What Reengineering Project?

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(No Transcript)
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What Reengineering Project?
Corporate Actions
Underwriting
Security Master Files
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A Bit of History

• Transforming Corporate Action Processing outlined
  DTCCs strategy to help firms manage risk, reduce
  cost and achieve greater levels of STP
• Municipal Operational Underwriting Process and
  Corporate Operational Underwriting Process
  documented the operational underwriting process
  in plain English Guides

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Reengineering Objectives

• Common Platform for Underwriting and integrated
  Corporate Action Processing
• Improve Customer Service by offering greater
  operational flexibility
• Streamline Processes and eliminate redundancies
• Reduce Risk through increased automation

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Reengineering Objectives

• Support International Standards and Best
  Practices
• ISO 15022 compatible
• Multi-currency enabled
• Support international numbering systems

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Current Underwriting Platform

• Does not capture all fields required to service
  security over its life
• Relies upon single security identifier
• Implemented over twenty years ago
• Consists of over six distinct customized
  sub-systems

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Current Corporate Actions Platform

• Consists of over sixty distinct customized
  sub-systems
• Many implemented over twenty years ago
• Sub-systems individually maintained and have been
  significantly altered over time
• Relies upon single security identifier

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Current Corporate Actions Platform

• Batch processing mostly end-of-day
• Proprietary formats
• Unique procedures (e.g. contra-CUSIP, envelopes)
• Hard-coded processing rules

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Underwriting System Processes

• Underwriting Announcements
• Capturing and maintaining Underwriting event
  information
• Eligibility
• Review process to determine if issue can be DTC
  eligible
• Packaging
• Establishing DTC inventory for the new issues

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Underwriting System Processes

• Closing
• Crediting Underwriters with position once issue
  closes
• Post Closing Activities
• Gathering and verification of asset servicing
  features

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Master File Changes

• Consolidate multiple Security Master Files
  within DTCC into one common structure
• Elimination of sub-issue types that drive
  processing and dont describe the security
• Enhanced Support for Asset Services features

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Corporate Action Processes

• Announcements
• Capturing and maintaining of event
  information
• Entitlements
• Identifying eligible participant positions
  and calculating the entitlement
• Response Capture
• Processing of all Corporate Action
  instructions

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Corporate Action Processes

• Reconciliation
• Balancing entitlement positions,
  pre-balancing cash payments and resolving out
  of balances
• Payments
• Receipting and allocating event proceeds post
  allocation bookkeeping
• Tax
• Creating and Maintaining information to
  support tax elections

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Top 10 Highlights
1. Security Master File will works in unison
with Underwriting and Corporate Actions
2. Common rules engine supporting Underwriting,
Corporate Action and Security Master File
3. Capture more comprehensive information on
securities during eligibility process
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Top 10 Highlights

• 4. Announcement Makeover
• Introduction of new naming convention
• Single Announcement processor for all events
• Process complex events within a single envelope
• Link related corporate action events

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Top 10 Highlights

• 5. Improved Entitlement Calculations
• Common payment options across all event types
• Process pro-rata lotteries

• 6. Common Instruction Processor
• Event specific instruction cutoff times
• Customizable instruction approval mechanism

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Top 10 Highlights

• 7. Improved payment reporting
• Taxes and fees will no longer be net from the
  declared rates
• Post Payable adjustments will be reversed and
  reallocated

8. ISO15022 messaging support for entire event
life-cycle
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Top 10 Highlights
9. Web browser access with enhanced reporting
and export functionality
10. A Participant dashboard that pushes
critical information to forefront
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Current Status

• Business Requirements Documents finalized
• Currently in Analysis and Design
• Reviewing and Responding to Customer Feedback
• Launched Reengineering Website

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Next Steps

• Customer Input
• Underwriting Focus Groups completed
• Corporate Action Focus Groups Round 2 to be held
  4th Quarter 2006
• Finalize Analysis and Design Phase
• Ongoing Communication Strategy

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Timeline Key Dates

• Underwriting
• Initiate UAT Q4 2006
• Commence Transition Q2 2007
• Corporate Actions
• Initiate UAT Q3 2007
• Commence Transition Q3 2008

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Questions