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Feb 19, 2013 • Press Releases

DTCC Begins Electronic Testing of ISO 20022 Messages for Distribution Event Types

New York, February 19, 2013 – The Depository Trust & Clearing Corporation (DTCC) today announced that its corporate actions pilot program has begun systemic client testing of ISO 20022 messages covering the full entitlement and allocation lifecycle for distribution events.

The pilot for distribution events, launched in September 2012, is part of DTCC’s multi-year corporate actions reengineering initiative that will replace DTCC’s proprietary files with ISO 20022 messages. For the first several months of the pilot, DTCC produced sample ISO 20022 distribution messages, enabling clients to understand and validate the message formats and business flows.

Beginning today, DTCC, through its subsidiary The Depository Trust Company (DTC), will start a parallel production test period by sending data systemically to pilot firms. This will allow them to advance their testing of these message types.

“This represents a major development in our corporate actions reengineering initiative since it’s the first time that we – or anyone for that matter – are generating ISO 20022 messages electronically for entitlements and allocations,” said Daniel Thieke, DTCC managing director, Asset Services. “Couple that with our pilot firms beginning to test instruction messages by sending them to DTCC electronically later this year, and you’ll understand what a giant step forward this is for corporate actions processing in the U.S. Ultimately, this phase moves DTCC a step closer to retiring its proprietary files, as all legacy formats for distribution event types will now have an ISO 20022 message equivalent.”

DTCC successfully completed a pilot program in 2011 during which it distributed corporate action announcement messages in ISO 20022 format. These messages cover all events .including maturities, tender offers, dividends and stock splits. DTCC implemented the ISO 20022 announcement messages in November 2011 and continues to onboard clients who are adopting the new ISO 20022 format. To date, DTCC has sent out more than 30 million announcement messages in ISO 20022 form since implementation.

The pilot for distribution events will run through Q2 2014, when the lifecycle ISO 20022 messaging testing will coincide with a mandatory conversion of all DTC clients from the legacy Participant Terminal System (PTS) and Participant Browser System (PBS) to the new browser-based user interface. “We need a lengthy pilot for distribution messages because they require extensive testing due to the fact that each customer will receive unique messages based on their respective holdings,” said Thieke. “In addition, as we automate the elective dividend process to allow for ISO 20022 instructions, a new process is being introduced to DTCC and the industry. Clients will benefit from the browser’s enhanced functionality which will boost operational efficiencies and allow users to manage all distribution events -- from announcement to entitlement, through instruction and allocation -- in one platform.”

About DTCC

Through multiple operating facilities and data centers around the world, DTCC and its subsidiary companies automate, centralize, and standardize the processing of financial transactions for thousands of institutions worldwide. With 40 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry, simplifying the complexities of clearance, settlement, asset servicing, global data management and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, derivatives, money market instruments, syndicated loans, mutual funds, alternative investment products, and insurance transactions. In 2011, DTCC’s subsidiaries processed securities transactions valued at approximately US$1.7 quadrillion. Its depository provides custody and asset servicing for securities issues from 122 countries and territories valued at US$39.5 trillion. DTCC’s global OTC derivatives trade repositories record more than US$500 trillion in gross notional value of transactions made worldwide across multiple asset classes.

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For Release: Immediately

Edward C. Kelleher