1. Corporate Restructuring of CDS
Mark Weseluck – Executive Director, Customer Service and Product Development
ACSDA General Assembly – Panama City
February 22, 2008

2. Previous CDS Structure
Current shareholders
6 Banks
TSX
IDA
The Canadian Depository for Securities Limited
Securities clearing and depository services
CDS INC.
SEDAR
SEDI
NRD
Information dissemination

3. New CDS Structure as of November 1, 2006
Current shareholders
6 Banks
TSX
IDA
The Canadian Depository for Securities Limited
Holding company
CDS INC.
CDS Clearing and Depository Services Inc.
CDS Innovations Inc.
SEDAR
SEDI
NRD
Securities clearing and depository services
Information dissemination

4. Corporate Restructuring
Why restructure?
Segregate regulated and unregulated services for simplification of regulatory and financial reporting
Mitigate risk spillover between different lines of business
Provide the organization with the flexibility to establish new services within current or future subsidiaries

5. Corporate Restructuring Impacts
Corporate restructuring had various internal and external impacts:
Regulatory oversight
Corporate governance
Legal considerations
Financial issues
Staff considerations

6. Regulatory Oversight
Regulators advocated clearer separation of core and non-core services to reduce risk spillover
Proposed new structure required approval/non-disapproval from CDS’s three regulators
Formal oversight arrangements in place for regulation of core services
Revised governance structure required as part of restructuring

7. Corporate Governance

8. Legal Considerations
Most extensive role in implementing corporate restructuring:
Analysed possible legal structures
Co-ordinated and effected regulatory, governance, legal and documentation issues
Reviewed and assigned contracts to reflect new companies
Re-applied for CDS as member in other depositories

9. Financial Issues
Cost allocation of shared corporate services among subsidiary companies (direct and indirect costs)
Distribution of surpluses
Cross charging of support between sister companies
Tax considerations

10. Staff Considerations All staff employed by CDS Limited
Assigned to subsidiary companies as applicable
Corporate services provided to subsidiaries through service level agreements
Greater planning and co-ordination required for use of shared services
Opportunities for developing/advancing staff

11. Lessons Learned Start as early as possible
Have a dedicated team and manage as a project
Keep regulators informed throughout the process
Keep staff informed about the impact and progress of the project
Don’t underestimate the effort required to advise external parties and effect the legal changes