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DTCC SAYS POSTPONEMENT OF T+1 WILL NOT AFFECT ITS MODERNIZATION SCHEDULE

New York, November 13, 2001 - The Depository Trust & Clearing Corporation (DTCC) announced today that it would continue with its scheduled plans to re-engineer its technology applications in preparation for straight-through processing and delivery of enhanced services, despite a one-year delay in implementing T+1.

"The changes we now have under way, while prerequisites for both straight-through processing and T+1, are much broader in scope and offer a number of benefits to the industry even without T+1 implementation," said Dennis Dirks, DTCC's chief operating officer. "Consequently, we intend to push ahead and adhere as much as possible to the schedule we originally established."

Dirks said all the changes planned for the next two years will help to simplify and streamline industry practices both in the United States and internationally, promote global interoperability, provide better risk management, move toward common standards and adopt best practices.

The items on DTCC's agenda, Dirks said, include:

• Reducing investment costs and interface requirements-by adopting standardized communications capabilities and leveraging the real-time trade matching system developed for government and mortgage-backed securities to incorporate corporate and municipal bonds and other NSCC-eligible issues into this common front-end for fixed income issues.
• Reducing risk-by making a change in the NSCC guarantee to trade date, reducing industry settlement risks and providing real-time access to trade clearance and settlement information to allow firms to find and fix problems quicker and reduce the risk of fails.
• Reducing costs and improving settlement-by implementing a single settlement system for DTC and NSCC to permit settlement of a single dollar amount rather than two daily and by performing a major rewrite of the Continuous Net Settlement (CNS) system to eliminate redundant reports and speed the settlement process. DTCC is also planning on automating settlement of non-CNS trades to reduce expensive manual settlement requirements. . DTCC plans over the next months to seek to incorporate additional modifications into the planned CNS rewrite to provide additional functionality in the system, slightly slowing down the planned timetable.
• Improving global settlement capabilities-by continued adoption, where appropriate, of international standards to expand international settlement services and by continuing to incorporate multi-currency capabilities into the settlement system.

"The benefits of these and other changes we are making go well beyond T+1 implementation," Dirks said. "For example, it is why we're trying to complete-before year-end-the synergies we can leverage from consolidating the clearing corporations for government securities, mortgage-backed securities and emerging-market debt under DTCC."

The Securities Industry Association (SIA) recently announced a decision to push back implementation of the shorter settlement cycle from June 2004 to June 2005 to give the industry more time to make the required changes to their systems.

"We believe it would be a mistake for us not to continue to make progress on our objectives to change our technology applications as quickly as we can," Dirks added. "The benefits will be available to any firm ready to take advantage of them, whenever they are ready, and we'll have the benefits of additional testing time before T+1. We have already made significant progress toward those goals, and these are already providing major benefits to our participants."

Objectives already achieved by DTCC include:

• Enhancing capacity and improving risk management-by moving to multi-cycle input or real-time input from the New York Stock Exchange, Nasdaq and major electronic communications networks (ECNs), as well as a number of major regional exchanges, and by expanding capacity to handle up to 60 million transactions daily. DTCC is also beginning to phase-in multi-cycle output to securities firms of their trade information during the day to allow greater ability to know positions and settlement status, reducing risk.
• Providing greater access to services at lower costs-by improving Web access to services provided by DTCC's depository and clearing corporation subsidiaries, including introduction of its new Customer Desktop interface in November.
• Reducing paperwork and enhancing automation-by moving all clearing corporation reports from hard copy to electronic reporting only and eliminating six-digit date output and speeding the transfer of information.
• Ensuring settlement finality-by eliminating the provision that allows the depository's resale of securities back to the original seller in the event of a participant failure to ensure finality of settlement.

About DTCC

The Depository Trust & Clearing Corporation (DTCC), with operating facilities in multiple locations in the U.S. and overseas, is a holding company for six subsidiary businesses - a depository and five clearing corporations - as well as the co-owner with Thomson Financial of a global joint venture called Omgeo. Through its subsidiaries, DTCC provides clearance, settlement and information services for equities, corporate debt, municipal debt, government securities and mortgage-backed securities in the U.S., and emerging markets debt trades globally. It is also a leading clearinghouse for mutual funds and insurance products, linking funds and carriers with distribution networks. In addition, DTCC provides custody and asset servicing for more than two million securities from the U.S. and 84 other countries. For more information on DTCC, see www.dtcc.com.