DTCC is moving ahead with its Corporate Actions Reengineering project and continues to rewrite its core systems for corporate actions processing, including announcements, elections and payments. This reengineering will, over time, upgrade and replace more than 60 legacy systems that currently support corporate actions at DTCC, and will move corporate actions to an event-based structure.

In light of the severe economic downturn, however, we are taking steps to reduce the need for the industry to make system changes in the near term while we continue our reengineering. This reduces the cost burden that the industry and DTCC will bear in the next several years.

In 2009, we will continue to develop new products and enhancements, namely:

• Automation of survivor options instruction process.
• Upgrades in instruction processing, including EDS and SLPO functions.
• Expansion of asset servicing capabilities on Canadian events and securities held at Euroclear.
• Introduction of class actions announcements.

These offerings and enhancements will be optional for our Participants.

At the same time, we will be making internal architectural and functional changes that will position us to move to an event-based structure. Accordingly, in 2011 we will introduce enhancements which will necessitate changes to the existing CCF file layouts.

The ultimate goals of our multi-year reengineering project are:

• To make all DTCC corporate actions data – from announcements through elections to payments – event-based with a unique identifier that will be available in industry standard ISO format, and/or as XML messages.
• To continue to drive standards with the industry for corporate action announcements, specifically the development of ISO 15022, ISO 20022 and XBRL.
• To make the WAVES system, currently used by GCA Validation Service, the single announcement platform to support all announcements from DTCC. (Participant firms will ultimately be required to switch to the new, industry-standard data feeds.)

As an option for those Participants who want to adopt the event-based structure early and migrate onto WAVES, the GCA Validation Service will be upgraded to include DTC-specific data elements that are necessary for processing, and will offer, at utility pricing, a separate ISO/XML feed for DTC-eligible securities. This feed will be made available in 2010.

At this time, we have not set a launch date for the entire reengineered corporate actions system or for the decommissioning of the existing legacy files. For the short-term deliverables, detailed release plans will be available in the DTCC Development Agenda to be issued in the first quarter of 2009.

If you have questions, please contact your Relationship Manager.