Slide _ACSDA ACSDA - Sao Paulo, 9 th November 2006 Invest, comply and reap the rewards The new buzz words in Corporate Actions John Falk

Slide _ACSDA INVESTCOMPLY REAP THE REWARDS

Slide _ACSDA The chain… Depository/ Exchange Client Issuers Agent Market Data Vendors Global Custodian Sub Custodian

Slide _ACSDA cost benefit analysis INVEST: cost benefit analysis Budget approval starts with a business case specifying the Cost-Benefit-Analysis and Return on Investment But, how do you measure potential risk?

Slide _ACSDA building a business case INVEST: building a business case

Slide _ACSDA measuring risk INVEST: measuring risk External risk factors –Corporate action type –Country of issue/issuer –Price volatility –Default options Internal/proprietary factors –Agent performance –Levels of STP for corporate actions processing –Number of accounts –FX exposure, level of stock lending activity, tax complexity Source: STP Magazine April 2005: Adam Stern & James Levi

Slide _ACSDA We have to focus on how we are going to implement Standards, at the same time and in the same way, across all markets. Michael Kempe - Euroclear Sibos Copenhagen 2005 Michael Kempe - Euroclear Sibos Copenhagen 2005 COMPLY

Slide _ACSDA Securities Market Practice Group Create globally agreed market practice which, integrated with standards, will bring STP. STP Standards Market Practice

Slide _ACSDA National Market Practice Groups US IL UK/IE DK NO TR SG AU FR JP CH DE ES FI BE LU NL SE ZA A role for ACSDA?

Slide _ACSDA SMPG Market Practice means –No requirement for bilateral implementations –Develop once and use with everyone Success of Corporate Action implementation depends on adherence to Market Practice

Slide _ACSDA A world without SWIFT Different Standards, Messaging & Connectivity Market Infrastructures User

Slide _ACSDA Single Window from SWIFT Reusing Standards, Messaging and Connectivity Market Infrastructures User

Slide _ACSDA The five ISO CA message types MT 564 Notification MT 565 Instruction MT 566 Confirmation MT 567 Status MT 568 Narrative 1,000 Sending and 3,000 Receiving, in 140 countries.

Slide _ACSDA SWIFTNet Data Distribution Data Providers on SWIFT Market Infrastructures DTCC GCA service London Stock Exchange Tokyo Stock Exchange SG Stock Exchange AU Stock Exchange Clearstream Canadian Depository Data Providers FT Interactive Data Telekurs WM Datenservice

Slide _ACSDA Initiator Information provider Localmarket Facilitator Investors Issuer Registrar/ Transfer Agent Market data provider Stock exchange CSD Proxy agency Custodian Proxy agency Custodian Broker Fund/investment manager CSD Registrar/ Transfer agent Insurance company SWIFTNet Proxy Voting Roles and Players Meeting notification process (via an information provider or not) Voting process Finalisation process

Slide _ACSDA Value/Benefits for the industry Reduction in risk associated with errors Cost savings Streamlining and standardisation of deadlines Audit trails/transparency Volume insensitiveness Future proofing to comply with regulatory requirements Ability to integrate new customers/agents rapidly

Slide _ACSDA Reap the rewards Move from management by review to management by exception Greatly improved visibility into exceptions Audit trail greatly improved Prioritisation by date and market value to determine resource Reduced errors

Slide _ACSDA Conclusion Automation of corporate actions delivers premier customer service, attracts more business and manages risk in a very, very complex process. David Kane, JM Morgan Securities Sibos Copenhagen 2005 David Kane, JM Morgan Securities Sibos Copenhagen 2005

Slide _ACSDA and a date for your diaries Boston October 1-5, 2007

Slide _ACSDA ACSDA - Sao Paulo, 9 th November 2006 Invest, comply and reap the rewards The new buzz words in Corporate Actions John Falk