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Stuart Z. Goldstein
DTCC
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DTC and NSCC Name Single Slate of Directors and New Management Team
New York, June 14, 1999 - The Depository Trust Company (DTC) and the NationalSecurities Clearing Corporation (NSCC) announced today two significant steps toward the planned integration of the two companies: their respective boards have named a single slate of directors to serve on both boards and picked a new management team for the holding company.
The integration plan first announced in March calls for a holding company structure with two separate operating subsidiaries (DTC and NSCC), an executive management team and a single slate of directors. Regulatory approval, which is required before the holding company can begin operating, is not expected until later in the year.
"The steps we're taking now," said Jill M. Considine, the Chairman and CEO of DTC and designated CEO of the new holding company, "put in place the necessary foundation to help move the integration process along expeditiously.
"As we consider the number of timely issues facing our industry, such as extended trading hours, shortened settlement cycles (T+1) and decimalization, we need to unify ourthinking and the timely execution of strategy at DTC and NSCC to meet the rising expectations and needs of the markets - and customers we serve. A single slate of directors, serving on both the DTC and NSCC boards, will allow our two organizations tobegin this process."
A Single Slate of Directors
The plan approved at meetings of the NSCC and DTC Boards last week established a single group of individuals to serve on each board for the three separate legal entities: the holding company and each of the two operating subsidiaries. The election of these directors by shareholders of DTC and NSCC will occur this summer.
The group of directors will number 27 with one caveat. The NSCC Board will have 27 voting members. Since applicable federal law limits DTC's Board to 25, two NSCC Boardmembers will attend and fully participate at DTC's board meetings as non-voting advisors.
The new slate of directors, which will begin serving in July, includes representativesfrom 22 participant organizations, with the remaining representing the exchanges (2) and management (3). The list includes:
Jeffrey C. Bernstein
Senior Managing Director,
Bear Stearns & Co.Lisa R. Colby-Jones,
Managing Director & Head of Institutional Securities Business Worldwide Operations
Morgan Stanley Dean WitterJ. Michael Connelly*
Managing Director & Division Head of North American Operations & Correspondent Services
BT Alex. Brown Inc.
(*DTC non-voting advisor)Jill M. Considine,
Chairman & Chief Executive Officer
The Depository Trust Company (DTC)Dennis J. Dirks,
President & Chief Operating Officer
The Depository Trust Company (DTC)James D. Dixon,
Group Executive of Technology & Operations
Bank of AmericaSteven G. Elliott,
Senior Vice Chairman & Chief Financial Officer
Mellon Bank CorporationEdward L. Goldberg,
Executive Vice President, Operations Services Group
Merrill Lynch & Co., Inc.Gary F. Goldring,
Senior Managing Director & Co-Chairman of the Executive Committee, Operations
Spear, Leeds & KelloggMark L. Harris*
Executive Vice President & Chief Operating Officer
Van Kampen Investor Services Inc.
(*DTC non-voting advisor)David M. Kelly,
President & Chief Executive Officer
National Securities Clearing Corporation (NSCC)Ronald J. Kessler,
Corporate Vice President & Director of Operations
A.G. Edwards & Sons, Inc.Richard G. Ketchum,
President & Chief Operating Officer
National Association of Securities DealersEdward A. Kwalwasser,
Group Executive Vice President
New York Stock ExchangeRobert F. Lucey,
Senior Managing Director & Chief of Operations
Putnam InvestmentsPeter B. Madoff,
Senior Managing Director
Bernard L. Madoff Investment SecuritiesKenneth K. Marshall,
Executive Vice President & Chief Administrative Officer
Instinet CorporationJames H. Messenger,
Chief Executive Officer
National Financial Services CorporationJohn R. Mohr,
Executive Vice President
New York Clearing HouseThomas J. Perna,
Senior Executive Vice President of the Financial Companies Services Sector
The Bank of New YorkAlbert E. Petersen,
Executive Vice President, Strategy Advisor
State Street Bank & Trust CompanyPeter Quick,
President
Quick & Reilly, Inc.Steven L. Scheid,
Executive Vice President & Chief Financial Officer
The Charles Schwab CorporationRobert H. Silver,
Executive Vice President & Director of Operations/Service & Systems
PaineWebberThompson M. Swayne,
Global Investor Services Executive Vice President
Chase Manhattan BankMelvin B. Taub,
Senior Executive Vice President, Director of Operations & Information Technology
Salomon Smith BarneyEdward F. Watts, Jr.,
Managing Director, Chief of Staff of Global Operations
Goldman, Sachs & Co.
Previously, the DTC and NSCC boards had a combined total of 38 directors including representatives from 24 participant organizations, with the remaining representing the exchanges and management. Since participant firms may have had representatives serving on both NSCC's and DTC's boards, firms were asked to choose only one representativeto continue serving on the boards.
A New Management Team
To support the holding company, a new management team was also announced by Considine. "Our objective now - and going forward - is to build on the talent at both NSCC and DTC, and to be guided in our efforts by a commitment to best practices," she said.
"While regulatory approval may not occur until late in the year, we can use this time wisely to get to know more, share more and identify those issues important to oursuccess. The process will be evolutionary and we can expect further organizational changes down the road."
This announcement includes the following appointments:
David M. Kelly, while Vice Chairman of the holding company, will assume the additional responsibility of Product Development and Marketing for the new corporation. Mr. Kelly will lead the effort to create a single point of access for all of our products globally and in serving our increasingly diverse client base. Reporting to Mr. Kelly as part of these additional responsibilities will be Steve Labriola (currently Managing Director for Marketing & Corporate Communications at NSCC) and Robert McGrail (currently Executive Vice President of Participant Services at DTC).
Mr. Kelly will continue in his role as President and CEO of NSCC, CEO and Vice Chairman of Government Securities Clearing Corporation, Chairman of the Board and CEO of International Securities Clearing Corporation. Risk Management activities for NSCC will continue to be under the direction of Peter Axilrod, Managing Director, Surveillance, Membership and Risk Management and report to Mr. Kelly.
Dennis J. Dirks will be named Chief Operating Officer for the new holding company. In this new role, Mr. Dirks will assume responsibility for General Services and Corporate Communications. Richard W. Myers has been appointed Director of General Services and Stuart Z. Goldstein will become Director of Corporate Communications for the holding company, reporting to Mr. Dirks (both are from NSCC). Mr. Dirks will retain his title and current responsibility as DTC's President and COO. Glenn Mangold, Executive Vice President for Operations at DTC, will continue to report to Mr. Dirks.
Richard Macek will become the Director of Finance for the holding company, reporting directly to Jill Considine. He currently serves as CFO and Treasurer of NSCC. Mr. Macek will be responsible for fully integrating the finance and treasury functions of both organizations. Michael Agnes, Senior Vice President and CFO at DTC and his staff will now report to Mr. Macek.
Richard B. Nesson, currently DTC's Executive Vice President and General Counsel will assume responsibility for the combined Office of General Counsel in the new corporation. Karen L. Saperstein, NSCC's Managing Director, General Counsel and Secretary, and her staff will join with Mr. Nesson and DTC's legal staff to form a fully integrated legal department at the holding company level.
Stuart A. Fishbein, Senior Vice President and General Auditor at DTC will assume responsibility for Internal Audit at the holding company. Jeff Abramczyk, Vice President of Audit at NSCC and his staff will report to Mr. Fishbein.
The Corporate Strategic Planning function is a critical area for the holding company.
Mr. McGrail will lead a small team to include NSCC Managing Directors Steve Labriola, (Marketing), John Vrettos (Strategic Planning) Dennis Earle and Vice President Margaret Koontz, (The Resource Company), and DTC Managing Directors Julie Pendergast and Mary Ann Callahan (International Division),to further define this role and recommended a framework by mid-summer.
Donald F. Donahue and Max Palmer, Directors of Information Systems for DTC and NSCC, respectively, have been asked to work with Dennis Dirks and the operations areas of DTC and the Securities Industry Automation Corporation (SIAC), to begin devising the future systems architecture for the new organization. SIAC serves as NSCC's facilities manager and systems development partner.
The day-to-day management of Information Systems will continue at the operatingsubsidiary level (DTC and NSCC) to ensure that there is no disruption in current effortson Year 2000 compliance or the delivery of vital client services.
An outside search has been initiated for the Director of Human Resources at the holding company. A key attribute in the candidate search will be someone versed in change management and building a culture for the new company. Until the position is filled, Neil S. Carfagna, Managing Director of Human Resources for NSCC, and Richard J.O'Brien, Vice President of Human Resources for DTC, will work together in managing this function and further integrating NSCC and DTC human resource policies andprograms.
The Depository Trust Company (DTC) is the world's largest securities depository, holding nearly $19 trillion in assets for its participants and their customers. DTC is anational clearinghouse for the settlement of trades in corporate and municipal securitiesand performs securities custody services for its participating banks and broker/dealers.Last year, DTC processed over 164 million book-entry deliveries valued at more than $77trillion. Owned by members of the financial industry who are its users, DTC is a limitedpurpose trust company under New York Banking Law, a member of the Federal Reserve Systemand a registered clearing agency with the Securities and Exchange Commission.
National Securities Clearing Corporation, established in 1976, is the leading providerof centralized post-trade comparison, trade guarantee, trade netting, settlement andinformation services for equities, bonds, Unit Investment Trusts, mutual fund andannuities transactions in the United States. Its participants include more than 2,000broker/dealers, banks, mutual fund companies, insurance carriers and other financialintermediaries. Last year, NSCC cleared and settled transactions in excess of $44.6trillion. NSCC is owned by the New York Stock Exchange, American Stock Exchange and theNational Association of Securities Dealers, Inc.