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DTCC Extends SMART/Track Service to Foreign Agent Lenders and Borrowers

New York, November 28, 2007 – To support the U.K. Financial Services Authority's (FSA) enhanced requirements for agency lending disclosure with the implementation of Basel 2 in Europe, DTCC's SMART/Track for Agency Lending Disclosure service will soon be made available to members of the International Securities Lending Association (ISLA), beginning in mid-December.

European agent lenders will be able to use DTCC SMART/Track to create unique identifiers for non-U.S. principal lenders -- one of the required data elements in the agency lending files -- to disclose the identity of the principal lender to borrowers, so the borrower can complete a credit and capital analysis of the underlying, or principal, lender. The FSA requires agent lenders to disclose the identity of their principal lenders to borrowers and to provide details of exposures to underlying principals at least monthly from January 2008.

"Since 2006, ISLA has been planning a two-stage approach to introducing agent lender disclosure in Europe:  an interim phase involving at least monthly disclosure followed by the introduction of daily disclosure in line with the U.S. market," said David Rule, ISLA Chief Executive. "Working with DTCC and using SMART/Track is a quick and easy solution to assigning unique identifiers that will ensure consistency with U.S. practices."

In addition to the Web screen feature in SMART/Track for Agency Lending Disclosure that creates these unique identifiers, the system can also act as a 'post office,' transmitting the agency lending data files between lenders and borrowers.  SMART/Track provides acknowledgments and receipts for the file transmissions. 

By January 2010, the FSA has stated it will require full, daily disclosure for all firms borrowing securities, at point of trade where possible and no later than a business day following settlement date. This initiative is similar to the one undertaken in the U.S. under the auspices of the U.S. Securities and Exchange Commission (SEC) and the Federal Reserve. Since October 2006, U.S. agent lenders have provided daily disclosure of underlying principals to U.S. borrowers using standardized file formats and DTCC as a data transmission hub. 

"We are pleased that our SMART/Track service for Agency Lending can be leveraged to satisfy similar requirements in the E.U.," said Susan Cosgrove, Managing Director, DTCC Clearance and Settlement Group. "Extending use of the service beyond US domestic agent lenders and borrowers facilitates a standardized and cost effective global solution."

As a next step, ISLA is establishing a working group of borrowers and agent lenders, reporting to the ISLA Board, to oversee the planning and implementation of a model for daily disclosure in Europe.

About ISLA

The International Securities Lending Associate (ISLA) is a trade association established in 1989 to represent the common interests of participants in the securities lending industry. ISLA has around 90 members comprising insurance companies, pension funds, asset managers, banks and securities dealers, representing more than 4000 clients. Whilst based in London, ISLA represents members from more than 20 countries in Europe and North America. More information is available at www.isla.co.uk.

About DTCC

The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, money-market instruments, government and mortgage-backed securities and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC's depository provides custody and asset servicing for 2.8 million securities issues from the United States and 100 other countries and territories, valued at $36 trillion. Last year, DTCC settled more than $1.5 quadrillion in securities transactions. DTCC has operating facilities in multiple locations in the United States and overseas. For more information on DTCC, visit www.dtcc.com.