2. ACSDA VIII GENERAL ASSEMBLY MARCH 31, 2006
Larry Thompson
Managing Director and General Counsel of The Depository Trust & Clearing Corporation

3. DTCC’S EXPERIENCE WITH REFCO SECURITIES LLC

4. DTCC—BACKGROUND DTCC—Holding Company
DTCC’s depository—The Depository Trust Company (DTC)
DTCC’s other subsidiaries
Fixed Income Clearing Corporation (FICC)
National Securities Clearing Corporation (NSCC)
Other subsidiaries (e.g., DerivServ LLC)

5. DTCC’S RELATIONSHIP WITH REFCO
Refco Securities LLC (Refco)
Regulated by the SEC and NASD
Registered broker-dealer
Member of DTC, FICC (both Divisions) and NSCC
Must maintain minimum financial standards
Open positions at all 3
Collateral deposited at all 3 to support activity

6. THE REFCO EXPERIENCE October 10, 2005 news story
Related to Refco Inc, an affiliate of the DTCC member
NOT the member itself

7. THE REFCO EXPERIENCE—cont’d
Significance of regulated entity
Loss of market confidence in all Refco entities
Firm determines to wind down in an orderly fashion

8. THE REFCO EXPERIENCE—cont’d
Significant role of the DTCC clearing agencies
Information providers and market facilitators
Wind-down of significant activity
Preparation for ceasing to act, if necessary

9. THE REFCO EXPERIENCE—cont’d
Communications to clearing agencies’ memberships
Communications with Regulators, the firm’s settling bank and other clearing corporations

10. THE REFCO EXPERIENCE—cont’d
Voluntary termination of DTCC memberships
No loss to DTCC members

11. THE REFCO EXPERIENCE—cont’d
Lessons learned
Rule changes
Special collateral premium example