SMART/Track for Buy-ins is a Web-based system that standardizes and automates the creation, delivery and tracking of buy-in notices for the securities industry, providing a single point of entry for brokers sending or receiving buy-in notices.

Overview

SMART/Track for Buy-ins is a web-based system that enables automated communication and tracking of NSCC CNS and non-CNS (e.g. NYSE, AMEX, NASD and NSCC Non-CNS) buy-in notices as well as MSRB closeouts. SMART/Track for Buy-ins replaces the existing buy-in functions on PEX, DTC's Participant Exchange system, and provides additional functionality including the ability to track a notice throughout its lifecyle. Through the system, participants can easily create, send, process and track buy-in notices.

Who can use the service

The service is currently available for use by any existing NSCC clearing firm or DTC settling member.

Benefits

• Replaces dated PEX screens with user-friendly web screens
• Provides tracking functionality with online reporting and real-time status information of open buy-ins
• Supports Straight-Through Processing

Once fully implemented, the service will feature the following:

• Online cancellation and updating of a buy-in notice
• Search and sort capability on any field in a buy-in notice
• Audit trail with a complete record of actions taken regarding a notice, including time, date and the person taking the action
• Link to DTC systems to indicate if the security is undergoing a dividend or corporate action or has been chilled for delivery.
• Automatic archiving
• Seven-year record retention easily available online.

How the service works

Each firm must designate two or more access coordinators who have responsibility for authorizing subsequent users within the firm to access SMART/Track for Buy-Ins. If a firm has not already designated access coordinators for one of DTCC's Web applications, it must complete an Access Coordinator Form and submit the form to its DTCC Account Executive, who initiates the online registration process. If a firm already has access coordinators, a new Access Coordinator Form is not required unless the firm wants to designate different access coordinators for the buy-in function. If a firm has more than one participant number, the access coordinator can assign entitlements to a user so he or she can act on behalf of the firm's multiple numbers.

The user's personal information (name, e-mail address, brokerage firm, and phone number) is captured as part of the registration process and is already filled in on the screen when a user creates a new notice.

Once signed into the service, users can:

• Create and transmit a notice or retransmit a notice to another counterparty
• View notices they have received or sent
• Cancel a notice within specified time parameters
• Search for active or archived notices using specific field criteria
• Accept or reject a non-CNS buy-in intent or retransmittal or MSRB closeout (feature available in 2006)
• Update a buy-in including: Changing any field in a CNS buy-in notice up until specified time parameters, changing the delivery date for non-CNS buy-ins or MSRB closeouts, and changing the quantity or amount for a non-CNS buy-in

Creating a notice

SMART/Track consolidates the number of PEX screens used to create and transmit or retransmit buy-in notices. Users can create and transmit the following buy-in notices:

• CNS Intent
• CNS Order
• CNS Retransmittal (pending SEC approval)
• CNS Execution
• Non-CNS Intent
• Non-CNS Retransmittal
• MSRB Closeout

The user's contact information is automatically filled in on the input screen. Users can then fill in the remaining fields detailing their buy-in information and submit the notice to the system. SMART/Track has links to DTC's dividend and reorganization systems and will indicate on the screen if the security is pending a dividend or reorganization. SMART/Track will also indicate on the input screen if the security has been chilled for delivery. Most of the input screens have a free-form field for adding comments or notes to the notice.

SMART/Track for Buy-Ins reviews the data to ensure it is complete and then forwards it to the counterparty indicated.

Responding to a notice

Participants receiving a non-CNS buy in notice or MSRB closeout can either accept or reject the notice. If rejecting a notice, the participant must enter a reason for the reject by selecting a reason from the drop-down box or entering text in the comment box.

Updating a notice

The participant initiating a buy-in notice can update a notice. For CNS notices, a participant can change any of the fields up until the notice is sent to CNS. For non-CNS and MSRB closeout notices, participants can extend the delivery date or change the quantity or amount. Updating a non-CNS or MSRB closeout notice changes the status of the notice to pending.

Canceling a notice

Participants initiating a buy-in notice can also cancel the notice. For CNS notices, a participant can cancel the notice up until the notice is sent to CNS. For non-CNS and MSRB closeout notices, participants can cancel a notice in any status—pending, accepted, or rejected—and the status changes to "canceled."

Viewing a notice

The status of all notices can be viewed, and all notices can be searched or sorted using specific field criteria as desired by the user. Participants can view a list of notices that they sent or received as well as the details of specific notices, including the history of each notice with the details of when the action was taken, the date and time that action was taken, and the person that took the action.

Searching for an active or archived notice

Participants can search for active or archived notices within a specific date range. This includes the ability to search for all notices within that range or to search by notice type. Participants can further search within notice type by specific data fields including the execution date, settlement date, CUSIP or symbol, or counterparty. Archived notices are kept for seven years.

Disclaimer:

The purpose of the help screens in the SMART/Track for Buy-ins application is to familiarize The Depository Trust Company (“DTC”) Participants with SMART/Track for Buy-ins functionality. Participants should refer to the Rules of DTC and other applicable Self-Regulatory Organizations for the legal obligations of all parties concerned. The help screens are not intended to serve as a legal document. No statement in the help screens should be construed as a legally binding rule or regulation or as creating an obligation on the part of DTC, NSCC or any person.

For more information:

Please call Relationship Management at 1 888.382.2721.