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DTCC Significantly Increases Securities Covered by Global Corporate Action Validation Service

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The Depository Trust & Clearing Corporation (DTCC) announced today that it has significantly increased the number of securities in its coverage of corporate actions announced through its Global Corporate Action Validation Service (GCA VS).

The GCA VS, a service of DTCC Solutions LLC, provides the largest centralised source of “scrubbed” corporate action announcement information for an array of securities from 160 countries worldwide. The data is used by brokerage firms, banks, hedge funds and others in both their front offices for trading and in their back offices to ensure accuracy of their processing of the corporate action events. GCA VS ensures the highest quality corporate action information through a comprehensive cleansing process which comprises data mapping, data normalisation, consolidation and verification and is designed to help customer firms manage the risks associated with processing corporate actions from around the world. DTCC Solutions is a subsidiary of DTCC.

The significantly expanded coverage was introduced following customer surveys and meetings that indicated firms wanted GCA VS to provide coverage of these additional securities, which includes structured securities issued and maintained by the Federal Reserve Bank, as well as scheduled payments on global fixed income securities and Unit Trusts.

Until this most recent enhancement, GCA VS provided corporate action announcements on more than 2 million securities to customer firms who use the service. GCA VS also provided coverage of interest, maturities and principal payments on structured securities that are eligible for custody and processing by The Depository Trust Company, a DTCC subsidiary. It also provided scheduled payment announcement for non-structured, fixed income securities that were DTC-eligible. In 2009, that meant that GCA VS put out almost 6 million announcements on DTC-eligible fixed income securities’ scheduled payments, in addition to the 990,000 corporate action announcements on global equities and other securities, or an average of more than 27,000 announcements every business day.

In the latest enhancement, GCA VS added the ability to obtain information on scheduled payments on all structured securities held by the Federal Reserve Bank. That information will be made available to GCA VS customers on about 2.4 million bonds held by the Fed, although some of those are already covered by GCA VS from other sources. These structured securities principally involve securities created by Fannie Mae and Freddie Mac.

In addition, GCA VS also added scheduled interest payment and maturity data on a large number of fixed income securities that are not currently DTC-eligible from around the globe. According to Chris Childs, vice president, DTCC Asset Services, GCA VS will pass through vendor data on these securities without validation, much as GCA VS does now with scheduled payments on DTC-eligible securities. DTCC Solutions also added the ability to get scheduled payments data on Unit Trusts in mid-May.

“These new enhancements demonstrate DTCC’s commitment to providing the widest range of corporate action data on the most securities by any organisation, anywhere,” said Childs. “As the volume of corporate actions globally continues to increase, we find having corporate actions information, even information as generally static as scheduled payments for fixed income securities, to be more and more in demand, not just in the U.S. but everywhere. And as we find new sources for data at less cost, we can help cut the fees firms pay for vendor information they get through GCA VS.”

As of the end of 2009, GCA VS had 43 customer firms globally who were taking data feeds. DTCC Solutions also has connections to more than 165 custodian banks globally. Many firms want to compare data feeds from their custodian banks to the GCA VS data. GCA VS provides an optional “custodian check service” that allows firms to take both sets of data in the same format. It also gives clients the ability to see how the interpretation of their custodian compares to the validated, composite data record that GCA VS provides.

Any organisation interested in corporate actions information globally is eligible to sign up to receive GCA VS data. The data files can be sent via a mainframe computer-to-computer interface, or data can be received through the GCA VS browser service, using direct inquiries of the database. According to Childs, firms receiving full data files will now have four options related to scheduled payments data in the enhancements: they can take no scheduled payments data, they can take only the DTC-eligible securities data; they can take only the non-DTC-eligible securities data, or they can take all scheduled payments data available.

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