Eg Event Type, Issuer Name, Security name and ID Eg Dates, Times Cash Option and Rate Terms

Proposed process flow for XBRL tagging a U.S. event based upon ISO plus other market data

9 Perfect Storm With the economic down turn, there is an increased focus to reduce the risks and improve transparency through any means possible, including increased regulation SWIFT is driving the next generation standard, ISO building on the success of ISO 15022, and DTCC’s ‘CA Re-engineering’ project will service the entire US market, using new ISO messages in favor of existing legacy files With the need to do ‘more with less’, there is customer demand for solutions that offer high STP, that align with standards and that use a universal ‘unique ID’ XBRL has been institutionalized with the SEC mandate for the GAAP quarterly financial reporting, and with the replacement of EDGAR with XBRL-based IDEA system. XBRL for CAs, based upon ISO20022, is a solution for issuers to electronically tag data within reports directly at the source. Enforcement may be garnered via regulatory mandate Why Now? Financial Market Turmoil Industry Initiatives Converging on ISO Customer Pressure XBRL Maturity

Proposed Solution Straight through Processing of Corporate Actions from Issuer to Investor Strategy – Build out taxonomy for corporate actions – Establish ISO standard for financial transactions – Establish Stakeholder group and develop the business case Issuer stakeholders: – AGL Resources, Duke Energy, ENGlobal, Pfizer, Inc., United Technologies, Microsoft – issuer agents including Merrill Corporation, Wells Fargo Shareholder Services, NYSE Euronext and PR Newswire Intermediary stakeholders: DTCC, custodians Investor stakeholders: AllianceBernstein, Citi, Goldman Sachs Asset Management, State Street Global Advisors, T. Rowe Price, Vanguard, AMF (Asset Managers Forum), ICI, CII

Business Case – Survey Survey Process –Each stakeholder Group received a tailored survey but containing common questions –The specific results and responders will remain confidential Questions Asked –Demographics Markets covered, Markets of interest –Volumes How many U.S. vs Non U.S events are processed by Mandatory, Voluntary and Choice How many updates received per event –Cost (Current and estimation post XBRL) Estimation of losses (Actual/Near misses) FTE to announce and process evetns –STP Rates (Current and estimation post XBRL)

Stakeholder group members completed a survey Investment Managers serve about 30 clients Investment Managers receive information from about 25 Intermediaries Investment Managers had a average of 7 staff focusing on corporate action announcements while Custodial Banks had an average of 52 The survey included expect increases in STP and $$ Savings Over 50% of assets held in the U.S. with the U.K identified as the next market to address Over 3 updates per event from many intermediaries results in a great detail of redundant work

Business Case – Issuer results 50% of mandatory and choice actions require updates (from 1-20) Creating corporate action messages is labor-intensive – At minimum, a release is managed by IR, reviewed by Finance, with minimum 3-5 FTEs, working 6-12 hours – More complex regulatory filing, handled by Legal, reviewed by Finance, can require as many as 10+ FTEs Messages are delivered to multiple outlets: newswire, corporate web site, EDGAR/SEDAR, data vendors, depending on message type Volume of questions can be significant – Mandatory and choice get questions and require 1-5 FTEs, often with call center support – One company saw 86% spike in average daily call with merger, 122% spike with spinoff – One company receives approximately 5,000 questions on dividends Extensions are seldom granted Estimated time to tag a corporate action ranged from < 1 hour (release) to 1-3 hours for a regulatory filing Issuers expect no reduction in inquiries

The Arguments PLUSESCONCERNS Net savingsChange in liability (mitigate by: initially introduce limited number of tags, most logical tags) Improved clarity of content and intent of corporate action, increased certainty Ease of use (mitigate by: ensure tools are available, structure taxonomy to make process easy as possible) Improved quality in asset servicing to investor Cost (mitigate by: leverage existing tools, existing knowledge base about XBRL among issuers) More control in hands of issuerPrimary benefit to investor and intermediary; less benefit to issuer Reduced cost = more funds in the marketplace for investment Issuer learning curve – corporate actions infrequent, does not become “core competency”

Taxonomy Design Principles All meta-data is in the taxonomy – Issuer Taxonomy – ISO Corporate Actions Notification Message Schema – Mapping Logic Issuers will only see a subset of the Taxonomy – Only present what is relevant to the Issuer Create concise definitions that allows any issuer to tag a document.

XBRL & CA synergy - opportunity Committed to XBRL for CA XBRL financial reporting countries Interest or planning XBRL for CA SMPG members Active in CA Stds

The Way Forward & Next Steps 4Q DTCC data model January business case for first review January 2009 – ISO CA messages available 1Q DTCC event templates 2Q taxonomy for public comment 3Q publication of taxonomy, start pilot 4Q ISO Corporate Actions on SWIFT 4Q DTCC Pilot ISO CA Announcements