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DTCC SOLUTIONSDTCC SOLUTIONSCorporate Actions Reengineering
Transition PlanBDUG Conference 2007
DTCC DTCC
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Reasons for Reengineering
Furthering DTCC’s Corporate Action Strategy to help participants manage risk, reduce cost and achieve greater levels of STP globally while upgrading an aging system
Alignment with industry standard event structure and naming conventions
Support for various security numbering schemes, Global events and multi-currency entitlements and payments
Establishment of platform for generation of single event ID for US markets
ISO and XML Messages for Event lifecycle
The existing domestic applications (totaling 60 systems) were implemented into production at various times since 1978
The application is very complex with over 4,000 programs and 12 million lines of code with portions written in assembler, and have become increasingly difficult to enhance
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Our Approach
Creation of a single announcement and processing engine, based on DTCC’s Global Corporate Action (WAVES) Announcement Event Driven architecture
Unified screen view for Operations & clients, using the new event structure
Continued utilization of Contra CUSIPs to segregate instructed positions to help maintain transparency, thereby limiting investment by industry
Publication of announcement, entitlement, and payment information as outbound messages, in ISO15022 & XML. Instructions can also be submitted via ISO15022 & XML
DTCC will continue to support existing legacy files which use function codes for all data transmissions for 2 years after the application is fully implemented
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Summary of External Deliverables – Released on September 28th
Guide to DTCC’s Corporate Actions Reengineering Transition Plan
Business/Operations Documentation Data Reference Guide For Event Types
Corporate Action Event Scenarios
Quick Reference Guide to Business Event Scenarios
Technical Support Documentation Technical Specifications Guide
Data Reference Guide For Fields
Transition Plan
File Field Mapping from Legacy to ISO/XML
ISO Message Specifications
XML Message Specifications
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Communication Plan – Post-Release
September 28th – Industry Awareness Important Notice E-mail blast to all Reengineering contacts RM distribution to all contacts Reengineering eLetter Alert on www.dtcc.com
Regional Sessions – October thru November Sessions held at various sites across the country, open to all Participants Segments targeted to business users as well as technical project managers and BSA’s Team of DTCC employees including PM, Ops and ADM to present each component of
the plan to begin stimulating questions
Industry Presentations SIFMA BDUG
Weekly Webinar Sessions – December thru February Open sessions to address remaining questions and concerns with regards to the
transition plan
IT Working Group Sessions – Beginning in October Monthly sessions including IT contacts at Participant firms as well as representatives
from the Service Bureau community
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Guide to DTCC’s Corporate Actions Reengineering Transition Plan
Summary of supporting documentation
Summary of critical changes and enhancements including the continued utilization of Contra CUSIPs and support of legacy files
Overview of the new file formats
Delivery options for automated messages
Introduction of the customer dashboard and other enhancements to address the current practice of screen scraping
High level overview of the transition plan
Communication plan
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Summary of Critical Changes
Event Structure Common structure Unique Event ID Single announcement
Event-level Naming Changes New naming convention Introduction of sub-event type
Enhanced Entitlement Processing Expanded rate field Additional data elements
Instruction Processing Automated instruction processing Single instruction processor
Payment Reporting Enhanced audit capabilities Allocations as gross entitlements
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Message Delivery Options
All data interfaces between DTCC customers and the new Corporate Action system will be via DTCC's Common Data Transfer System (CDTS) CDTS is a "server-to-server" message and file transport facility that supports the
following functionality: Receives input data from DTCC customers and delivers to the appropriate business
application Allows DTCC customers to subscribe to and retrieve output data from DTCC
business applications using various subscription options CDTS provides DTCC customers with the option to transmit or receive their data
over multiple protocols. Message can be sent via FTP (File Transfer Protocol) NDM (CONNECT:Direct, formerly Network DataMover) software MQ (IBM WebSphere MQ)
SOURCE will introduce many new options that enable customers to customize the receipt and format of their interaction with DTCC
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Customer Browser and Dashboard Features
The new customer browser will contain a customer dashboard – a feature will provide customers with a personal home page that enables them to quickly identify important events.
Key features include: Multiple views for reorganization, dividend, and redemption events
Link for users to directly access DTCC's Liability Hub
Scrolling broadcast message line
“Events expiring today" section that reports intraday updates to critical fields and positions
"Work item" section that identifies certain actions that a participant must take (e.g., approving instructions)
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Reengineering and Screen Scraping
Intra-day automated messages For all aspects of the corporate action event lifecycle Examples include intraday rate changes, allocations, and adjustments Firms can choose to retrieve this information and match up to internal systems for
critical issues
Customizable customer dashboard At the individual user level, firms will be able to customize the dashboard to highlight
events that are close to expiration
Download feature For various functions, DTCC will provide the user with the ability to download a set of
search results into a spreadsheet format
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Business/Operations Documentation
Data Reference Guide For Event Types Revised version of the existing Reference Guide with a mapping of DTC’s legacy
function codes, ISO event types, and GCA VS event types to the new event types
Corporate Action Event Scenarios Approximately 65 event scenarios that describe the changes that will occur as a result
of the new system Covers events across reorganizations, redemptions, and dividends with variations on
common events
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Technical Support Documentation
Technical Specifications Guide Overview of how to best utilize all of the technical documentation
Data Reference Guide For Fields Lists all of the fields in the new system including the following attributes:
Parent Level Level Field Name Data Type ISO 15022 XML Tag
Includes data dictionary for field definitions Contains the valid values for all announcement fields
Transition Plan Details regarding the phased migration off of the existing system with external impacts
and benefits File Field Mapping from Legacy to ISO/XML
Mapping of current data fields an approximately 16 files currently available
ISO & XML message specifications Revised versions of the specifications released at the end of 2006
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Transition Plan Overview
Transition Approach / Principles Multiple phases to allow incremental transition
Supports staggered development and testing Allows earlier delivery of Global Announcement Capture component
Minimize Risk Major phases with data migration / conversion during off-peak windows (Feb / Aug) Minimize time between phases to reduce cross-platform processing risk
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CA SOURCE 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
Response Capture Processing of all corporate action instructions Election processing stage in the life-cycle
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CA SOURCE Processes
Reconciliation Balancing entitlement positions, pre-balancing cash payments and resolving out of
balances
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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Transition Phase 1 (Q3 2009 to Q1 2010)
Phase 1: Announcements
Summary: Announcement processor implemented for all corporate action events
Entitlements, response capture, reconciliation and payments continue in legacy system
Announcement creation and enrichment via new platform Stock exchange feeds Security master file announcement generation Agent rate updates Manual creation and enrichment from source documents
Existing dividend (DIVA), reorg and redemption (RIPS) announcements converted to new event structure
GCA VS Converted to new event structure
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Transition Phase 1 (Q3 2009 to Q1 2010)
Phase 1: Announcements
External impact: New CA browser available for all announcement Inquiries
Customer dashboard launched with announcement functionality
Availability of ISO and XML event notification messages
PTS/PBS functions remain in parallel with new browser
Continued support of legacy files
New CA browser used by all GCA customers inquiries
Continued support of GCA legacy files
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Transition Phase 1 (Q3 2009 to Q1 2010)
Phase 1: Announcements
Benefits & Features: Global announcement platform supporting events in Europe and Asia in addition to North
America
New event structure based on ISO15022
Common event reference ID across all events
Related events
Expanded comment fields utilizing templates
Expanded corporate action data
Introduction of “No Action” option
GCA customers receive new ISO & XML messages
DTC and GCA VS are on common platform
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Transition Phase 2 (Q1 2010 to Q3 2010)
Phase 2: Reorg Events (Excludes redemptions, maturities and calls)
Summary: All processing for mandatory and voluntary events except redemptions, maturities and
calls are implementede.g. mergers, reverse splits, name changes, tenders, rights, warrants, conversions, puts
Processes include: Entitlements Response capture Reconciliation Payments
In-flight events are converted – processing completed in the new system
All other non-mandatory/voluntary events remain in legacy system
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Transition Phase 2 (Q1 2010 to Q3 2010)
Phase 2: Reorg Events (Excludes redemptions, maturities and calls)
External impact: CA browser available for all announcements, in addition to entitlement and payment
inquiries on mandatory and voluntary events
All instructions entered via new system
Customer dashboard expanded to include instruction management tools
PTS/PBS retired for covered events
Availability of ISO and XML messages for entire life-cycle
Continued support of legacy files
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Transition Phase 2 (Q1 2010 to Q3 2010)
Phase 2: Reorg Events (Excludes redemptions, maturities and calls)
Benefits & Features: Consolidated instruction processor for all voluntary instructions with instruction approval
process
Option specific instruction cutoff dates and times
Automated instructions
Non-USD processing for impacted events e.g. reorganization events
Enhanced pledge release processing
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Transition Phase 3 (Q1 2010 to Q3 2010)
Phase 3: Distribution and Redemption Events
Summary: Entitlement processing for cash and stock distribution events e.g. cash dividend, stock
splits, stock dividend, spin-offs, interest, principal payments, optional dividends etc.
Entitlement processing for maturities, redemptions and calls
Instruction processing for optional dividends, TaxRelief, foreign currency, US tax withholding
Position balancing and reconciliation components
Payments will continue to be processed in the legacy system however payment inquiries (SDAR) will be available via new user interface
In-flight events are converted – processing completed in the new system
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Transition Phase 3 (Q1 2010 to Q3 2010)
Phase 3: Distribution and Redemption Events
External impact: CA browser available for all announcement, entitlement and payment inquiries
All instructions entered via new system
Customer dashboard expanded to include instruction management tools for distribution events
All external PTS/PBS functions retired
Availability of ISO and XML messages for entire life-cycle; all external interfaces completed
Continued support of legacy files for 2 years
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Transition Phase 3 (Q1 2010 to Q3 2010)
Phase 3: Distribution and Redemption Events
Benefits & Features All external customer interface impacts are completed
New ISO messages New XML messages New browser user interface
Instruction approval process
Automated instructions
Non-USD processing for impacted events
Accurate announcements and processing for equity derivatives
Miss/made transfer processing enhancements (position adjustment vs. cash adjustment)
Standing instructions for DRIP, foreign currency
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Post-Transition
Post-Transition Phase: Focus on internal enhancements for the distribution and redemption payment process
Post Internal Payment Processor: Cash pre-balancing for cash distribution events e.g. cash dividends, interest, principal
payments, optional dividends etc.
Consolidated cash payment processor for cash distributions, maturities, redemptions and calls
Payment processor for all stock distributions
Post Legacy File Retirement Following Industry Conversion Enhanced data precision e.g. fractional round-ups
Expanded rate data
Agent fees in greater detail
Solicitation fees processed though DTC
Pro-rata calls
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External Transition Schedule
Key Milestones:
External customer UAT begins in Q3 2009
Phase 1 production migration completes in Q1 2010
All external customer impacts (UI / Message interfaces) completed after Phase 3 in Q3 2010
Retirement of legacy CCF files in Q3 2012
