Protecting Our Members The Lehman Bankruptcy Thomas Quaranta, senior relatiollSiJip mal/agel; ReiarioliShip Mallagemellt, alld Elena Staloff, vice presidem, Cleal'flllce alld Settieme!ltlEquities

Tuesday, September 9 1,'/l/lIdll I1mri",;:" / 11(, I'/,l("ri Oil

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12 I DT CC 2008 The Leilrn;ul ilankr uprcy

Lehman Bankruptcy Time/ine

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John Petrofsky, associaTe COl/wei. Gel/em! COl/llse/'s Office

he firsr rime OTCC dealr

wirh rhe possible bankruprcy of a majo r firm like Lehman Brorhers, ir " )) was a ga me - a war game.

Ir was, in fact, a risk-management exercise DTCC went rhrough in

June 2008. T he idea was to give execurives and staff a real-rime scenario

o f whar they mi ghr face if o ne of Wa ll Srree r's la rges r in vesrm ent

banks - and one ofOTCC's largest customers - suddenly went belly up.

T he next time OTCC dealt with the bankruptcy of Lehman

Bro thers, three mo nths later, it was profoundly real - and the beginning

of a quick-moving crisis.

Lehman was one of the nation's most powerful fin ancial insti tutions

and among rhe world's five largest participants in rhe trillion-doll ar

markers fo r governm ent and mortgage-backed securiti es . Yet Lehman

Brothers Holdings, Inc. slid in to bankruptcy abruptly on M o nd ay,

Sepr. 15,2008, followed about a week later by the bankruptcy of its U.S.

brokerage subsidiary.

Sunday, September 1 4 IdIA', j(il' IdA-ml'I'1 o/I,.hlf/dll Ilm/i-' (1(111'11 (III ,~lIlIr/'/r I) I( ( . IS ,1111,1.,('(1 ,\lIw/'r), ("{'I"/IIII:~ /hril 1/1/ II rl'llljlkjlirlltiIiATII/,/q;

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Id'rlldll Utllli-',

Julie Krill, directOJ; ClearfiNce flild Settlement/Equities, find

Michael C, Bodson , executive mflnflging director;

Business Mflnflgement find Stmtegy

Irs collapse, the largest in U.S. history, lerr DTCC with a staggering

challenge: how to wind down the more than $500 billion in securities

trades rhat remained on the books of Lehman. One newspaper called it

"The Nightmare on Wall So·eer. "

'Nightmare' Scenario For DTCC and its subsidiaries, a nightmare was all too possible. After

all , as central counterparties, they had guaranteed completion of billions

of dollars worth of Lehman's trades. If rhey incurred substantial losses

when winding trades down, rhey would need to starr drawing on

clearing funds their customer-members maintain with them in case of

def.lults. Never in its 35-year histo ry had DTCC been fo rced to do this.

So What Happened? OTCC had begun stepping up its daily risk monitoring of Lehman's

trading acri vity some weeks earlier. Execurives from D TCC's risk

managemem and legal teams were also meeting with regularors during

this period, To prevem any exposure OTCC's deposirory, The Oeposirory

Trust Company (OTC) , might have ro a Lehman bankruptcy, OTC

sharply resrricred any debit Lehman Brothers, Inc. could incur at the

deposirory,

The Pre-Dawn Wait OTCC execurives had already gathered in their offices before dawn on

Monday, September 15, They knew an announcemenr was imminenr,

Lehman Brothers Holdings, Inc. was abour ro shock the world by

declaring bankruptcy, although the Lehman subsidiaries that were

members of OTCC were not covered by that declaration, When the

news hit, the markets wenr inro a near free falL Trading volume on U,S,

markets climbed ro a recotd that day, and then proceeded ro set more

records as the week wore on,

The next day, the bankruptcy court appoinred the SeCLlrities

Investor Protecrion Corporation (SIPC) trustee for Lehman Brothers,

Inc. OTCC's clearing subsidiaries had been accepting as many Lehman

trades as possible ro allow member-CLlsromers the opportunity ro take

advamage of their guaranrees ro see the trades through ro completion,

Over the weekend, Lehman agreed with OTCC's subsidiaries ro

conducr an orderly wind-down of any outstanding positions, and on

September 22, OTCC's subsidiaries advised their cusromers that they

would no longer accept any new Lehman trades,

Meanwhile, the British bank, Barclays, proposed ro spend $1.75

billion ro purchase certain assets of Lehman Brothers Holdings, Inc. 's

business, including, possibly, its brokerage arm, OTCC acted ro srop

transfers via ACATS, its auromated cusromer accounr transfer service,

ro avoid a severe liquidity demand at Lehman that could have reSLllted

in a default. That would have caused significanr legal issues before the

sale of assets ro Barclays could have been completed,

Heng Sun, directOl; Quantitative Risk, Risk Management, and Elke Jakubowski,

vice president, Clearance rind Settlement/Fixed Income

14 I DTCC 2008 I The LehlllJn Bankruptcv

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The Barclays Interlude

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O ver the long, hectic weekend of September 19-21 , Barclays' teams met

with OTCC executives ro review the Lehman assets OTCC was holding

in its deposirory and as collateral for trading positions, Finally, sometime

around 2 a,m, Monday, September 22, the bankruptcy judge overseeing

the Lehman case signed off on Barclays' asset purchase plan, And later

Monday morning, OTCC senr our formal notices ro cusromers that said

Lehman would begin an orderly wind-down of outstanding trades still on

the books at the clearing corporations, By September 24, that changed

ro a formal "cease ro act" order, and OTCC's subsidiaries rook over

responsibility for liquidating the positions,

But there would be more late-night meetings in the coming weeks,

especially for OTCC's O eriv/SERV unit, It would have ro help guide

the industry through several major credit evenrs in the global credit

default swap (CDS) market while simultaneously coping with media

reportS and market anxiety about the size of credit default swap payouts

due on Lehman conrracts,

Timothy Beckwith (left:),

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Catching a Break That Monday, however, DTCC caught a break. Its Fixed Income

Clearing Corporation (FlCC) already had plans to launch a new central

counterparty (CCP) that could net and guarantee trades in the

mortgage-backed securities market. Now execurives at a major securities

industry trade group, the Securities Industry and Financial Markets

Association, were on the phone exploring whether it would be possible

to kickstart the CCP right away in order to wind down Lehman's

forward mortgage-backed securities trades. "We were looking at

$329 billion in mortgage trades that had to be dealt with," said Murray

Pozmanter, DTCC managing director, Clearance and Settlement

Group. "Frankly, we were ready to look at anything that could work."

An hour later, Pozmanter and others listened to some 300 bro­

ker/dealers on a conference call. Rather than follow its standard trade­

by-trade wind-down procedure, the brokers asked if FlCC could try to

net out as many of the trades as possible through a central

counterparry approach,

The lights burned through the night in an all-hands-on-deck

exercise as more and more numbers were entered into spreadsheets. And

by the next day, some $300 billion in Lehman forward mortgage-

backed securities trades - or about 90% of the value outstanding - were

netted out. The securities industry heaved a collective sigh of relief.

Yet Lehman's book held close to $200 billion in other trades as

well - all of them guaranteed by DTCC companies, The trades

included $190 billion in government securities and repos, and another

$5.85 billion involving equities, municipal bonds and corporate debt.

National Securities Clearing Corporation (NSCC), which clears

and settles virtually all broker-to-broker trades in the U.S. in equiti es,

corporate bonds and municipal bonds, faced total exposure of

approximately $5,85 billion from Lehman Brothers at the time its

accollnts were closed, This sum included $3.8 billion in options

exe rcises and assignments from the Options Clearing Corporation,

which expired on Friday, September 19, and NSCC processed and

subsequently guaranteed. A portion of Lehman's obligations at NSCC

was also successfully resolved when DTCC's DTC subsidiary took the

lead in working with Lehman's pledgee bank to arrange for the release

of $1 ,9 billion in securities, which were used to satisfy open trades at

NSCC. As a result, NSCC did not need ro go ro the marketplace to

purchase securities fot these trades.

DTCC completed the largest close-out in

history - $500 billion - without any loss to our customers j clearing fund.

The Lehlll an Ban kruptcy I DTCC 2008 115

Liquidating Lehman's Portfolio At this point, OTCC hired an inves tmenr manager ro help in li quidating

positions held by OTCCs equity and fi xed income clearing corporations.

Neither the investment manager's identi ty no r OTCCs was disclosed so

they could operate in the markets with anonymi ty. The in ves tment

manager provided advice and helped determine the best strategy ro

hedge the porrfolios, minimize risk and conduct an orderly liquidat ion

without disrupting the markets.

By T hursday, September 24, the team was already beginning ro

hedge the outstanding trades. T he next day, OTC C locked down

Lehman's fi xed-income porrfolio and on Sa turday was able ro lock down

the po rtfo lio with equities and co rporate bonds. The rest of the wind­

down now began in earnest.

Mitigating Risk Overseas EuroCCP, a U. K. -based subsidia ry of OTCC that p rov ides

pan-European clearing and settlement services for multilateral trading

fac ilities, was in midstream of its initial business launch when it WJS

call ed o n ro close out tradin g pos itio ns fo r Lehman Bro thers

International (Europe) (LBIE). LBIE was placed inro administrati on o n

September 15, but EmoCC P continued ro settle as many of the open

pos itions as possible with LBI E's agent banks so it could deliver the

securities to other participants the SJ me day. LBT E had open trades in

12 markets and six currencies, rotaling almost €2 1 million. The nex t

day, EuroCCP ceased ro act for LBIE once it became clear that LBIE's

agent banks would no longe r be settling the remaining pos itions.

EuroCCP engaged a broker ro close out € 16 million in remaining

pos it ions. EuroCC P successfully completed its close-out of LBIE's open

pos itio ns without the need ro use EuroCCP's G uarantee Fund.

Rumor Mill on CDS Trades Continues to Spook Financial Markets Mea nwhil e, as uncerrainty and turmoil continued ro swirl through the

markets, OTCC acted ro minimize risk for its OTC deri vati ves

cusromers. It acted as early as September 15 ro srop the auro mated

central settlemenr of C OS payment obligations maintained in OTCCs

Trade Information Wa rehouse involving two Lehman subsidiaries,

LBI E and Lehman Brothers Special Financing, Inc. OTCC also ass isted

counterparri es in li sting and removing from the Warehouse more

than 300,000 C DS contracts that market parri cipants held with

Lehman. H owever, market anxiety continued ro grow, drive n in part

by speculation th at the C D S market had exposure of as much as

$400 b illio n fo r payments on a Lehman default.

Calming Public Fears Later that week, after discuss io ns with cusromers and the Federal

Rese rve Bank of New York, which was looking for ways ro help calm the

markets, O T CC disclosed publicly for the first time figures fro m its

Trade Inform ation Wa rehouse. OTCCs press release communicated

that the real size of obliga tions in the C DS market was closer ro

$6 billion, fa r less than many had speculated . Less than two weeks later,

OTCC was able ro provide instructions for the transfer - without

incidenr - of about $5.2 billio n in net funds amo ng the various

counterparries involved in the Lehman "credit event. "

At the same time, OTCCs O perations team was scrambling to

keep up with Federal Reserve initiatives ro unfreeze the commercial

paper market and obtain timely payments from key paying agents.

By O crober 13, OTCC was able ro liquidate the las t of Lehman's

mortgage-backed securities trades. It rook another week ro complete

liquidating the huge book of U.S. government securities trades

Lehman's collapse had left behind. And finally, at the end of Ocrober,

six weeks after the bankruptcy, the investment manager closed out the

las t of the equi ty and co rporate bond trades.

O utside of people in the fin ance wo rld and at the Federal Reserve,

few knew that OTCC had completed the largest close-out in the

hisro ry of U.S . financial markets. And it did so without touching any

lines of credit held by its subsidiaries - or any of the clearing funds

all customer-members are required to put up.

T he nightmare had been vanquished. 0

Wed nesday, September 24 j) f( C/,II(;/i.,jll·'> i/Olili"'{liolllli il.> IIIC1iII,,';~' dl .\'\(( • II( .(. ,ifill /) /( . 1/1.11 il I'd., (I',f"r/III d(1 (0"

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(Above) Kesavan Me non, mflllflgel; IIser flcceptflllce testing. Deriv/SER\/

(Left) Drew Saur, systems directOl; App/im/iolls DelJe/opmm/ fllld /V/tlilltl'l/flllct' (ADA1). II/formtltion Technology

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(Above, Left to right) Jeanne Potter, directOi; Finance; Marie Rey, managing director, (i'cclit and Mar/;?et Risk Management; Alan Bendel , application dCIJelopel; DeriviSERV tlild Albert Gambale, rl/al/agillg directOi; ADM Clearing and Risk

(Left) Maryana Smaga, control IInit lead, Deriv/SERV Opemtions

T he [,eh1111111 l) Ilnk rUplcv I DTCC 2008 I 17

Customer rating in

2008 from a customer

satisfaction survey,

conducted by an

independent research firm.

TIle Trade Irlforrnatioll Warell0llse Safely Navigates CDS Market rrilrougil StorlllV Waters

••• anagmg

one major bankruptcy and its impact on the credit default swap (CDS)

market would not necessarily cause alarm in the global financial system.

However, the reality of tackling eight credit events nearly simultaneously

this past fall worried market observers," said Peter Axilrod, managing

director, business development, DTCC. Against this backdrop,

market participants relied on DTCC's Trade Information Warehouse

(Warehouse) to help them navigate the stormy waters churned by a grow­

ing list of troubled financial institutions including Fannie Mae, Freddie

Mac, Lehman Brothers, Washington Mutual, Tembec Industries Inc., a

Canadian forest products company, and three Icelandic banks.

The Warehouse's robust infrastructure minimized the risk associated

with the turmoil in the financial markets. "Had the Warehouse's central

settlement capability and automated credit event processing service not

already been in place when these credit events took place, the burden of

calculating and managing the payouts on affected contracts would have

severely stressed participants in the OTC credit derivatives market," said

Axilrod.

DTCC's Warehouse eased the finance industry's concerns, providing

the only comprehensive global registry and automated processing infra­

structure for CDS transactions. "Because the Warehouse's central

settlement function nets payment obligations among counterparties

of a CDS contract, the total exposure of $285 billion in gross notional

value the market experienced from the eight credit events was signifi­

cantly reduced to a fraction of that amount, to approximately $12 bil­

lion in funds transfers from net sellers to net buyers of protection for

the CDS contracts written on the eight companies," said Frank De

Maria, managing director and chief operating officer, DTCC

Deriv/SERY.

As word spread on the actual size of the settlements, fears that the

ongoing string of credit events might destabilize the finances of those

firms trading in CDS instruments began to ebb.

Maintaining OTC Derivatives Contracts Throughout Their Life Cycle DTCC Deriv/SERV LLC, a wholly-owned subsidiary of DTCC,

launched the Warehouse in late 2006 in collaboration with market

participants. The aim was to address the industry's need to centralize

the maintenance and automated processing of OTC derivatives

contracts throughout their multi-year life cycle. At the end of 2008, the

Warehouse's global registry held a total of approximately 2.2 million

CDS contracts - which represents the vast majority of outstanding

contracts - with an aggregate gross notional value of approximately

$29.2 trillion.

DTCC enhanced the Warehouse's functionality in November 2007

by adding a central settlement solution for calculating, netting and issu­

ing payments between counterparties to bilateral CDS contracts. Central

settlement reduces the operating risks associated with the manual steps

that were traditionally used to process these payments. In 200S, the

Warehouse reduced 3.S2 million gross quarterly coupon payments valued

at US$169 billion gross to 2,200 net payments valued at US$9.S billion.

DTCC's central settlement service is provided in collaboration with CLS

Bank International.

Ensuring an Orderly Transfer In addition to its ability to process multiple credit events, the

Warehouse proved the value of its central registry when it took charge

of moving Bear Stearns' CDS deal book of open CDS contracts,

encompassing hundreds of thousands of trades, to JPMorgan Chase last

summer. Without the Warehouse's automated processing capability, the

transfer may have taken months. Instead, working with teams at many

of the affected counterparty firms, a staff of Deriv/SERV professionals

completed the majority of the swing over a 48-hour period during a

weekend in mid-July.

The 'Irade Warehouse I DTCC 2008 I 19

DTCC accomplished this by leveraging records already maintained

111 the Warehouse to streamline an otherwise lengthy confirmation

process required with the numerous counterparties affected by the transfer.

Because market participants were able to manage these novations, or

contract assignments, in synchronous bulk fashion, the process was

controlled and ownership of the transactions involved remained cer­

tain. This exercise has since proved to be a preview of similar initiatives

as the financial services industry goes through further consolidation.

Largest Community of Users In addition to the CDS contracts, Deriv/SERV also provides automated

matching and confirmation for a wide range ofOTC credit, equity and

interest rate derivatives. Deriv/SERV's customer base is the largest of

any post-trade processing service provider in the industry and includes

all major dealers and more than 1,200 buy-side firms in 35 countries.

In 2008, DTCC Deriv/SERV processed nearly 10.1 million OTC

derivatives transactions through its matching and confirmation service,

up 71 % from the 5.9 million transactions processed in 2007. Average

daily transaction volume in 2008 was approximately 39,000, up about

71 % from 23,000 in 2007. Market participants indicated in their

October 31 report to regulators on their progress to strengthen the

infrastructure for the OTC derivatives market that more than 95% of

CDS contracts are electronically processed through Deriv/SERV's

automated processing platform.

Creating an OTC Derivatives Processing Powerhouse In July, DTCC and Markit announced plans to form a new company that

would combine DTCC Deriv/SERV's trade matching and confirmation

service with Markit's confirmation and up-front work-flow processing

services for OTC derivatives, including Markitwire and Markit Trade

Manager. The new OTC derivatives processing powerhouse will deliver

increased operational efficiency and certainty to the market by providing

a unified gateway for confirming OTC derivative transactions globally

across all asset classes. The strategic partnership also responds to customer

demand for a more secure, reliable and streamlined operational

environment. While Deriv/SERV's matching and confirmation engine

will become a part of the new company, the Warehouse will remain

part of DTCC.

Gearing Up for 2009 "As the market turbulence of 2008 spills into 2009, the Warehouse

continues its critical role in bringing greater transparency, efficiency and

certainty to the OTC derivatives market. DTCC is already gearing up

to manage processing the 12 credit events and bankruptcies that have

been declared since the beginning of the year," said Axilrod.

In addition, as global regulators and OTC derivatives market

participams worldwide focus on establishing a central counterparty

(CCP) for CDS transactions, DTCC is already collaborating with all

proposed CCP solutions to facilitate links to the data managed in the

Warehouse's global registry as they move towards providing the trade

guarantee services now being called for in the market. D

The Trade Information Warehouse, a

global registry for CDS transactions,

minimized risk associated

with eight major credit events.

20 DTCC 2008 I The Trade Warehouse

DrI'CC Is Expanding Global Services

Deri,/SEHV CII~tolller~ (number [It year end)

1.078

04 05 06 07 08

22 I DTC:C: 200S Global Services

Dt'ri,,/SEHV TraJl~at'lioll~ pl"(H'l'~~l'd

(in thousands) 1 fUJ72

),876

2,6.l l

2,) 1 \)44

04 05 06 07 08

Tota l Volume

s markets expand, cusro mers

wanr a broader range of in vestmenr servicing solutions that can reach

beyond geographical borders , yet are still refl ective of local markets -

operated at-cost and owned, guided , developed and governed by the

firms th at are its primary users. At OTCC. 2008 saw the launch of new

services ro meet their needs.

The global syndicated loan market exceeded US$2. 1 trillion through

the third quarrer of 2008, even as deal volumes slowed after yea rs of

double-digit growth. To conri nue ro grow this market and boost

effi ciencies for cusromers, OTCC created two new services ro help

auromate and streamline syndicated commercial loan processing.

"Today, loan processes are essentially manual, with information

faxed between market participanrs," said C hris Childs, DTCC vice

presidenr, G lobal Loans Product Management. "In the same mann er as

we did with Oeri v/SERV in the OTC deri vatives market, we want the

new Loa n/SERV products ro deli ver a broad range of auromated and

va lue-added services that will work in Europe, North and Latin

Ameri ca, Asia and o ther markets."

Syndi cated loans are co mplicated structures involving multiple

lend ers for each borrower, with an agent bank act ing as the liaiso n,

transmitting information back and forth among pa rti es . The

Loa n/SERV Reco nciliation Service, launched in 2008, enables agent

banks and lenders ro view and reconcile their loan positions dail y. T he

co mplementary Loan/SE RV Messaging Service, piloted in late 2008,

prov id es a sa re, secure, auromated netwo rk for the transmission, receipt

and online sto rage of industry sta ndard loan messages.

With the success of th e OTCC Oeri v/SERV platform providing a

secure, reliable and strea mlined operational environment for matching

and confirmation for a wide range of OTC deri va tives products, OTCC

looked in 2008 to collaborate with another industry leader ro expand

th e reach of this market. Expected ro launch in 2009, this new

co mbined co mpany will lin k th e front- and middle-office trade processing

se rvi ces o f Markit, a U.K.-based fi nancial information services

company, with Ocriv/SERV's back-offi ce post-trade confirmatio n and

matching se rvi ces . This coll aborat ion wi ll all ow buys ide and sel l-side

G lobal Services I OTCC 200R I 23

OTC derivari ve marker parrici panrs ro confirm rrades, while ar the same

rime, gain access rhrough a common portal to addirional services

provided by rhe parenr companies.

In May 2008, DTCC received approval from rhe U.S. Securiri es and

Exchange Commi ss ion (SEC) ro launch rhe new Alrernarive

r nvesrmenr Producr (AlP) suire of services. AlP links global marker

participanrs, including broker/dealers, cusrodians, alrernarive fund

managers and hedge fund administrarors. The service provides end-ro­

end process ing of in vesro r-Ievel transacrions for alrernarive in vestmenrs,

such as hedge funds, funds of fund s, privare equity, real esrare

investmenr trusrs and limired partnerships.

Processing alrernari ve invesrmenrs is currently handled manually,

using hard-copy documenrs, fax, email , phone calls and spreadsheers.

AI P inrroduces a srandardized communica rion s formar and an

auromated cenrral infras rructure inro rhe alrernatives market.

"AlP effect ively addresses many of the costly and risk- prone aspecrs

of processing rh ese securiries," said Ann Bergin, managing direcro r,

DTCC Wealrh Managemenr Services. "In much the same way thar

Fund/SERV"~ sysrem revolutionized how mutual fund orders were

processed and settled more than 20 yea rs ago, we believe AlP will

similarly transfo rm the global alternarive and direct invesrm enr

indusrry." By year-end, rhe firsr two charrer clienrs, BNY Mellon

Shareowner Services and Pershing LLC a subsidiary of The Bank of

New York Mellon Corporarion, went live.

DTCC also received permission from the SEC in 2008 ro ad mir non­

U.S. fin ancial companies as full members ro NSCC and DTC. In December, the company fil ed ro bring non-U.S. firms inro both rhe

morrgage-backed and government securities di visions of FlCC as full

members , and has since fil ed ro expand membership opportuniries for

buys ide firm s, including mutual funds and hedge fund s. Alrhough

many non-U.S. fin ancial firm s are major participants in rhe various

U.S. securiries markers, previously only firm s wirh U.S. branches or

agencies were eligible for direcr mem bership in DTCCs subsidiaries.

Permining non-U.S. financial companies ro clear and ser tle rheir

rrades direcrly in U.S. markets leaves those firm s ben er positioned ro

take advantage of the risk management, balance-sheet netting and cosr

savings rhat direcr membership provides.

"S ince rhe bankruprcy of Lehman Brorhers, hedge funds and orher

buyside firms have been looking more closely ar how rhey can mitigate risk

rhrough DTCCs va rious cenrral counrerparries" said Michael Bodson,

DTCC executive managing direcror, Business Managemenr and Srraregy.

DTCC is one of the few organizations in rhe world rhat offers broad,

global coverage of corporare acrions. With operations in New York,

London and Shanghai, rhe Global Corporate Action (GCA) Validarion

Se rvice "follows rhe sun ," providing 'round-rhe-clock coverage.

The GCA Validarion Service - one of OTCC's mosr highly rated

producrs and services, wirh 92% overall sarisfacrion among cusromers -

24 I DTCC 2008 I Global Se rvices

currently tracks more than 2 million securities in 160 countries, in 16

languages, providing informarion on corporare acrions announcements.

In 2008, th e service provided more rhan 1 million corporare acrion

announcements and more than 3 million announcements of scheduled

payments on fi xed income instruments. T his yea r, enhancements ro the

service included es tablishing new intraday feeds abour corporare acrions

fi'om OTC, as well as suppl ementing the ex ist ing secondary sources of

data wirh informarion from some 18 newswires from around the world.

DTCC co nrinued ro wo rk this year wirh formal standards bodies and

industry associations ro promore industry standards. OTCC collaborated

wirh SWIFT on global message srandards and rhe new AlP service suire

will soon accept ISO 20022-compliant, XML formats. OTCC has

also adopted FpM L';J (Financial producrs Markup Language) in the new

Loan/SE RV Messaging Service.

Ouring 2008, OTCC worked closely wirh Japanese and Brazilian

coll eagues on organizing a "CCP 12" summit in Tok),o, where 30 cenrral

counterparries from around rhe wo rld compared notes on global issues.

OTCC also srrengrhened relations with global counrerparrs who are

members of the Americas' Central Securities Oeposirory Associarion

(ACSOA) and where Mary Ann Callahan, managing direcror, OTCC

Global Relarions and Oevelopmenr, was re-e1ected president of ACSDA

ea rly in 2009. Lasrly, OTCC hosred irs firsr G lobal Relations Exchange

and Training (GREAT) workshop, fosrering cross-border collaboration

on key trends shaping operarions practices in roday's capital markets. 0