National Instrument Affects All Trade-Related Parties Jane Davis Executive Director, Canadian Capital Markets Association Institutional Trade Matching Q&A, IIAC - July 18, 2007

2 NI Compels the industry to automate Regulation of trade matching parties Procedural & behavourial post trade changes required Involves front, middle & back office functions

3 Target Dates October % matched by noon on T+1 January % matched by noon on T+1 July % matched on T January % matched on T July % matched on T Q and beyond - 95% matched on T

4 Key Components Focus on policies and procedures Written acknowledgement of capabilities  Trade matching statement/agreement Phased implementation  Transitional performance targets Performance measurement  Exception reporting Mutual Dependency among trade-related parties

5 Implementation Schedule Effective April 1, 2007 Phased-in transitional performance target dates over an approximate three-year period Documentation in place by October 1, 2007 Exception reporting for fourth quarter of 2007 in February 2008

6 Policies and Procedures Accelerate trade processing from T+1 to T Integrated approach Enhanced electronic transmission Industry best practices and standards Front, middle and back office involved

7 Accelerating Trade Transmission Acceleration of trade allocations to the custodian (re: investor or fund account) and broker (re: custodian) involves:  Data availability and integrity  Frequency and timing of trade transmission  Late day systems, operations and information availability Change in work schedules Front and back office communication

8 Performance Measurement Trade-matching performance measurement  Data sources  Accuracy  Consistency Development of new reporting Analysis of results Corrective action

9 Mutual Dependency Impacts all trade-related parties  Broker/Dealers  Custodians  Investment Managers Linkage involves third party vendors/ infrastructure providers Standard Data Elements Help to facilitate changing of trading routines (algorithmic/DMA)

10 Conclusion Active subcommittees / ad hoc working groups Requires “team” culture within and between parties Sharing of best practices Lot of investment of time and money

National Instrument Affects All Trade-Related Parties Jane Davis Executive Director, Canadian Capital Markets Association Institutional Trade Matching Q&A, IIAC - July 18, 2007