Corporate Action Reengineering Corporate Action Reengineering

Lori Trezza Vice

President, Operations

Lori Trezza Vice

President, Operations

ACSDA Leadership Forum

October 9, 2007

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Asset Servicing Reengineering ProjectsAsset Servicing Reengineering Projects

Underwriting Corporate Actions

Security Master Files

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Reengineering ObjectivesReengineering Objectives

• Strategic Goal:

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

• Objectives:

• Provide more accurate and timely servicing information

• Replace legacy sub-systems with newly architected platform

• Strategic Goal:

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

• Objectives:

• Provide more accurate and timely servicing information

• Replace legacy sub-systems with newly architected platform

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Reengineering Objectives (continued)Reengineering Objectives (continued)

• Objectives:

• Automate and streamline redundant processes

• Enhance functionality: ISO15022, multi-currency, international numbering systems

• Reduce ongoing technology support costs

• Eliminate redundant storage of data

• Objectives:

• Automate and streamline redundant processes

• Enhance functionality: ISO15022, multi-currency, international numbering systems

• Reduce ongoing technology support costs

• Eliminate redundant storage of data

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Corporate Action Life-Cycles Corporate Action Life-Cycles

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Corporate Action Processes Corporate Action Processes

•Announcements• Capturing and maintaining of event information

• Includes Announcement Collection and Validation Processes

•Entitlements• Identifying eligible participant positions and calculating the entitlement

• Identification and Notification stage of the Life-cycle

•Announcements• Capturing and maintaining of event information

• Includes Announcement Collection and Validation Processes

•Entitlements• Identifying eligible participant positions and calculating the entitlement

• Identification and Notification stage of the Life-cycle

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Corporate Action ProcessesCorporate Action Processes

•Response Capture• Processing of all Corporate Action instructions

• Election Processing stage in the Life-Cycle

Reconciliation• Balancing entitlement positions, pre-balancing cash payments and resolving out of balances

•Response Capture• Processing of all Corporate Action instructions

• Election Processing stage in the Life-Cycle

Reconciliation• Balancing entitlement positions, pre-balancing cash payments and resolving out of balances

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Corporate Action ProcessesCorporate Action Processes

•Payments• Receipting and allocating event proceeds; post allocation bookkeeping

• Event Settlement and Reconciliation stages of the Life Cycle

•Tax• Creating and Maintaining information to support tax elections

•Payments• Receipting and allocating event proceeds; post allocation bookkeeping

• Event Settlement and Reconciliation stages of the Life Cycle

•Tax• Creating and Maintaining information to support tax elections

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Top “10” HighlightsTop “10” Highlights

1. Security Master File will work in unison with Underwriting and Corporate Actions

2. Capture more comprehensive information on securities during eligibility process

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Top “10” Highlights Top “10” Highlights

3. Announcement Processor

•Single Announcement Engine for DTC and GCA supporting US and Global Events

•Introduction of new naming convention aligned with industry standards

•Process complex events within a single envelope

•Link related corporate action events

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Top “10” Highlights Top “10” Highlights

4. Support Global Processing

•Leveraging current GCA platform for Global Announcements

•Calculation of Entitlements in multiple currencies

•Multi-currency Bookkeeping systems to support post-payable reconciliation process

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Top “10” HighlightsTop “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” HighlightsTop “10” Highlights

7. Improved payment reporting

•Taxes and fees will be deducted as separate line items, for improved audit trail

•Post Payable adjustments will be reversed and reallocated

8. ISO15022 / XML messaging support for entire event life-cycle

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Top “10” HighlightsTop “10” Highlights

9.Web browser access with enhanced reporting and export functionality

10. A Participant “dashboard”

that “pushes” critical information to customers

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Corporate Actions TimelineCorporate Actions Timeline

• Published Transition Plan including Processing Guide, Technical Specifications and Technical Transition Plan

• Regional Sessions October thru November to introduce the Transition Plan

• Complete Functional specs by 12/07

• Begin Coding 2008

• Customer Testing begins 3Q 2009

• Implementation begins 1Q 2010

• Published Transition Plan including Processing Guide, Technical Specifications and Technical Transition Plan

• Regional Sessions October thru November to introduce the Transition Plan

• Complete Functional specs by 12/07

• Begin Coding 2008

• Customer Testing begins 3Q 2009

• Implementation begins 1Q 2010