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Emerging Business Models and Alliances: Whats Now and Next in ACSDA CSDs?

ACSDA 2011 General AssemblyBermuda, Mar. 23, 2011Presentation by William Aimetti, DTCC[service name] is an offering of [subsidiary name], a subsidiary ofThe Depository Trust & Clearing Corporation[Classification]N 2010 DTCC[Classification]N 2010 DTCC1Emerging Business Models and Alliances: the backgroundTechnology erasing borders and making worlds economies interlinked.Investors have assumed a more global perspective.Financial institutions are both leading and following customers across borders. Domestic or "home market" biases are giving way to opportunities for cross-border investment. Regional and national markets becoming global markets driven by cross-border capital flows and competition.

[Classification]N 2010 DTCC2Seeing Opportunities in the InfrastructureExamining ways to leverage technology and expertise together with other markets operators.Exploring ways to expand product offerings and be responsive to market growth and new products/asset classes.Looking to take advantage of local market knowledge and focus.Seeking better and more consistent risk management.GOAL: share in critical mass

[Classification]N 2010 DTCCMaking Opportunities HappenDTCC continues to look for opportunities to work with other markets through links, MOUs and agreements: We have 14 Links with other market infrastructures providing depository accounts or pledge facilities with other CSDs, including MERVALs newly approved DTC account. We have 12 MOUs for general cooperation with CSDs throughout the world and are currently planning to sign 2 more. In certain cases, these are progressing to more specific project agreements.

[Classification]N 2010 DTCCDTCs International LinksCSDs to strengthen their position as critical links in the global infrastructure.Non-US investors to hold eligible US securities locally via their own CSD, with custody centralized and serviced for their CSD by DTC.US participants and investors to pledge eligible US securities abroad via pledgee accounts owned by other CSDs.Issuers of DTC-eligible securities to economically reach non-US investors.Enables securities deliveries and receives among US and international brokers, banks and any other members of other linked CSDs.

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MERVAL5DTCCs Memoranda of Understanding20032004200520062007 20092008

2010

DTCC has signed 12 MoUs with market infrastructures since 2003DTCCs Memoranda of Understanding6DTCC and DCV: A Win-Win ApproachIn 2010, DTCC and Depsito Central de Valores, S.A. (DCV) agreed to having DTCC make a 10% equity investment in DCV and take a seat on DCVs Board as a way to Collaborate on developing broader offerings in Chile and potentially in partnership with others in the ACSDA regionBenefit from DCVs local market knowledgeTogether build new models and proofs of concept for expanding capabilities and reducing risk at lower costs through sharing of DTCCs scaleLooking for all to be partners in this.

.[Classification]N 2010 DTCCProgress to date: Business ContinuityChallenge: Strengthen DCV business continuity capacitiesProblem: while DCF has its primary data center in Santiago and a secondary technology and data center 500 kilometers away, much of Chile is vulnerable to earthquakes and the devastation they bring.Response: Back data up over the course of the day on DTCC technology thousands of miles away in North America, so that DCV can re-spool and reboot at any time.

[Classification]N 2010 DTCCBCP and Disaster Preparedness3 Key Objectives we have in common:Rapid recovery and timely resumption of critical operations following a wide-scale disruptionRapid recovery and timely resumption of critical operations following the loss or inaccessibility of staff in at least one major operating locationA high-level of confidence, through ongoing use or robust testing, that critical internal and external continuity arrangements are effective and compatibleRegulatory and industry demand for strong business continuity practices and policies[Classification]N 2010 DTCC DTCC Data CentersMultiple operating and level-4 data centers, functioning 24/7Data centers capable of extremely rapid market data replication. Capacity planning for extreme market spikesFrequent testing and disaster preparedness drills, including mandatory communications testing with customersHighly resilient, self-healing telecommunications networkLiaison with international, national and state disaster/homeland security organizations[Classification]N 2010 DTCC

Regional Centers Site #3

Out-of-Region site hosted by DTCCSite #2How You and We Would RestoreYour Data, Systems and OperationsGeographically dispersed back-up facilities for both technology and businessRedundant functionality Responsive data storage systemsQuick recovery timeResilient communications network and telecom systemRemote command and controlYour HeadquartersYou connect here(not in NYC!)

[Classification]N 2010 DTCCProgress to date: Mutual FundsChallenge:Little automation in processing of DCV member brokers and pension funds investments in offshore funds in Europe. Means: High costs Barriers to entryResponse:DCV joins Fund/SERV, the highly efficient fund processing service run by DTCCs National Securities Clearing CorpCreates pilot group to sponsor broker/dealers seeking to expand mutual fund market. [Classification]N 2010 DTCC13Confidential2011 Wealth Management Services - Offshore Mutual Funds Business PlanDTCC Mutual Fund Service: Fund/SERV

US Brokers and Banks Settlement Banksfor NSCC/DTC In USASettlement

DTCCs UK/Euro Settlement BankDTCC Fund/SERV

US Brokers and Banks UK/EuroSettlement Banks

2011: UK and Euro SettlementBrokers and BanksDTCC40,000 US Funds5,000 Offshore Funds e.g., Luxembourg, Dublin Access to Mutual Funds Services

More Possibilities among ACSDA CSDsExtend business continuity services to other CSDs in the Americas Explore other technology cooperationExtend depository services Expand pledging and collateral management toolsCollaborate on corporate actions and XBRLSupport your OTC Derivatives and your regulators need for informationBottom line: Promoting best of breed initiatives and partnerships in Americas region through ACSDA

[Classification]N 2010 DTCC