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DTCC Receives Regulatory Approval to Launch New Suite of Services For Alternative Investments Products

New York, June 3, 2008 – The Depository Trust & Clearing Corporation (DTCC) announced today it has received regulatory approval from the U.S. Securities and Exchange Commission to launch its Alternative Investment Products (AIP) suite of services. AIP, a service platform that links broker/dealers, fund managers, administrators and custodians, will provide settlement of subscriptions and redemptions for various alternative investment vehicles, automating the exchange of all trade-related account information.

“AIP will support growth in the marketplace and facilitate greater product distribution,” said Ann Bergin, managing director, DTCC Wealth Management Services. “Over 20 years ago, our Fund/SERV® system revolutionized how mutual fund orders were processed and settled. We believe AIP, modelled after the success of our other mutual fund products, will have the same positive transformation on alternate and direct investment administration.”

Alternative investment products include funds of hedge funds, single hedge funds, Real Estate Investment Trusts (REITs), private equity funds, and energy, equipment, and commodity pool funds. They are typically pooled investment products that are offered through private placements to high-net-worth individuals and institutional investors, such as pension funds. Driven by investors’ desire for portfolio diversification, the market for alternative investments has grown significantly since 2000. Hedge fund assets alone have grown to $2.7 trillion and are projected to reach $4 trillion by 2010. REIT assets, at $438 billion, have almost tripled in just five years.

Standard Formats, Standard Messages

AIP will standardize the way the alternative investment industry communicates about the investment security and the associated investments. By effectively addressing operational issues that challenge broker/dealers and fund sponsors, AIP will help the alternative investment community become more scalable through increased efficiencies, reduced operational risk and lowered costs.

“This initiative is a significant response to the industry call for standardization and accelerated progress in the reduction of operational risks,” said Gary Palmer, CEO, Irish Fund Industry Association. “Measures that have the ability to successfully accomplish these shared objectives are currently being unified in the form of a global set of guidelines of sound practices for hedge fund managers and their service providers.”

Richard H. Baker, president and CEO, Managed Funds Association (MFA), said, “MFA supports efforts to improve efficiency and reduce operational risk in the alternative investment industry, including DTCC’s efforts in creating the AIP suite of services.  MFA continues to work to create global guidelines and standardize industry practices to achieve these shared goals.”

Centralized, Consolidated Information

Alternative investments are currently handled through hardcopy, fax, email, phone calls and spreadsheets, and the lack of automation and centralization prolongs the transaction process. Not only is manual processing of these instruments error-prone, it also prevents business growth as volume outpaces the industry’s ability to manage it.

With DTCC as a central clearing facility for uniform operational functions, and thus eliminating the multiple contact points for fund sponsors, broker/dealers, administrators and transfer agents, the AIP service will streamline and automate all the processes related to trade order initiation, money settlement and post-trade reporting.

“From an administration standpoint, AIP benefits all investors and makes alternative products a much more mainstream investment,” said John White, executive director of the Investment Program Association.

“Providers of transfer agent and clearing services can now make information on alternative investments available to clients in the same fashion as mutual funds and common stocks,” said Gerald Gregorio, Managing Director in the Customer Processing and Services group at Pershing LLC, an affiliate of The Bank of New York Mellon. “Innovations such as AIP will help streamline the investment process and benefit investors and service providers alike.”

AIP was developed at the request of, and in consultation with, industry participants worldwide. This new suite of services will be offered by DTCC’s National Securities Clearing Corporation subsidiary.

About DTCC

The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with financial firms and third parties who market these products. DTCC’s depository provides custody and asset servicing for 3.5 million securities issues from the United States and 110 other countries and territories, valued at $39 trillion. Last year, DTCC settled more than $1.8 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.

About Wealth Management Services

Wealth Management Services is a business unit of The Depository Trust & Clearing Corporation (DTCC) that provides transactional and information services to the mutual fund and managed accounts industries, through solutions like Fund/SERV®; it is also developing new processing solutions for alternative investment products.  Wealth Management Services automates, standardizes and streamlines the processing of transactions and data exchange between asset managers and their network of distribution partners, lowering risk, operational costs and error rates.