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DTCC - The Outlook for 2007. Rich Lanning BDUG October 2006. Technology / Communication Plans for 2007. PBS 2.0 SMART Messages Multi Protocol Label Switching Upgrade (MPLS) Common Data Transfer Services Web Service Simplified Sign-on. PBS Version 2 Update. PBS 2.0 Launch

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DTCC - The Outlook for 2007

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DTCC - The Outlook for 2007

Rich Lanning

BDUG

October 2006


Technology / Communication Plans for 2007

  • PBS 2.0

  • SMART Messages

  • Multi Protocol Label Switching Upgrade (MPLS)

  • Common Data Transfer Services

  • Web Service Simplified Sign-on


PBS Version 2 Update

  • PBS 2.0 Launch

    • Internal Pilot (8/7 – 9/30)

    • External Beta

      • 2 Firms (10/1 – 10/31)

      • 10 Firms (11/1+)

    • General Availability – Phased Rollout (2/15)

  • Benefits

    • Single sign-on between PBS and PBS 2.0 functions

    • Applications re-platform

      • Off the mainframe

      • Enhanced security framework (seamless to users)


Urban Legend ?!

  • PBS Slowdown w/ Settlement between 1-3 PM

    • Contact CSC (1 888 382 2721 - Option 1 PBS related problem) as they occur

    • State that user is experiencing a "disruptively slow response time on PBS", the PBS function they are using, and the approximate time they first experienced the issue.

    • Will not be able to immediately remedy the situation but that we plan to use the collected information to analyze and determine the cause and solutions.


PTS Screenscraping

  • Uploads for DO, NDO, IPOS and PO to be handled as part of 2007 planning

  • Investigating alternate delivery of PBS data

    • CA Re-Engineering - Messages will be published and the on-line queries will be supported with the ability to export lists to Excel.

    • CCF Files –

      • Projection files (CSHPRJ),

      • intra-day allocation files (CSHSTA - CSHSTJ),

      • EOD allocation files (CSHSET)

      • EOD unallocated files (CSHUNL)

  • Please do not screenscrape PBS!!


SMART Messages

  • Fact: 3270 printer support will be phased out over time

  • SMART Messages is now generally available – Please try it!

  • Deposit ticket options are still being reviewed and will be finalized shortly


SMART/Messages

Short Term deliverables

  • Home Page

    • Display more than 5 days worth of available tickets - Max is 7 days.

    • Update Replay button in order to be more intuitive

    • Enhanced sorting capabilities


SMART/Messages

  • Ticket Display Page

    • When viewing group of actual tickets be able to:

      • Provide better delineation between tickets

      • Allow users to search for ticket specific information

      • Allow users to print individual/specific tickets w/in all shown and not just the entire range

  • Enhanced search capabilities:

    • Account #

    • $ amount

    • Status

    • Other ticket specific information


SMART/Messages

  • Message List Page

    • Display more than 30 tickets at a time (however, we need to keep a limit on the total number displayed as that could increase response times)

    • Allow users to move between groups of 30 tickets instead of using the back and forth buttons (e.g. 1-30, 31-60, 61-90, etc.)


SMART/Messages

Long Term Enhancements

  • Home Page

    • Enhanced sorting capabilities

      • Ticket type

      • Use of filters/ticket specific information

    • Alerts

      • Notify users when something new has come.

      • Allow users to define alert parameters.

      • Parameters to include: Time, Ticket Type, Other Ticket Specific Information.


SMART/Messages

  • Home Page (cont.)

    • Allow users to create a profile (i.e. define which ticket types should go to which destination – 00, 01, 02, xx)

    • Indicate which tickets in a range of tickets have already been printed

  • Message List Page

    • Display ticket specific information in the message text field.


  • SMART/Messages

    • Ticket Display Page

      • Identify when a ticket has already been printed, especially when a range of tickets has been printed.

      • Allow tickets to be downloaded either individually or in groups so users can archive


    MPLS Network Upgrade

    • A technology “refresh” which requires swapping out the “old” frame relay circuits & routers

    • The new MPLS routers & circuits will offer optional features such as encryption

    • It is not a small effort & we hope to have it significantly completed in 2007

    • We ask for your assistance with the coordination with this task


    Common Data Transfer Service

    • An effort to re-engineer our message & file systems onto a single enterprise-wide architecture

    • Meeting with participants between now & the end of 2006 to examine message & file interfaces

    • Results will be published in Q2 2007


    Web Service Simplified Sign On

    • Will be swapping out existing PC Web Direct digital certificates with new DTCC Web Direct certs

    • Piloted in October with 10 firms. November general migration of ACATS & MF services

    • Will work with each firm’s Access Coordinator to review & authenticate each user’s existing access


    DEMATERIALIZATION


    Direct Registration System (DRS)

    • July 2006:

      • SEC rule approved - all exchange listed issues must be DRS eligible

        • 1/1/2007: new issues coming to market must be DRS eligible

        • 1/1/2008: all listed issues must migrate to DRS

      • SIA approaches regional exchanges


    DRS – Jan 2007 – New Issues

    • Underwriter awareness

      • Information flow to Syndicate Operations Division

      • Letters to all underwriters

      • @ DTCC article

    • US Facilities shut down

    • Eliminate Hold and Bust function

      • Minimal transaction volumes

        • 2 “Bust” per day.

      • Certificate transactions continue to decline


    DRS

    • Mid 2007:

      • Begin analysis of eliminating cert. for DRS eligible issues

      • Info exchange with DTCC Board, SIA, and industry

    • 3Q 07: Implement DRS processing enhancements

      • Move “all” shares

      • Move “all”, sell fractions

      • Move “all”, terminate account, sell fractions


    DRS

    • Jan 2008:

      • All NYSE, NYSE Arca, Nasdaq, and Amex issues must be DRS eligible

      • Expand DRS to other exchanges

    • 2Q 08:

      • Default to “statement only” for DRS eligible issues

      • Currently: 80% of WTs are for DRS eligible issues


    WTs

    • 2007:

      • Avg. daily WT cert. volumes decline by 22%

      • WT DRS statement volumes increase by 50%

    • 2Q 07:

      • Explore limited processing days each week for WTs


    WTs

    • Mid 2008:

      • WT processing truncates to 2X a week

      • Prepare to eliminate DMD processing

    • 4Q 08:

      • Sunset DMD functionality


    Deposits

    • 2Q 06: Efforts continue to expand Paperless Legal program

      • Letters and flyers to agents

      • @DTCC articles

      • One-on-one contact with agents and participants

    • Jan 2007:

      • “No paper” processed for legals

      • Six month break-in period / paper stripped & returned for PLAs

      • Presentments outside of DTC for non-participating agents in July 2007


    Deposits

    • July 2007:

      • No paper legal transactions accepted by DTC

    • Sept 2007:

      • DTC begins to charge for paper legal transaction rejects

    • 4Q 2007:

      • Explorelimited processing days each week for deposits


    Deposits

    • 2Q 08:

      • Truncate deposit processing to 2X each week

      • Consider sun-setting BDS

      • Exceptions:

        • Reorg deposits

        • Custody deposits

        • Restricted deposits


    Non-Transferables

    • 2007:

      • Over 1 million cert. in vault

      • PREM and Destruction process continues

      • As cert. decline, economies of scale diminish

    • Jan 2007:

      • Fees increase

    • 3Q 2007:

      • Explore eliminating new deposits

      • Fee increases considered


    Custody

    • 2007:

      • Growth continues as less fungible cert. in circulation

      • Vault houses over half million cert. and growing

      • All manual processes, with no economies of scale

    • 1Q 08:

      • Recommend “right sizing” fees

    • 3Q 08:

      • Plan for sun-setting of ESS service


    Custody

    • 1Q 09:

      • Evaluate options for processing efficiencies and cost cutting


    OTHER 2006 / 2007 NEWS


    Other News You Can Use!

    • Settlement Hotline Established – 212 855 5800

    • 2007 Fee Impact Analysis will be available in late November

    • Real time link between Omgeo’s Tradesuite & DTC in November – Late Affirm Processing

    • DTCC Learning – Review certification opportunities & new e-learning offerings

    • 2007 BCP Testing & Out of Region Recovery Planning


    Annual Meeting Recap


    ATP Re-Design

    • Feedback on handout describing the holiday processing proposal

    • ISO 15022 Message Formats Feasibility

    • Real-time 24x6


    DTC Operational Metrics

    • Like you, we have hundreds of internal operational performance metrics.

    • We always tell you how we are doing... after we do it.

    • This year we selected 17 metrics from our catalog that we thought clients would be most interested in. We vetted those with the OAC and ASAB in 2005.

    • We set targets and are monitoring performance with the OAC and ASAB. We are planning to distribute more broadly in 2007.

    • We hope this adds additional transparency and accountability.

    • Are there other metrics you would be interested in for next year?


    Structured Securities

    • Be mad as hell and pledge not to take it anymore.

    • White papers are nice but it's time for action.

    • Paying agents are not the problem - the structure of many deals is.

    • The community is together trying to separate the bad from the good deals and make recommendations for each.

    • We do not want to harm to the investor with our actions.

    • BDUG is welcome to the table!


    QUESTIONS?


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