reengineering - depository trust & clearing corporation/media/files/downloads/issues/corporate...

the Depository trust & Clearing Corporation

[ ] Corporate aCtions reengineering

DtCC [ Corporate aCtions reengineering ]

[ 1 ]

aCCurate processing and delivery of corporate

actions has never been more important,

and the push from the global markets for greater efficiencies,

straight-through processing and further risk mitigation cannot be

ignored. This dynamic, combined with the advent of technological

advances and global messaging standards, has created an opportunity

for yet another game-changer from DTCC.

Today, the crucial job of corporate actions processing is shared by

more than 60 DTC systems — each with its own distinct messaging

and file formats. While these systems have proven to be accurate and

reliable, the time is right to upgrade and prepare for the operational

challenges the future is sure to present.

for Corporate aCtions proCessingMoving

towarD a new stanDarD…


Replacing or upgrading over 60 legacy systems with one simple, streamlined standard was a formidable task only one industry leader could tackle. And in a sweeping multi-year initiative, DTCC spearheaded a new paradigm solution.

At its core is a new global messaging standard called ISO 20022, a breakthrough that will send the

parade of formats, proprietary codes and manual methods into retirement.

ISO 20022 captures business transactions and associated message flows by speaking to the financial industry in one common language, which DTCC will implement for the entire corporate actions lifecycle—from announcements through instructions and payments.

Now, each event will consist of a single announcement containing multiple options per event rather than multiple function codes to account for a single event. And the boost you’ll get from enhanced straight-through processing, as well as real-time message delivery, means you can get corporate actions to your shareholders faster than ever before.

an unpreCeDenteD solution, engineereD froM the grounD up

[ 2 ] [ 3 ]

DTCC is the world’s first company to integrate ISO 20022 messaging for corporate actions, and the advantages over existing DTC CCF formats are substantial.

From day one, your dividend distributions, redemptions and reorganizations use the same ISO taxonomy. So you can create a single, streamlined process around all incoming data from DTC. It’s

a refreshing difference that you’ll appreciate. Because eliminating the need to manage multiple systems and formats means an immediate reduction in costs and risk.

Messaging MaDe siMple. iMagine that.

Other benefits of integrating ISO 20022 into corporate actions include:

• Event-based structure represents a holistic event view — you see it as a single event with multiple options instead of today’s multiple activity/function codes

• Event structure of message data aligns with your view in the new browser-based user interface

• Ability to send automated instructions and elections via ISO 20022 messaging

• Allows for market/issuer data elements, as well as DTC custodian- specific data elements with the use of “extensions”

• More frequent announcement updates and access to messages – near real-time delivery throughout the business day versus end-of-day batch CCF files

• More data elements available than via CCF files

• Greater cross-coverage of events spanning different event types

• Flexibility for future changes and additions to data elements and events

•Easier integration with other data providers (e.g., custodians) since this will be an industry standard

•Access to global events coverage via the GCA VS product (at additional cost)

[ for aDDitional inforMation on iso 20022, please visit www.iso.org anD www.iso20022.org ]

To meet your needs today and well into the future, our goal at DTCC has been to collaborate with end-users so they can provide feedback at each step of product development.

For example, the new ISO messaging standard was developed in a pilot program using the input of leading corporate actions users. All event types for corporate actions

announcements were thoroughly tested, and by November of 2011, ISO 20022 was put into production as users conducted parallel testing.

we MaDe users like you a big part of the aCtion.


[ 5 ][ 4 ]


To complement our groundbreaking messaging system, we’ve rolled out a sleek, intuitive, web-based interface. With the feedback of users like you,

we’ve developed a robust array of features that allow you to see the entire picture in one place, on your terms. These new features

will help you transform your workflow into a simpler and more manageable process.

welCoMe to the next big step: a sMart, easy-to-navigate, web-baseD interfaCe.

From the moment you log on, you have the ability to view the most vital information all in one place, exactly how you want, through user-selected dashboards for distributions, redemptions and reorganizations. You’re sure to appreciate this organized, simplified “hub,” which replaces the piecemeal view of corporate actions you’re accustomed to seeing.

This breakthrough gives you the power to manage the entire lifecycle of your corporate actions events — from announcements through instructions to allocations – from anywhere there’s an internet connection.

Just log on, click on “Customize Dashboard” on the top of any dashboard page, and select feature sections for your dashboards. Want

to adjust your view to see everything, or just a subset? Simply move the sections around on-screen to give prominence to whatever’s most important to you. Best of all, you can do it all without ever having to leave the system.

get reaDy to streaMline your Corporate aCtions experienCe.

Other notable benefits you’ll value every day include the ability to:

• Manage your work queue by having events requiring action identified for you

• View template-style event text information in sections, which alleviates the need to scrub and manually retype event information into your own systems

• View every announcement as a single event with multiple options, instead of having to wade through individual announcements for every option within an event

• View basic security reference data at once, rather than using multiple functions

• View announcements for global events (at additional cost)

• Customize screens and information

• Import from and export to Excel

• Perform highly robust and flexible searches for events

• Save and perform “favorite” searches with a click, without reselecting each search criterion

• Submit WINS inquiries straight from the application without having to log in to a separate system

• Easily switch between your DTC account numbers (if applicable) without relogging in

the tiMe for aCtion

is now.Converting to DTCC’s reengineered corporate actions messaging platform will give you the ability to manage your entire corporate actions workload in one integrated, easy-to-navigate system. It will automate and streamline your current processes. Dramatically boost efficiencies. And most importantly, reduce your costs and risk immediately.

For now, adopting the ISO 20022 data model is a voluntary change. However, all proprietary formats will be permanently

phased out as this system becomes the industry standard.

Since this transition will take some effort on your part and can’t be done overnight, contacting us soon is important. We’ll discuss whether you need to upgrade your network bandwidth to handle increased capacity, as well as your preferred choice of connectivity — SMART or SWIFT — to DTCC. Contacting us early is also your best chance at providing the feedback that can improve your experience moving forward.

www.dtcc.comthis description is for informational purposes only. this service is governed by applicable rules, procedures, and services guide for each DtCC subsidiary, which contain the full terms, conditions, and limitations applicable to this service. We may provide you with additional information about our products and services from time to time. if at any time you wish to be removed from our distribution list, please send an email to [email protected].

June 2012

to learn More about [ Corporate aCtions reengineering ] or to sign up for the pilot prograM, ContaCt: • Joyce rosen: [ [email protected], 212.855.3935 ] • your DtCC relationship Manager • Corporate actions reengineering Mailbox: [ [email protected] ]

DTCC’s Corporate Action reengineering project will transform how DTCC processes and communicates with its Participants and

clients across the whole corporate actions lifecycle, from announcement through to payment.

This new user interface will ultimately replace our Participant Terminal System (PTS) and

Participant Browser Service (PBS) for all corporate actions announcements and processing.

The multi-year reengineering project will upgrade and replace many of the legacy systems

that currently support corporate actions processing at DTCC through a phased approach.

This kit is designed to get you started readying your firm to implement DTCC’s

Reengineered ISO 20022 Corporate Actions Messaging Application, which includes DTCC’s

new Corporate Actions Browser and ISO 20022 messaging.

GETTING STARTED• Contact the CA Reengineering Product

Management Team at CAReengineering@

dtcc.com to schedule an introductory

webinar

• Review the enclosed Client Readiness

Checklist for a road map of tasks

involved in moving to this new platform

• Review the enclosed “Product Migration

Guide for Adoption of ISO 20022

Messaging”

• Review “Choosing a Communications

Network” information sheet and

assemble a team to address this

important decision

• Assemble a team to work on mapping

from DTCC’s legacy data files to the

ISO 20022 standard

• Take a look at our reengineering

website at www.dtcc.com/

reengineering and avail yourself of

the wealth of information there:

• specifications

• documentation

• webcasts

We at DTCC look forward to working with your team on this important initiative. Please

contact us for any assistance you may need.

Joyce Rosen Lorraine OlerReengineering Product Management Relationship Management – Asset [email protected] [email protected] 855 3935 212 855 4186

Tom AmendolaGCA Relationship [email protected] 855 1240

THE DEPOSITORY TRUST & CLEARING CORPORATION

CORPORATE ACTIONS ONBOARDING KIT

This document is being made available by DTCC for information purposes only. Please refer to the Corporate Actions Reengineering technical documentation section of www.dtcc.com/careengineering for further information.

The reengineering project will introduce the new ISO messaging. Messages will be transported using one of two networks,

with the following protocols:

SMART (DTCC Proprietary Network) • MQ

• NDM

• File

SMARTCustomersconsideringusingtheSMART

networkshouldcontacttheirDTCC

RelationshipManagertodetermineif

theyhaveaSMARTcircuitcurrentlyin

place.Ifso,DTCCwillperformbandwidth

utilizationstudiesonthecurrentlines

todetermineifanupgradetoalarger

circuitisnecessary.Thereisnocostfor

transmittingmessagesviaSMART,but

customersdohavetopayforthecircuit

THe DePOSITORy TRuST & CleARINg CORPORATION

CHOOSINg A COMMuNICATIONS NeTwORk

SwIFT• InterActStoreandForward

• FileAct

Ultimately,thesecommunicationmethodswillallowDTCCclientstobenefitfrom:

• Increasedavailabilityandtimelinessforcorporateactionsdata:Customerswill

benefitfromtheenhancedprocessingenginethatallowsforcorporateaction

messagestobeupdatedandpublishedthroughouttheday.Updateswillbeapplied

toexistingeventsatintervalsfordissemination.

• Subscriptions:Subscriptionoptionsexistforeightdifferenteventgroups,enabling

participantstochoosetoreceivemessagesintra-dayorend-of-dayusingvarious

messageprotocols,dependingontheurgencyoftheevent.

itself.Pricing–whichisadirectpass-

throughfromthetelephonecompany

servicingtheline–isfixedbasedon

circuitsize.

SwIFTCustomersconsideringtheSWIFT

networkshouldcontacttheirSWIFT

RelationshipManagerforprovisioning

andpricingdetails.

ThisdocumentisbeingmadeavailablebyDTCCforinformationpurposesonly.PleaserefertotheCorporateActionsReengineeringtechnicaldocumentationsectionofwww.dtcc.com/careengineeringforfurtherinformation.

DTCC ISO 20022 MESSAGES AND NEW USER INTERFACE

ClIENT READINESS ChECklIST

This Readiness Checklist is intended to provide an outline for the steps a firm should take in reviewing, building and implementing the Reengineered ISO 20022 Corporate Actions Messaging Application, which includes DTCC’s new Corporate Actions browser and ISO 20022 messaging. This checklist serves as a guide, and while some steps may be extraneous to specific firms, additional steps may be required based on the needs of certain clients.

Connectivity and technical specifications at each firm will guide the discussions and be used to determine which steps are required.

Any additional questions or required customization to the implementation process should be reviewed with a member of the CA Reengineering Product Management Team and can be emailed to [email protected].

DTCC ISO 20022 Messages and New User Interface Client Readiness Checklist

Action Item Lead Status CommentsStart End Client Firm DTCC Contact

1 Planning/ Readiness1.1 Initial project discussions DTCC1.2 Review CA Reengineering Product Migration Guide Client Firm

1.3Deep dive planning session including scenarios, new data model, mapping, roadmap and goals DTCC

1.4 Project introduction webinar DTCC

1.5

Determine connectivity method of choice SMART (MQ, FTP or NDM) or SWIFT (InterAct Store and Forward or FileAct) Client Firm

1.6 Determine desired subscription options Client Firm1.7 Determine and agree upon testing scope Client Firm

1.8Client firm planning for technical support in internal parallel test environment Client Firm

1.9 Identify users to have browser access Client Firm

1.10Identify users to have access to WINS, the online inquiry management system Client Firm

1.11 Establish monthly/weekly planning meetings Client / DTCC1.12 Follow up meetings on open questions Client Firm1.13 Establish governance / issues tracking mechanism DTCC

2 Connectivity/Access2.1 SMART network utilization study DTCC2.2 SMART circuit upgrade (if applicable) Client Firm2.3 Questionnaire for SMART connectivity (if applicable) Client / DTCC2.4 Firewall request as applicable Client / DTCC

2.5Establish SMART/SWIFT connectivity link for ISO messages Client / DTCC

2.6Subscription access -- network protocols for intraday and end of day messaging Client / DTCC

2.7 Successful transmission of ISO messages Client / DTCC2.8 Browser access Client / DTCC2.9 Applicable browser entitlements access Client / DTCC

2.10 Confirm WINS Access Client/DTCC3 Training

3.1View webcast "Moving Toward the ISO 20022 Standard" Client Firm

3.2 UI live browser demo DTCC3.3 UI browser e-learning modules & webcast Client Firm

4 Mapping

4.1For each event type identify data elements currently being used from the CCF files Client Firm

4.2Identify the currently used data elements in the new data model using Data Modeling documentation Client Firm

4.3Identify desired events & phasing of events (using scenarios documentation) Client Firm

4.4Identify internal programs/processes that take in CCF files/data and will require modification Client Firm

4.5Identify any new additional desired data elements available in ISO 20022 Client Firm

4.6DTC to supply test data / sample messages via email DTCC

4.7 Annual November ISO Standards Release Client Firm5 System development

5.1 Client internal system development Client Firm

Time Frame Owner

DTCC ISO 20022 Messages and New User Interface Client Readiness Checklist

Action Item Lead Status CommentsTime Frame Owner6 Testing

6.1 ISO 20022 Messages

6.2Client firms receive ISO 20022 messages from DTC production environment DTCC

6.3 Clients route messages into their test region Client Firm6.4 Internal system testing / regression, downstream Client Firm6.5 Parallel CCF files / ISO 20022 testing Client Firm6.6 Parallel ISO 20022 / UI testing Client Firm6.7 Testing results Client Firm6.8 UI Browser6.9 Parallel legacy systems / new user interface testing Client Firm

6.10 Testing results Client Firm7 Ongoing discussions & next steps

DTCC CorporaTe aCTions

proDUCT MiGraTion GUiDe For aDopTion oF iso 20022 MessaGinG

VERSION 3.4Updated February 2012

Note: This document was previously titled “DTCC Corporate Actions Reengineering Documentation Guide

This document is being made available by DTCC for information purposes only. Please refer to the Corporate Actions Reengineering technical documentation section of www.dtcc.com/careengineering for further information.

DTCC Non-Confidential (White)

Table of Contents

1 INTRODUCTION ............................................................................................................................................... 3

1.1 BACKGROUND .......................................................................................................................................................3 1.2 MARKET COMMUNICATION .....................................................................................................................................4 1.3 ISO 20022 BENEFITS.............................................................................................................................................5

2 KEY CONCEPTS................................................................................................................................................. 7

2.1 ISO 20022 ..........................................................................................................................................................7 2.2 CORPORATE ACTIONS DATA MODEL..........................................................................................................................7 2.3 CSD (DTCC) AND MARKET (ISSUER) DATA ..............................................................................................................13 2.4 MESSAGE STRUCTURE...........................................................................................................................................16 2.5 ISO 20022 MESSAGE DELIVERY AND NETWORK PROTOCOLS.......................................................................................20

3 DTC SERVICES ................................................................................................................................................ 25

3.1 DTC -‐ CANADIAN DOLLAR SETTLEMENT ...................................................................................................................25 3.2 FOREIGN TAX SERVICES .........................................................................................................................................25 3.3 FOREIGN CURRENCY PAYMENTS (FCP) ....................................................................................................................26 3.4 DRIP PROGRAM..................................................................................................................................................26

4 DOCUMENTATION GUIDE.............................................................................................................................. 27

4.1 SUPPORTING DOCUMENTATION..............................................................................................................................27 4.2 CORPORATE ACTIONS EVENTS DICTIONARY ...............................................................................................................27 4.3 CORPORATE ACTIONS EVENT SCENARIOS ..................................................................................................................28 4.4 DEFAULT OPTION.................................................................................................................................................30 4.5 CORPORATE ACTION DATA ELEMENTS DICTIONARY ....................................................................................................31 4.6 LEGACY MAPPING SPREADSHEET.............................................................................................................................32 4.7 MESSAGE IMPLEMENTATION GUIDE (MIG) ..............................................................................................................32 4.8 MESSAGE DEFINITION REPORT (MDR) ....................................................................................................................34 4.9 HOW TO USE SUPPORTING DOCUMENTATION ...........................................................................................................34

5 ONBOARDING: HOW TO GET STARTED .......................................................................................................... 37

5.1 CONTACT INFORMATION .......................................................................................................................................37 5.2 NETWORK CONSIDERATIONS ..................................................................................................................................37 5.3 ISO 20022 MAPPING ..........................................................................................................................................37 5.4 CLIENT SUPPORT..................................................................................................................................................38

6 APPENDIX A: DTCC IMPLEMENTATION OF ISO 20022..................................................................................... 39

6.1 MESSAGE FLOWS.................................................................................................................................................39 6.2 DTCC NAMING CONVENTIONS...............................................................................................................................42 6.3 SUPPLEMENTARY DATA (EXTENSIONS) .....................................................................................................................42 6.4 NOTATION..........................................................................................................................................................44

7 APPENDIX B: SAMPLE ISO 20022 MESSAGES.................................................................................................. 45

7.1 ANNOUNCEMENT EXAMPLE -‐ TENDER OFFER ............................................................................................................45

1 Introduction

1.1 Background

1.1.1 Reengineering and ISO 20022 Messaging

DTCC’s Corporate Actions Reengineering project will transform how DTCC processes and communicates with its participants and clients, across the whole corporate actions lifecycle from announcement through to payment. The goal of the multi-year reengineering project is to upgrade and replace many of the legacy systems that currently support corporate actions at DTCC. The project will be implemented in phases over the course of the next several years, with the goal of retiring all corporate actions legacy systems. The project will introduce a number of changes to corporate actions processing: • A new data model based on event data and business process will replace existing function and activity

codes; • ISO 20022 messaging will be used for participant and client electronic communication; and • DTCC will communicate proprietary (non-ISO 20022) data elements through the use of ‘supplementary

data’ structures (also known as ‘extensions’).

• A new User Interface and browser that displays both corporate actions announcements and, ultimately, life cycle elections, instructions and payment information.

In addition to the work undertaken on its data model and message structures, DTCC is also continuing to work with other organizations to promote the use of ISO standards. These include SWIFT (Society for Worldwide Interbank Financial Telecommunication), as well as industry groups including SIFMA (Securities Industry and Financial Markets Association) and ISITC (Industry Standardization for Institutional Trade Communication).

1.1.2 Phased Approach

Since the project’s initiation, DTCC has taken a phased approach to the reengineering initiative by building a corporate actions data model, mapping existing messages and data elements onto equivalent ISO 20022 messages and message components, and holding a pilot testing exercise with selected market participants, focusing on the announcement phase. Over the past several years, DTCC has also worked with members of the U.S. and global market to introduce a number of changes to ISO 20022 to accommodate some of the industry’s most significant requirements. ISO 20022 messages for the announcement of corporate actions are already live across the SWIFT and SMART MQ networks. These announcements cover the full range of corporate actions (distributions, redemptions and reorganizations), and were migrated to DTCC’s Production environment on November 21, 2011. The remainder of the project will progressively introduce the full lifecycle of messages for distributions, redemptions and reorganizations, as well as a Graphical User Interface (GUI, or WAVES Browser).

ISO 20022 messages will also be introduced for Meeting announcements, along with the Distributions lifecycle (Phase 3).

1.1.3 Purpose of This Guide

The purpose of this document is to introduce some of the major changes associated with the initiative, and to provide a guide to the documentation available to help market participants migrate to the new ISO 20022 messages and data model.

1.2 Market Communication

1.2.1 DTCC Website

The DTCC website (www.dtcc.com) is the primary repository for information relating to the reengineering initiative. Webinars and other direct communication methods will also be used where possible and appropriate. Clients can review the published documentation and use the website to keep updated on new developments. See: http://www.dtcc.com/leadership/issues/reengineering/corp_actions/index.php A webcast is available to help clients map to ISO 20022: • Moving Toward the ISO 20022 Standard: this webcast provides an overview of how to use the

documentation needed to map from DTCC’s legacy data files to the ISO 20022 standard, complete with a high level mapping example

See: http://www.dtcc.com/leadership/issues/reengineering/corp_actions/iso_20022_content/index.html • New User Interface: this webcast provides a comprehensive overview of the new user interface (UI)

web browser See: https://dtcc.mzinga.com/app/servlet/goTo?Page=CourseInfo&DirectLinkID=94362 • The new user interface will be replacing Corporate Action functions currently on PTS and PBS. An overview of the phases and implementation timing for the DTCC Corporate Action Reengineering initiative can be found at: http://www.dtcc.com/downloads/leadership/issues/reengineering/Implementation_Timeline2010.pdf

1.2.2 Documentation

To support system development needs for DTCC clients, the following ‘Technical Documents and Specifications’ can be found at: http://www.dtcc.com/leadership/issues/reengineering/corp_actions/specs.php: • Reengineering Migration Guide for Adoption of ISO 20022 Messaging (pdf): This document. • Legacy Data Files: Provides a list of existing DTCC data files that will be replaced by ISO 20022

messages under this initiative.

• ISO 20022 Message Specifications for Announcements (zip): Provides guidance to the message schemas: data element definitions, formats, DTCC synonyms, and ‘extended’ elements for announcement and cancellation messages

• ISO 20022 Specifications for Corporate Actions Lifecycle (zip): Provides guidance to the message

schemas: data element definitions, formats, DTCC synonyms, and ‘extended’ elements for the remainder of the lifecycle covering elections, entitlements.

• Mapping Legacy to DTCC New Model (xls): Identifies relationships from the legacy CCF fields, by file,

to the new data model data element name.

• Corporate Actions Scenario Documents (pdf): Identifies event scenarios with specific one to one

mapping relationships between DTCC’s new data model and its legacy systems. • DTCC Corporate Action Events Dictionary and Data Elements Dictionary (zip): ISO 20022 event

types and data elements with mapping back to DTC, GCA VS and ISO 15022. The documentation will be revised as needed to reflect appropriate changes identified from the review processes.

1.2.3 Market Consultation and Feedback for ISO 20022 Messaging

DTCC has held, and will continue to hold, industry consultation sessions with key market participants and will continue to consult with industry bodies. DTCC also ran a pilot program before the launch of the new announcement process. In addition, market participants may submit inquiries and/or comments to the CA Reengineering mailbox ([email protected]) or contact Roxana Argintescu via email at ([email protected]). Customers may also contact Robert Epstein via email at ([email protected]).

1.3 ISO 20022 Benefits

Since the creation of DTCC's depository in 1973, it has utilized its own proprietary formats for corporate actions processing. So why switch to an international standard, and why ISO 20022? DTCC recognized that it needed to respond to an ever-changing environment and to be able to accommodate what was becoming a global investment business. DTCC's Participants and customers had expanded their businesses throughout the world and wanted to streamline, as much as possible, the standards and formats used to communicate. ISO 20022 meets those needs and offers a host of benefits, including:

• Flexibility – both in terms of its content and tailoring of output. As new corporate actions are developed, the messaging standard can change to meet the demands of the business, not the other way around.

• XML Syntax – due to its widespread support, XML allows for easier processing and more efficient

yearly maintenance.

• Schema Validation – used to confirm that each data element is populated with a valid value.

• Greater Straight-Through Processing (STP) – corporate action events will be announced using a data model that conforms to market practice, which also contains less narrative or “free text” and more fielded and tagged data.

• Unique Corporate Action ID for Each Event – can be tracked through the life cycle of the event –

from announcement, to election, entitlement, and payment.

• Enhanced Data Elements – a more comprehensive and granular number of data elements, which allows for greater accuracy and, ultimately, less processing risk on the part of the customers.

• Maintenance – the yearly standards process requires DTCC to constantly review, scrutinize and

maintain its standard to ensure compliance with market practice. This in turn will lead to less ad hoc maintenance and instead institute a systematic approach to the business rules driving the file formats, not the other way around.

• A Global Standard -- In defining a new model for U.S. and global corporate actions, DTCC worked

closely with SWIFT, ISO 20022's registration authority. DTCC then worked with the Securities Markets Processing Group (SMPG) and the International Securities Association for Institutional Trade Communication (ISITC) to develop proposals for changes to the ISO 20022 standard as it related to corporate actions, which were reviewed and approved by the Securities Standards

Evaluation Group (CA SEG), a group of international industry experts who accept or reject changes to the ISO 20022 standard’s repository. DTCC then presented the proposals to the Corporate Actions Maintenance Working Group, a group that is responsible for all annual ISO standard release changes for evaluation and admission for the final country vote.

2 Key Concepts This section outlines some of the key concepts in the DTCC corporate actions reengineering. These are: • the use of ISO 20022 messages and data model; • the changes resulting from the new data model; • the need for ‘issuer’ and ‘DTC’ message products; • the resulting message structure (taking a corporate action announcement as an example); • the methods of communication with the new DTCC systems.

2.1 ISO 20022

DTCC is committed to migrating from existing proprietary corporate action data files to the global ISO 20022 financial messaging standard. ISO 20022 includes both securities and payments messages within its scope, and is founded on modern data modeling techniques and business process analysis. Central to the standard is a global, cross-functional data dictionary and business process model. By aligning with these components, DTCC will provide clients with increased operability within their own systems and with other external processes. While moving towards the ISO 20022 standard adheres to the general movement away from proprietary formatted files, there are data elements and codes within the DTCC data model that do not exist within the ISO 20022 corporate action announcement messages. To accommodate these additional data elements with the ISO 20022 messages, DTCC will make use of the facility within such messages to include ‘supplementary data’ specific to a market or community. The ‘supplementary data’ structures (also referred to as ‘extensions’) will enable DTCC to provide an agreed-upon and machine-readable structure within the messages for those data elements that have not been globally agreed to form part of the main message. Note that the structure of the extension must be validated by the ISO community and registered within ISO 20022, and this process includes the addition of the elements to the ISO 20022 data dictionary. This allows for improved interoperability while avoiding an impact on the messages themselves which may have been implemented in other communities. In time, it is hoped that many of the elements initially placed in the extension structures will be accepted into the standard message globally. To that end, DTCC is working with the National1 and Global2 Market Practice Groups to enhance the ISO 20022 standard. Other elements may be required only for coexistence with the existing DTCC systems, or may not be accepted globally, and will thus remain in the extension structure for the foreseeable future. Changes to the ISO 20022 standard occur on a regular basis (usually on an annual basis) which will require DTCC and its participants to accommodate specific changes which will require revisions to the technical documents provided by DTCC and participants’ systems. More information on the ISO 20022 standard can be found at www.iso20022.org.

2.2 Corporate Actions Data Model

The ISO 20022 data model for corporate actions differs in several key respects from the existing DTC legacy systems (such as DIVA and RIPS). The GCA VS (Global Corporate Actions Validation Service)

1 The U.S. Securities National Market Practice Group is ISITC. See www.isitc.org 2 The Securities Market Practice Group, SMPG. See www.smpg.info

platform WAVES, which has been leveraged to create the event structure, is aligned with the ISO standard and matches the ISO 20022 model closely, but there are still differences, noted below. The main differences are identified in the following list, and subsequently explored more thoroughly in the sections that follow: • A complex event is sometimes split into multiple events for processing purposes, such as the delivery

of rights in a distribution event, followed by an elective event to exercise those rights. • The identification of the event is a key component in the ISO model. A corporate action identification

number is issued by DTCC for each DTC-eligible event and will remain consistent throughout the life of the event. DTCC will provide this official reference number ONLY through an ISO 20022 message for DTC-eligible securities.

• ISO 20022 uses its own set of event type codes to define the event and how it must be processed; in

some cases the level of granularity is different from DTC function codes.

• A critical data item for each event is the mandatory/voluntary indicator, which shows whether an event is mandatory without options, mandatory with options or voluntary.

• ISO 20022 seeks, wherever possible, to avoid the use of narratives and free text; there will, however,

still be occasions where data must be supplied in text form.

2.2.1 Multiple Events

In the existing DTC model, some complex events are defined using multiple envelopes and function codes. The new model is able to define a single event with multiple options and payouts to account for the complexity of the event. Where the event complexity is such that processing is facilitated by multiple events, the events will be linked by reference. Where the market itself defines multiple events, they are linked by reference in the new model (see identification, below). DTCC also provides the possibility, through the browser, to view related events for the same CUSIP or CUSIP family. A comparison of the approach to multiple events is summarized below:

Feature Existing DTC Model Existing GCA VS Model The New Model

Market defined single event

Multiple envelopes and function codes represent a single event where complexity exists.

Some announcements are created to support the DTC multiple envelopes. The current GCA VS model closely mirrors the new model.

Single event provides all details using multiple options and payouts to account for event complexity.

Market defined multiple events

Linked through the use of text. Same concepts as the new model with the exception of CUSIP family.

Event linking provided dynamically via reference to the event identifier (Related

Event ID) and link type describing association/relationship.

Related events (same CUSIP or CUSIP

family) are displayed in the browser (not included in messages).

DTC defined multiple events

Multiple events are processed through function and activity codes with linking verbiage in

Some announcements are created to support the DTC multiple envelopes. The current GCA VS model closely

To facilitate processes at DTC some events may be announced as multiple events. Those events will be linked via reference to the event identifier (Related

Feature Existing DTC Model Existing GCA VS Model The New Model

the comment text. mirrors the new model. Event ID) and link type describing association/relationship.

2.2.2 Identification

The ISO 20022 data model includes a number of identifiers for an event. The Corporate Action Event Identification must be populated by any institution (data providers or account servicers) that sends event announcements. This identifier is then referenced in any further communication (replacement announcements, or subsequent processing) for that event by that institution. In addition, the Official Corporate Action Event Identification is a unique event reference for the event, and is assigned by a designated body within each market. DTCC will publish the Official Corporate Action Event Identification on DTC eligible securities on its ISO 20022 messages. This new identifier will not be incorporated into legacy files. Where applicable, ‘related’ events will be linked using the Corporate Action Event Identification. For example, the relevant Event Identifications will be listed on each event where two or more events should be taken together to understand a complete event, or where the events have a material impact on each other.

2.2.3 Event Types

DTC currently generates announcements using Function and Activity Codes that relate to event types. The event lifecycle is processed using these codes. DTC also has specific function codes for issue types. For example, Partial Call is announced under FC 74 for a Corporate Bond and FC 76 for a Municipal Bond. The reengineering initiative introduces the ISO aligned corporate action event types. All existing DTC ‘Function Codes’ and ‘Activity Codes’ as well as all existing GCA VS ‘proprietary’ event types, will be replaced with these new event types. In general, the new event type defines the event without reference to the security type, processing flags or the mandatory/voluntary indicator, although some exceptions apply. DTC defined event types in some cases are more granular than ISO e.g., Maturity, Warrants Redemption, Termination are all represented as Final Maturity (REDM) in ISO Event Type value. These more granular DTC event types will be identifiable by either using additional elements in the message, like: EventProcessingType or use of extensions like ExtendedEventGroup.

2.2.4 Sub Event Types

Most of the DTCC defined event types in combination with sub event types have one corresponding ISO event type. However, there are instances where more than one DTCC defined event type (+ sub event type) will be represented by one ISO event type, and also where some DTCC defined event types do not have a corresponding ISO event type. A complete list of DTCC defined event types and sub event types and their corresponding ISO codes are available in the DTCC Corporate Actions Events Dictionary. Finally, a few of DTCC new events have been mapped onto the generic ‘other’ ISO event type code. These events can be distinguished using existing message elements whenever it is possible or by using extensions. The following table lists the event types mapped to ‘other’ (OTHR).

Event Name Usage ISO Event Type Code Mapping

Additional Qualifier (Message Element)

Distribution A distribution by the issuer that is not classified as another specific event.

OTHR (Other) (ISO) EventProcessingType:

DISN

General Information

General information provided by the issuer that should not result in material changes to the security.

OTHR (Other) (ISO)

EventProcessingType: GENL

Reorganization A reorganization event announced by the issuer that cannot be classified as another event.

OTHR (Other) (ISO) EventProcessingType:

REOR

Rights Plan Adoption

General information provided by the issuer that should not result in material changes to the security.

OTHR (Other) (DTCC Extension) EventType:RPLA

Other Event that cannot be classified into any business scenario. (Available to GCA by subscription).

OTHR (Other)

2.2.5 Mandatory/Voluntary Indicator

The new corporate action event types will also include a notation as to the ‘nature’ of the event, which will be one of the following: • Mandatory (M): Events that occur without representation from the holder. These can be driven

unilaterally by the issuer or as an attribute of the security. Examples are: Cash Dividend and Maturity. • Voluntary (V): Events that require an election, or not, from the holder. For example, Tender Offer and

Rights Subscription. • Mandatory with Options (MO): Events that are mandated by the issuer/offeror but where a choice of

entitlement is offered. The holder can make an election or not respond and receive the default option. For example: Dividend with Options and Merger with Elections.

2.2.6 Narratives

A key goal of the ISO 20022 standard is to reduce the amount of data sent as free text, thus increasing straight-through processing (STP). In the DTCC reengineering implementation of ISO 20022, a number of different narrative fields will be used to further clarify details of the event: • Terms (mapped to ISO InformationConditions): Provides a summary of the event in a manner that will

enable message recipients to send the information directly to their clients. • Restrictions: Event restrictions are key details that need to be easily identified and understood by all

parties. ‘Restrictions Text’ occurs at two levels: o Restrictions (mapped to ISO InformationToComplyWith): Details restrictions that apply to the

event.

o Restrictions on Disbursed Security (Payout Level, mapped to SecurityRestriction): Details restrictions that may be applied to the new security, including where the new security is not DTC eligible and needs to be ‘exited’.

• Comments (mapped to AdditionalText): Critical information regarding specific processing about the

event.

• Vendor (mapped to NarrativeVersion): Information supplied by the data vendor.

• Option (mapped to OptionsDetails/ NarrativeVersion): Provides a summary of the option provided in a manner that will enable message recipients to send the information directly to their clients.

2.2.7 DTCC Workflow Status

DTCC’s new data model contains twelve different internal workflow statuses that ultimately map to the ISO 20022 standard workflow statuses. The chart below will help you to understand those statuses and how they ultimately relate to what you will receive via the ISO 20022 message.

2.3 CSD (DTCC) and Market (Issuer) Data

ISO market practice views information based upon the sender of the message (usually an Asset Servicer); therefore, two types of the message have been created to support the needs of the different roles DTCC plays. DTCC will issue announcements for corporate actions in two product types: • CSD Data: the event data is being issued by DTCC in its role as a Central Securities Depository (CSD),

and reflects the key data provided by DTC in the core message and issuer of underlying security data extended as supplementary;

• Market Data: the event data is being announced by DTCC in its role as the provider of market data,

and reflects the key data supplied by the issuer of the underlying security in the ‘core’ standard part of the message and DTC data extended as supplementary.

All of the data will be the same in both products. For example, the record date is always provided by the issuer. But the key data mapping will vary depending on whether the event is being announced in the CSD product or the Market product. For example: if the event is a Cash Dividend, its payout data fields will contain DTC Cash Rate and Declared (Issuer) Gross Rate. In the CSD product, DTC Cash Rate will be mapped to the ‘core’ standard part of the message and Declared Gross Rate will be extended as supplementary data. And vice versa: in the Market product, Declared Gross rate will be mapped to the ‘core’ standard part of the message and DTC Cash Rate will be extended as supplementary data. Clients and participants of DTCC will need to determine which version they wish to receive and select the appropriate message packages (outlined below and in Section 5). Messages will be constructed on several building blocks including ‘core’ standard message mapping required (for processing) supplementary extension, and optional service extensions that will work like plug-ins to further enrich data. The illustration below depicts the principal composition:

There are 7 key data elements that may take different values based on the variant selected by the participant. Each data element is provided in the message in both CSD and Market product. The following table lists the data elements and defines for each product whether the element can be found in the core message or in the extension.

In most cases, the same options will be offered (announced and processed) by both the Issuer/Offeror and by DTC. However, on occasion, there will be options offered by the issuer that are not processed by DTC, while at other times it may be that DTC offers an option that is not offered by the issuer. The message will contain all known options for the scenarios outlined above. Each option will be ‘flagged’ if it is not processed by DTC or if it is not offered by the issuer. It is also possible that the default option differs depending on source of the option: DTC or Issuer. These will also be flagged where appropriate. The following table summarizes the DTC and Issuer Options scenarios.

Option Scenario Issuer Supported

Option Flag DTC Supported

Option Flag Remarks

Issuer offers the option. DTC supports (processes) the option.

Y Y No special tag in the message. Option support by the Issuer and DTC is assumed unless specified otherwise.

Issuer offers the option. DTC does not support (process) the option.

Y N Option Features element in the core message will have code NOSE to identify this scenario.

Securities must be delivered out of DTC for participants wishing to take part in the specific event option.

Option Scenario Issuer Supported

Option Flag DTC Supported

Option Flag Remarks

Issuer does not offer the option. DTC supports (processes) the option.

N Y IssuerSupported flag in the extension will be set to “No”. The option is not supported by the Issuer - only DTC participants can take part.

The following table summarizes the DTC and Issuer default Option scenarios:

Option Default Scenario Issuer Default

Option Indicator DTC Default

Option Indicator Remarks

Issuer offers the option. DTC

supports (processes) the option. Both DTC and Issuer announce it as the default option.

Y Y Applies to all DTC Participants and non-participants.

Note: Events with a single option are required to have a default option, even if a mandatory event, per ISO standards.

Issuer offers the option. DTC supports (processes) the option, but announces different options as the default (DTC DRIP).

N/Y Y/N Applies to DTC Participants only.

DTC does not support Issuer’s Default Option.

Y N/A Applies to DTC Participants only.

DTC has an additional option (that Issuer does not offer) that option is designated as default at DTC.

N/A Y Applies to DTC Participants only.

The primary creators of corporate action content are the issuer / agent, depository and the stock exchange. DTCC’s data model, and to some extent ISO, accommodates the different ‘owners’ of the information either explicitly or implicitly. While the ‘ownership’ of specific data elements is mostly straightforward, there are some concepts that DTCC will differentiate, as DTC data and Issuer data are not noted as such in ISO model. The following table provides a summary on data element ‘ownership’:

Scenario Details Example

DTC Only Information Information that is created by DTC in its capacity as the

Depository for DTC eligible securities or for DTC specific services.

The data element will be prefaced by ‘DTC’.

• DTC Last Day for Deposit

• DTC Chill Release Date for Deposit

Issuer Only Information Information only supplied by the issuer.

Does not have specific notation.

• Record date

• Proration date

Stock Exchange Only Information

Information only supplied by the stock exchange. • Ex-date

Scenario Details Example

Does not have specific notation.

DTC and Issuer Data Elements

Similar information that both the issuer and DTC provide.

Custodian data is usually prefaced by ‘DTC’ and the issuer by ‘Declared’ or ‘Actual’.

• Actual Expiration Date • Declared Cash Rate • DTC Instruction Expiration Date

• DTC Cash Rate

GCA VS Only Information

Information that GCA VS provides to its clients.

GCA only data will be included as a ‘service’ extension. GCA

only event types (non US) will be published only to subscribed customers.

• Level Statuses • Non U.S. Event Types e.g.

Assimilation

2.4 Message Structure

The DTCC corporate actions data model is aligned with ISO. There are, however, differences in the representation. This section will explain the relationship between the two models using a corporate actions announcement as an example. The DTCC Corporate Action Model has several “levels” (noted in the diagram below in blue rectangular boxes e.g. Event, Certificate, Option, etc.). The levels are associated with ISO Corporate Action Notifications either directly or based on a condition (noted in diamond shapes). The multiplicity (noted using UML notation as 0…1, 0…*) is displayed for levels and message building blocks, as well as for associations between the DTCC levels and the ISO message building blocks or components.

Structurally, a corporate action consists of a number of data ‘levels’, a hierarchy of logical groups that contain related information. The main data levels are: • Event level: data that applies to the entire corporate action, such as the event type, and

mandatory/voluntary indicator; the level is mandatory and non-repetitive; • Option level: data that applies to a single option only, such as the option number, option type, and

whether the option is supported by DTC and/or the issuer. Note that in the ISO 20022 data model, even a mandatory event with a single payout is defined as having one option; and,

• Payout level: data for each payout such as the identity of the outturn security or the rate of the security

or cash payout; there may be one or more payouts per option; payout levels are distinguished by a payout number (sequential order) and payout type.

These data levels are also built into the structure of the extension component. Where there are DTCC data elements not included in the ISO message structure, the element is placed in the structured extension at the appropriate level. For repetitive levels such as option or payout, it is possible to identify to which instance of the data the extended element belongs. All ’Mandatory’ and ‘Mandatory with Option’ events will require a ‘default option’ to be present to indicate which option will be given to the holder in absence of an election. True voluntary events (i.e. Tender Offer) will include an option zero (0). Option zero will be published as ‘999’ in the ISO message. The ‘0’ option will either represent the option to abstain or to take no action. These options are generated to represent the opportunity for the security holder to perform no action with regards to this event and assist clients with internal processing. Events that are considered ‘mandatory’ or ‘mandatory with options’ will not include this 0 option. Where possible, each option will be named based upon ISO definitions. However, DTCC has also included a provision for several non-compliant option types, such as ‘Foreign Currency Payments’. DTCC has defined those special option types in the extension schema. When such an option is offered, it will be noted the options outturn in in the core message (SECU for reinvestment, CASH for currency payment) and the ExtendedOptionFeaturecode will be provided in the extension component. The Message Implementation Guideline, a message specification document, reflects these definitions in detail. The following table provides a summary of the ISO message representation of DTC specific option types:

DTCC Option Type DTCC Usage

ExtendedOptionFeature code ISO Mapping

DRIP DTCC will use DRIP as an option rather than as an event type for DTC-eligible U.S. securities.

Holder elects to receive additional securities

instead of the cash distribution. Option may be declared by the issuer or as a service offered by DTC.

n/a SECU

Convert Used for all conversions, when the payouts are not known by option expiration date.

n/a CASE

OptionsFeatures: CAOS

AdditionalText = Convert

DTCC Option Type

DTCC Usage ExtendedOptionFeature

code ISO Mapping

Subscribe Used for Subscription Offers and Rights Subscription events.

n/a EXER (Exercise)

Foreign Tax Unfavorable

The event and security are eligible for the Foreign Tax Relief service at DTC. Option to select

unfavorable tax rate. The Foreign Tax Unfavorable option is the default option.

FORU CASH

Foreign Tax Favorable

The event and security are eligible for the Foreign Tax Relief service at DTC. Participant receives their payment at a favorable tax withholding rate.

FORF CASH

Foreign Tax Exempt

The event and security are eligible for the Foreign Tax Relief service at DTC. Participant is exempt from any withholding tax.

FORX CASH

DRIP Unfavorable

The event and security are eligible for both Dividend Reinvestment and Foreign Tax Services at DTCC. Participants will receive additional shares and the Tax Withholding on those shares will be at the unfavorable tax rate.

DRPU SECU

DRIP Favorable The event and security are eligible for the Foreign Tax Relief service at DTC. Participant receives its payment at a favorable tax withholding rate.

DRPF SECU

DRIP Exempt The event and security are eligible for both the Dividend Reinvestment and the Foreign Tax Relief

service at DTCC. Participants will receive additional shares and will be exempt from any tax withholding.

DRPX SECU

Foreign Currency

Payment

The event and security are eligible for Foreign

Currency Payment Service at DTCC. Participants will receive their distribution in the Foreign Currency instructed.

FCPP CASH

Foreign Currency Payment Unfavorable

The event and security are eligible for both the Foreign Currency and Foreign Tax Services at DTCC. Participants will receive their distribution in a foreign currency and the tax withholding on that distribution will be subject to unfavorable tax withholding.

FCPU CASH

Foreign Currency Payment

Favorable

The event and security are eligible for both the Foreign Currency and Foreign Tax Services at

DTCC. Participants will receive their distribution in a Foreign Currency and the Tax Withholding on that distribution will be subject to favorable tax withholding.

FCPF CASH

Foreign Currency Payment Exempt

The event and security are eligible for both the Foreign Currency and Foreign Tax Services at

FCPX CASH

DTCC Option Type

DTCC Usage ExtendedOptionFeature

code ISO Mapping

DTCC. Participants will receive their distribution in a foreign currency and will be exempt from any tax withholding.

Payout level is similar in cardinality and principle to CashMovementDetails or SecurityMovementDetails (repetitive components in the CorporateActionOptionDetails building block). However, there is a key difference – the DTCC data model factored out rate types from the rate itself (consideration for flexibility). Payouts contain information fields such as “generic” rate or price that is qualified by the payout type. ISO movement sections generally have separate rate fields within one Cash / Security / MovementDetails component. To maintain the straightforward relationship every Payout will be allocated Cash / Security / MovementDetails in the ISO message. The following additional DTCC levels (not including Event, Option, Payout explained above) are accommodated within the ISO 20022 message as follows: DTCC Level Details ISO Fields Comment

Lottery Contains details about the lottery (e.g., total called quantity, type of the lottery, etc,) when applicable, there can be none or one Lottery record per event.

Data elements from the lottery level populate ISO fields in the CorporateActionDetails message building block.

This level is optional and non-repetitive in the message. The DTC Browser will provide all lotteries. Message will contain details of the most recent one.

Non-ISO elements are extended.

Certificate Contains details about the called certificates in corporate action events where the issuer

chose to redeem part of the outstanding issue which may include specific certificate numbers.

This level is optional and repetitive.

This level is extended.

Event Text Contains additional information related to the event in text form, where there may be none, one or many occurrences of Event

Text, distinguished by Text Type, and one Text Type per event.

Data from the event text level will populate ISO fields in AdditionalInformation message components.


DTCC Level Details ISO Fields Comment

Agent Information that applies to details of the agent related to the event, where there may be

none, one or many agents, distinguished by Agent Type, and only one occurrence of an Agent Type per event.

Agent details are factored into one level and qualified by the Agent Type element.

ISO message has separate message building blocks for each agent.

Data elements from the Agent level will populate ISO fields in appropriate “agent” block based on the following rules:

DTC Agent Type ISO Message Block

Event Agent Issuer Agent

Event Agent (Bearer) Physical Securities Agent

Drop Agent Drop Agent

Information Agent Information Agent

Solicitation Agent Solicitation Agent

Remarketing Agent Reselling Agent

Transfer Agent Paying Agent

Drop Agent (Bearer) Extended

Others Extended


Non-ISO elements or Non-ISO agent types are extended.

Related Events

Contains reference to the related events, where there may be none, one, or many Related Events per event.

Data elements from the Related Events level populates ISO fields in EventsLinkage message building block.


Non-ISO elements are extended.

SOI* Contains references submitted on the Security of Interest (SOI),

where there may be none or one SOI per event.

*Applicable subscription service only.

This level is optional and non-repetitive.


Custodian Service*

Contains details specific to custodian record.

*Applicable to custodian subscription service only.



Derivative* Contains details of a derivative notice of change.

*Applicable to derivative subscription service only.



2.5 ISO 20022 Message Delivery and Network Protocols

The reengineering project will introduce the new ISO 20022 messaging alongside a browser-based Graphical User Interface (GUI). Message subscriptions will be available to allow participants to control the flow of data.

Messages will be transported using one of the two networks, with the following protocols:

• SMART (DTCC Proprietary Network) o MQ (currently available) o NDM (available in 2012) o File (available in 2012)

• SWIFT o InterAct Store and Forward (currently available) o FileAct (available in 2012)

SMART Customers considering using the SMART network should contact their DTCC Relationship Manager to determine if they have a SMART circuit currently in place. If so, DTCC will perform bandwidth utilization studies on the current lines to determine if an upgrade to a larger circuit is necessary. There is no cost for transmitting messages via SMART, but customers do have to pay for the circuit itself. Pricing – which is a direct pass-through from the telephone company servicing the line – is fixed based on circuit size. SWIFT Customers considering the SWIFT network should contact their SWIFT Relationship Manager for provisioning and pricing details. Ultimately, these communication methods will allow DTCC clients to benefit from: • Increased availability and timeliness for corporate actions data: Customers will benefit from the

enhanced processing engine that allows for CA messages to be updated and published throughout the day. Updates will be applied to existing events at intervals for dissemination.

• Subscriptions: Subscription options exist for three main event groups: Distributions, Reorganizations

and Redemptions. Within each event group, participants will be able to choose to receive messages intra-day or end of day using various message protocols, depending on the criticality of the event. Addition information can be found immediately below in Section 2.5.1.

2.5.1 Subscription Options

DTCC will provide a subscription model to allow clients to choose how they will receive their messages. Subscriptions will allow participants and clients to choose: • The timing and frequency of announcements; • How some data fields are populated through content subscriptions; • The data content of messages through package subscriptions; • To receive events based on “final” or “non-final” (Incomplete) workflow statuses. The project introduces frequent intra-day announcements of corporate actions data. Customers will be able to set subscription options to select the receipt of data from DTCC in a variety of methods, including timing and content. For example, DTCC will allow the customer to choose how frequently data is received based on their needs. In the event a customer chooses to receive data less frequently throughout the day, unread event messages will remain queued for each customer until the next time a client extracts the data. In addition to the frequent availability of new messages, subscription options will allow customers to configure the data in a variety of ways. The ability to customize the receipt of data allows all participants to optimize the service to suit their specific business needs. Dividend Distribution, Redemption, Maturity (Cash) and Reorganization event group data will be updated and available through the DTCC ISO 20022 messaging hub throughout each business day. Historically, Participants have accessed CA event information using the DTCC Computer-to-Computer Facility (CCF) file transmissions once at the end of the business day (or in the case of certain situations, in hourly slices throughout the day). With the new messaging, ISO 20022 allows events to be made available in an on-demand schedule that suits each customer. Customers who wish to continue with the current

Proprietary Files and ISO 15022 messages will still have the option to do so, until DTCC establishes a specific sunset date (no later than 2015). Participants will be able to select, for each category of events, whether to receive notifications intra-day or at the end of the day. For distribution and redemption events, clients will be able to select a third subscription category, to receive more urgent information intraday and remaining information at the end of day. The following table illustrates the subscription options available for the different types of corporate action announcement:

CA Type Intra Day Option End of Day Option Combination Option

Distribution All announcements available intra day

All announcements available at end of day

Announcements with trigger date within 7 days will be sent intra day

Announcements with trigger date beyond 7 days will be sent at end

of day

Redemption All announcements available intra day


Announcements with trigger date within 8 days will be sent intra day

Announcements with trigger date beyond 8 days will be sent at end

of day

Reorganization All announcements available intra day


Not available

The trigger date for each event is the earliest of the key dates for the event, such as Actual Expiration Date, DTC Instruction Expiration Date, Declared Payable Date, Ex-Date, Record Date, and Publication Date. Customers will also be able to use subscriptions to select the content of their messages. The following table outlines the proposed content subscription options available:

Feature Description

Publish Changes Only Ability to provide Custodian (available via the GCA VS product) or Composite Details for either the Composite or the Custodian when an update has occurred on the corresponding record.

Publish Composite Links

DTCC Operations enriches the Composite Records with Corporate Action links to associate related events. The “Duplicate” link type indicates the linked Composite Records that describe the same event. All other link types describe separate, but related events. For instance, a Rights Subscription will be linked to the corresponding Rights Distribution with a link type of “Intermediary security”.

Publish All Text Types Customers will have the option to view all the text types including Terms, Extended Text, Restrictions and External Notes. Clients who choose not to receive this information will have access to the rest of the corporate actions data.

Publish Scheduled Payments

Clients who elect to receive Scheduled Payments will receive scheduled Principal, Interest and Maturity events as part of their data feed. Customers who do not wish to have this information included can receive all other event types.

Feature Description

Event Based Availability Based on Legacy Feeds

To facilitate the consumption of data for customers who have been processing the CCF files, subscription options will exist to allow clients to select the announcements provided based on the event types and sub-event types. The use of events and sub-event types typically supported in the

DIVANN, CMORT, MUNANN, Redem, Reorg files will comprise some, but not all of, the subscription options available for the Phase II(a) release.

Customers will also be able to select a package to define the product they will receive. The available packages are: • Package 1 - Announcement CSD Type (basic); • Package 2 - Announcement Market Data Type (basic); • Package 3 - Announcement CSD Type + Validation Service; • Package 4 - Announcement Market Data Type + Validation Service; • Package 5 - Announcement CSD Type + Validation Service + Derivative Service; • Package 6 - Announcement Market Data Type + Validation Service + Derivative Service; • Package 7 - Announcement CSD Type + Derivative Service; • Package 8 - Announcement Market Data Type + Derivative Service; • Custodian Record. As part of the On-boarding process detailed in Section 4 of this document, Participants should work with their Relationship Managers and the DTCC CA Reengineering support team to understand the various messaging options and, ultimately, how to subscribe to them.

Message Component Pac

kage

1

Pac

kage

2

Pac

kage

3

Pac

kage

4

Pac

kage

5

Pac

kage

6

Pac

kage

7

Pac

kage

8

Cus

todi

an

Business Application Header Y Y Y Y Y Y Y Y Y Core MX components CSD MKT CSD MKT CSD MKT CSD MKT MKT Supplementary Data CSD MKT CSD MKT CSD MKT CSD MKT MKT Optional Service Extension - - Y Y Y Y - - Y Custodian Extension - - - - - - - - Y Derivative Extension - - - - Y Y Y Y -

So, for example, customers might select the following data sets based on their market roles.

2.5.2 CCF Legacy File Interface and Scheduling

Existing files will continue to be made available according to the current schedule. The 20022 messaging format and hub is intended to be compatible with the SWIFT, SMART and MQ messaging standards. In 2012 DTCC will be providing additional messaging protocols (FileAct for SWIFT; and NDM, File and FTP for SMART).

2.5.3 Data Files and Messaging Co-Existence

DTCC plans to decommission the legacy files in the future. Until then, DTCC will support both legacy files (CCF) and the new ISO 20022 messages. During this period there will be limited changes ─ except in Phase 5 to Reorg processing ─ to the legacy files. DTCC provides ISO 15022 messages as an option to GCA VS clients. Although GCA VS will continue to support ISO 15022 as a legacy format, which will include modification for appropriate maintenance changes, there will be limited population of non-ISO data elements which will be shown in the appropriate ‘text’ tag and sequence.

2.5.4 Technical Transition Considerations

The taxonomy of the ISO 20022 CA event differs from the format of the DTC CCF Files, the GCA VS Proprietary Publication and the GCA-VS ISO 15022 messages. Customers should prepare for the transition to ISO 20022 by viewing the technical specifications available on DTCC’s website: www.dtcc.com/careengineering and ISO 20022 model and repository on www.iso20022.org While the event-based messages in ISO 20022 offer complete coverage of the Function Code driven CCF files in terms of data elements, the structure of the ISO Messages allows for multiple payouts, options and information not currently available from DTC. The processing of the new ISO 20022 messages will require processing changes for customers who currently utilize the CCF legacy files.

2.5.5 Refresh Publication Processing

In order to facilitate customers' internal testing and scheduled deployments, a "refresh publication" will be made available upon request for all active events in the new database. The publication will produce all of the corporate action messages relating to active events that are included in the customer’s subscription. The request and timing for a refresh publication must be scheduled with DTCC in advance. This process will continue to be available after the transition from the CCF to ISO 20022 message period has been completed. This process can be used to restore databases, compare and evaluate the quality of incoming data or restore a system after an outage.

2.5.6 Customer Testing

DTCC understands that customers will have to make changes to incorporate the new ISO 20022 messages into their internal systems. To assist with the testing, DTCC will provide samples of each message type via e-mail in the quarter preceding each testing phase. The samples will give customers an opportunity to analyze the new event structure in the ISO 20022 format and facilitate their own internal testing before starting a parallel test. Sample announcement messages will be available first, and production data will be generated after the customers have the infrastructure and network connectivity in place to receive and send ISO 20022 messages. Performance testing will also be offered by DTCC so customers can do stress testing of their circuits, bandwidth and hardware and ensure that messages are being processed at a reasonable rate. DTCC can trigger production volumes to help customers accomplish this goal. NOTE: ISO 20022 sample messages are available in Section 7: Appendix B of this document.

3 DTC Services

3.1 DTC -‐ Canadian Dollar Settlement

DTC settles in US dollars except in the case of subscription services. DTC offers a service to its participants for Canadian Dollar Settlement whereby clients may submit instructions to receive cash proceeds related to a reorganization event in Canadian Dollars (CAD). This service is only available on Canadian issues. Participants that are registered for this service will have the opportunity to elect an option resulting in an issuance of CAD from DTC. In addition to this service, DTC will provide an election option that allows participants to request CAD payments for those participants who are not subscribed to the Canadian Dollar Settlement service. Clients electing in this manner are advised that required documentation and wire instructions should go directly to the agent. These instructions will request payment in CAD. When a participant elects this option, DTC will move the position into a holding account until the agent has advised that payment has been made. Once payment is confirmed by the agent, DTC will then remove the position. This option is differentiated using a Contra CUSIP that includes “DEL” in the 4th, 5th and 6th bytes of the Contra number. This code represents the fact that DTC will deliver off the position. The Canadian Dollar Settlement service is offered whenever the payment is declared CAD. For example, on Merger events the 72 (cash merger) or 90 (cash and securities merger) record will be used to pay participants who do not submit instructions requesting payment in CAD. In addition to this 72/90 Activity Code, there will be a 52 (tender) record representing each of the Canadian instructions (Canadian Dollar Settlement paid by DTC and CAD payment allocated directly from the agent), from which participants can submit the instruction. In the new data model, these elections will be represented as different options within a single event. While the event is a mandatory corporate action, as DTC will be offering settlement options, there will be additional DTC only options announced on the record. The Issuer option of Cash or Cash and Securities will be the declared (by the Issuer) and DTC (as the custodian) default option. Additional options will be included in the event to allow participants to elect to receive funds in CAD.

3.2 Foreign Tax Services

Foreign Tax Services is available to all DTC Participants. It provides the opportunity for Participants to elect on behalf of qualifying beneficial owners to receive a reduced rate of foreign withholding tax as a result of tax relief arrangements that DTC has set-up with foreign issuers, agents and/or the tax authorities. In relief-at-source markets, Participants who submitted tax elections and have provided the appropriate beneficial owner information and/or documentation to the agent, if required will receive their distribution based on those tax elections on Payable Date. Participants who did not submit tax elections or failed to provide the agent with the appropriate beneficial owner information and/or documentation, if required will be paid at the Unfavorable Tax Withholding Rate. In post payable date tax refund markets, Participants will receive the Distribution on the Payable Date at the Unfavorable Tax Withholding Rate and a tax refund payment shortly thereafter based on the Participant tax elections. For Participants electing to receive the Distribution in USD, the withholding tax is deducted at the appropriate rate in the foreign currency and submitted to the Tax Authorities. The remaining distribution is converted to USD and the payment is processed to the participant. Please see the Cash Dividend scenario document (scenario #5) for details on a cash dividend eligible for Foreign Tax Withholding. Please note that while the scenario shows a single favorable tax rate, there may be multiple favorable tax rate options. The number of favorable options is dependent upon the treaty agreement with the particular country in which the security is issued.

3.3 Foreign Currency Payments (FCP)

The Foreign Currency Payments service allows participants to elect to receive periodic interest payments on all or part of the record date position for certain foreign currency denominated debt securities through DTC in U.S. dollars or directly from the paying agent in the currency in which the issue is denominated. By using FCP, participants avoid certain foreign currency fluctuations by receiving the payments in the desired currency. Please see the Cash Dividend scenario document (scenario #7) for a more descriptive explanation as to the options made available to DTC Participants. The scenario demonstrates the option to elect foreign currency payment. The foreign tax service may also exist on an issue that is eligible for foreign currency. Due to the possibility of these multiple services existing on a single event, the new data model includes options specific to these possible situations.

3.4 DRIP Program

DTC offers Participants the option to purchase stock with the proceeds that would be disbursed from a cash dividend instead of receiving the cash payment. Certain issues are registered for this program. Instructions can be submitted per event. This feature also allows for a standing instruction which, once elected will become the default setting for future payments made on that security for the client. This program allows clients to maintain a dividend reinvestment eligible issue on deposit at DTC without losing the benefit of the issuer’s dividend reinvestment plan. It also works in conjunction with the foreign tax relief service by allowing clients to reinvest the net proceeds and have the appropriate tax withheld for eligible foreign securities. The new data model will support all the possible options that may be available. Please see the Cash Dividend scenario document (scenario #6) for a more descriptive explanation as to the options made available to DTC Participants.

4 Documentation Guide This section introduces a range of supporting documents that have been prepared by DTCC, and explains how they can be used to build an understanding of the new model and the migration from existing message files to the ISO 20022 equivalents.

4.1 Supporting Documentation

The supporting documentation provides information about the new message models and the mapping of data fields from legacy files to the corresponding data fields in the new model and in the new ISO 20022 message structures. The main set of documentation comprises the following: • Corporate Action Events Dictionary spreadsheet;

• Corporate Action Data Elements Dictionary; • Corporate Actions Scenario documents; • Legacy Mapping spreadsheets;

• Message Implementation Guide (MIG); and

• ISO 20022 Message Definition Report.

The Corporate Action Events Dictionary spreadsheet provides an overview of each event type in the ISO 20022 model and provides a comparison with existing DTC event types (function codes). An indication is also provided as to the level of compliance with global and U.S. industry norms. To provide a basis of understanding for the relationship between the new and old, DTCC has created Corporate Action Event Scenario documents for all of the supported event types. The information provided demonstrates the relationship between existing DTCC legacy systems and the new event-based data model. ISO values that will be used in the new messages are included for the event type, option type and payout type details which provide specific mapping guidelines. The Corporate Action Data Elements Dictionary provides a list of data elements, their level, and a cross reference from existing DTC and GCA VS elements to the new ISO 20022 element. The Legacy Mapping spreadsheets can be used in conjunction with the other documents to provide a comprehensive cross reference for each existing DTC file. The spreadsheet format is designed as a reference tool to easily search and filter the data contents. The Message Implementation Guide is a document allowed by the ISO 20022 standard but not part of the official registration process. It describes how one or more messages are to be used in the context of a specific business context (i.e. community of users). DTCC has prepared a MIG detailing how each ISO 20022 message and the supplementary data structures are to be used. Finally, the ISO 20022 Message Definition Reports for variant II ISO 20022 MX messages (15022 compatible subsets) are available on www.swift.com for every ISO 20022 message.

4.2 Corporate Action Events Dictionary

The Corporate Action Events Dictionary compares high level data about event types across the new model, the existing DTCC model and ISO.

Data is arranged in the spreadsheet in groups. The new DTCC data model: • Event Name: the event name from the new model; • Sub Event Name: the sub event name from the new model; • Mandatory / Mandatory with Options / Voluntary Indicator – Issuer: the nature of the event at the

issuer • Mandatory / Mandatory with Options / Voluntary Indicator – DTC: the nature of the event at DTC. DTC Legacy Data Model (not applicable to GCA VS clients): • DTCC Event Group: the event group (distribution, redemption, reorganization); • Function Code / Activity Code: the DTCC function code or activity code; • Function Code Name / Activity Code Name: the DTCC function code name or activity code name. ISO model: • Event Code: the ISO event code; • Additional Indicator on the message: an additional indicator in the extension structure where

necessary to distinguish the event type; • Event Processing Type: the ISO event processing type (general, distribution, reorganization); note

that this is different from the DTCC classification: an ISO reorganization incorporates both DTCC redemption and DTCC reorganization;

• Extended (DTCC) Event Type: the DTCC event type, carried in the extension structure for additional granularity;

• Extended (DTCC) Sub EventType: the DTCC sub event type, carried in the extension structure for additional granularity;

• Extended EventGroup: the DTCC event group, carried in the extension structure for additional information;

• SMPG EIG Compliance: an indication of how well the new event model complies with the Event Interpretation Grid formulated by the Securities Market Practice Group (SMPG). The EIG has both a global flavor and a national flavor if that is different from the global.

4.3 Corporate Action Event Scenarios

Within the Corporate Action Event Scenario zip file, information for each event type scenario is presented in a common format. The following section explains what information will be provided per column heading. A separate comment section following the detailed scenarios may exist to further explain specific details that are not comprehensive within the column headings or values therein.

4.3.1 Event Type

• Scenario: Identifies the event and any additional explanation to assist in differentiating this scenario

from another.

• Event Type: <New Data Model> identifies the new event name as defined within the published “Corporate Action Events Dictionary”. The ISO codes that will be used are presented. ‘OTHR’ will be used where DTC presents an event type that is not within the ISO standard.

• Sub Event Type: <New Data Model> identifies the new sub event type’s name as defined within the published “Corporate Action Events Dictionary”. The sub event type is a further classification of the event which provides a more granular definition of corporate action. This information is in the event level.

• GCA Event Type: <New Data Model> provides the event type that is announced by GCA VS for the particular scenario. The ISO 15022 codes that are currently used are presented.

• GCA Sub Event Type: <Legacy Data Model> provides the current sub event type (CA Classification) that is announced by GCA VS for the particular scenario.

4.3.2 Nature of the Event and Option Type

• Mandatory / Mandatory with Options / Voluntary Indicator - Issuer/DTC: <New Data Model>

indicates the nature of the event. A value of Mandatory indicates that holders do not have any options or elections to submit. A value of Voluntary indicates that the event requires client instruction in order to participate in the event. A value of Mandatory with Options indicates that though the event is mandatory, clients have been afforded options to choose from. Where the value is Mandatory with Options, a default option will be selected which will be the resulting option for those holders that do not submit instructions. o Issuer: This value represents how the event is announced in the market and how it should be

treated following ISO standards. o DTC: This value represents how the event is being handled by DTC as the custodian for the

corporate action. In some cases, DTC may differ from how the issuer represents an event due to the number of options supported and/or additional services provided. • Option Type: <New Data Model> identifies the option(s) expected to be used for a specific

event/scenario. The ISO codes that will be used are presented. • Description: Provides a description of the option to provide clarity in addition to the ISO code. • GCA Option Type: <Legacy Data Model> provides the option type that is announced by GCA VS for

the particular scenario. The ISO 15022 codes that are currently used are presented.

4.4 Default Option

• GCA Default: <Legacy Data Model> Provides the current default setting for the option as it is applied to

the existing GCA VS announcement record. (Old Data Model represented)

• Option Declared - Issuer/DTC: <New Data Model> Identifies which entity will support the specific option. o Issuer: This value represents whether or not the option is announced by the Issuer. o DTC: This value represents whether or not the option is being processed by DTC as the custodian.

• Default Option Flag - Issuer/DTC: <New Data Model> Identifies which option will be the default in the

scenario. If the security holder does not take any action on the event, the default option will be the resultant disbursement for the holder. o Issuer: This value represents whether or not the option is the default option of the event as

announced by the Issuer. o DTC: This value represents whether or not the option is the default action for DTC processing.

All ’Mandatory’ and ‘Mandatory with Option’ events will require a ‘default option’ to be present to indicate which option will be given to the holder in absence of an election. Though there are cases when DTC’s default option is different, in most cases, DTC will provide the Issuer’s default as its own.

4.4.1 Payout Details & DTC Legacy values

• Payout Type: <New Data Model> The payout type used to further define the entitlement received by

the security holder.

• GCA Payout Type: <Legacy Data Model> Provides the payout type that is announced by GCA VS for the particular option of the event scenario. The ISO 15022 codes that are currently used are presented.

• DTC Function/Activity Code: <Legacy Data Model> Provides the specific mapping to existing DTC

legacy files. In some cases the DTC mapping is not at the event level but rather at the option and even payout levels.

• DTC Sequence #: <Legacy Data Model> Provides further granularity to assist mapping where options

and/or payouts are the same.

4.4.2 Use of data provided

Though in many cases, the default option is defined within the scenario itself, there are situations for which the default option as defined by either DTC or the issuer can vary based upon the specific corporate action. In such cases, the value will be populated with “TBD”. This indicates that the default is defined within the offering documentation and is not predetermined by the scenario. Additionally, default values shown in some cases are not an absolute. Though this is the typical corporate action as described in the scenario section, the default here may not always be the case. This information is provided as reference and should not be used to map values. The information included in orange represent ISO values. Where the new data model <New Data Model> is represented the value can be found in the ISO 20022 specification documents. Where the GCA VS data model is referenced <Legacy Data Model>, the values presented reflect the current ISO 15022 values that are populated in the existing legacy 15022 GCA VS messages. The information represented here is for reference. Please refer to the specification documentation for specific mapping. Throughout many of the reorganization type events, the 93 (Corporate Action) and 52 (Tender) Activity Codes are prevalent. Data elements will contribute to the differentiation between when a 93 envelope can be determined to be one event type versus another. The Offer Type data element currently residing on the 52 envelope contributes specifically to the differentiation of the tender offer event types. That in conjunction with other data elements determines the relationship to the new event based data model. These other indicators/triggers are not included here as the data element in question varies per event and is particularly granular in nature. In some cases it is information not currently published on the existing legacy CCF files.

4.5 Corporate Action Data Elements Dictionary

The Corporate Action Data Elements Dictionary provides a comprehensive list of data elements, and compares the metadata for each element across the new model and GCA VS. From the new model: • Level: an indication of the level of the data within the announcement message (event, option, payout); • Data Element Name: the name of the data element; • Description: a description of the data element; • Data Type: the data type for the element, such as date, decimal; • Valid Values: where relevant, a list of valid values for the element. From the legacy model: • Dividends: whether the data element is relevant to the DTC dividend/distribution domain; • Reorganization: whether the data element is relevant to the DTC reorganization domain; • Redemptions: whether the data element is relevant to the DTC redemption domain. From GCA VS: • Level: the data level in the GCA VS messages; • Element Name: the element name in GCA VS. New ISO 20022 message considerations: • Additional Details to ISO Association Rule: rules or notes to aid in mapping the data element from

legacy to ISO; • CANO MARKET: where the element can be found in the CANO message Market product mapping;

• CANO MARKET EXTENSION: where the element can be found in the CANO message Market product mapping extension;

• CANO CSD: where the element can be found in the CANO message CSD product mapping; • CANO CSD EXTENSION: where the element can be found in the CANO message CSD product

mapping extension; • SERVICE EXTENSION: where the element can be found in the CANO message service extension; • DERIVATIVE EXTENSION: where the element can be found in the CANO message derivative

extension; • CUSTODIAN EXTENSION: where the element can be found in the CANO message custodian

extension.

4.6 Legacy Mapping Spreadsheet

The Legacy Mapping spreadsheet contains the following columns: • Field Name: The field name from the legacy file documentation. • Field Description: The description of the legacy field. • CA Data Element Name (Original): The Corporate Action Data Element Name from the initial

publication. • CA Data Element Name (2007): The Corporate Action Data Element Name from the previous

publication in 2007. • CA Data Element Name (2010): The Corporate Action Data Element Name from the current

publication in the New Event Model. • Status: The status of the legacy field mapping.

o Active - CCF field is mapped o Added - CCF field mapping is added since previous review o Deleted - CCF field mapping is removed since previous review o Not Supported - CCF field is not mapped

• Comments: Any additional information pertaining to the mapping of that legacy field.

4.7 Message Implementation Guide (MIG)

The reengineering project will implement a specific subset of the ISO 20022 schemas. DTCC has created additional restrictions to the ISO subset schema (which is already a ‘subset’ schema since it reflects the restrictions imposed by the ISO 15022 coexistence rules). DTCC has prepared a Message Implementation Guide to provide details for its participants and clients on the usage of the ISO 20022 message schema and supplementary data schemas.

The message guidelines and schemas provide details of the ISO 20022 message implementation by DTCC. They should be read in conjunction with the Message Definition Report for ISO 20022 MX messages Variant II (15022 compatible subset) available from www.swift.com. The Message Implementation Guide can be used to cross reference ISO 20022 components with their DTCC name. All DTCC element names, definitions and usage rules listed in the dictionary are noted with its ISO element in this document. Each MIG document defines the DTCC implementation of one message schema. The document is split into three sections:

• Structure – providing high level outline of the components; • Guideline – providing element attributes, DTCC Name, Definition, Usage Rules; • Components – technical definition of XML message components.

ISO 20022 Message Specifications for Announcements For announcements there is a separate set of documents for each subscription package (see section 2.5.1 for packages) consisting of: • Standard message (MIG), a schema usage document listing the subset of the elements within the

message implemented by DTCC. Example: CorporateActionNotificationV02_CSDSubset.pdf • Message supplementary data (extension(s)) schema (MIG), a schema usage document that sets out

the message components in the extension schema. Example: CorporateActionNotificationV02_CSDExtension.pdf

• Extension implementation schema(s) (the .xsd file(s)). • Business Application Header schema usage document (MIG). These corporate action announcement messages cover the following corporate action activities: • Corporate action event announcements (for preliminary, updated, and confirmed events). • Corporate action cancellation (for cancelled or deleted events)

ISO 20022 Message Specifications for Lifecycle Processing and Elections For the remainder of the lifecycle, the document sets in a similar set to announcements: • Standard message (MIG), a schema usage document listing the subset of the elements within the

message implemented by DTCC. • Message supplementary data (extension(s)) schema (MIG), a schema usage document that sets out

the message components in the extension schema. • Extension implementation schema(s) (the .xsd file(s)). • Business Application Header schema usage document (MIG). There are no DTC / Market product distinctions, as messages service DTC processes.

The following table provides a summary cross reference between the ISO 20022 lifecycle messages and the activities:

4.8 Message Definition Report (MDR)

Finally, the ISO 20022 website contains the Message Definition Report for every published ISO message. The Message Definition Report for corporate actions messages provides information about the announcement message as well as lifecycle messages, in one document. The MDR can be found on www.swift.com

4.9 How to Use Supporting Documentation

To determine the mapping of a legacy file field to the corresponding ISO message type, field and tag, use the value from the CA Data Element Name (2010) and cross-reference this value with the same data element name in the Corporate Actions Data Element Dictionary. The Corporate Actions Data Element Dictionary provides the corresponding ISO message type, field and tag in the Corporate Actions ISO Message Specifications, which represents the ISO message standards used to communicate with DTCC.

For Example, to find the corresponding ISO 20022 message path, extension, field or XML tag for the data field ‘Ex-Dividend Date’ in the legacy CCF file DIVANN:

1. Open a Legacy mapping spreadsheet (Ex: Divann)

2. Go to Legacy mapping tab (Ex: Divann), retrieve the ‘CA Data Element Name (2010)’, which is Ex-

Date.

3. To look-up ISO 20022 Path and Extension, cross reference this same value, Ex-Date, in the Corporate

Actions Data Element Dictionary ‘Data Element Name’ column.

The path value is detailed in the ‘Path’ column, and the value is CorporateActionDetails/DateDetails/ExDividendDate

The extension value, when applicable, is detailed in the ‘Extension’ columns. In this instance, it is blank because this data element is not a DTC specific data element.

4. To look-up ISO Field Name, and XML Tag, cross reference this same value, Ex Date, in the Message Implementation Guide or the Message Definition report.

In this instance, the ISO Field Name is ExDividendDate, and the XML tag is ExDvddDt

5 Onboarding: How to get started

5.1 Contact Information

Participants and interested firms should contact their Relationship Manager to inquire about adopting ISO 20022, or use the following CA Reengineering mailbox: [email protected] Clients and prospective clients may also contact Roxana Argintescu via email at ([email protected]), Robert Epstein via email at ([email protected]) or Joyce Rosen via e-mail at ([email protected]).

5.2 Network Considerations

As previously noted, messages will be transported using one of the two networks: • DTCC’s existing SMART channels

o MQ (currently available) o NDM (available in 2012) o File (available in 2012)

• SWIFT o InterAct Store and Forward (currently available) o FileAct (available in 2012)

The process of choosing and implementing a network to receive ISO 20022 messages can take several months and should be one of the client’s first considerations. SMART Participants and interested firms considering using the SMART network should contact their DTCC Relationship Manager to determine if they have a SMART circuit in place currently. If so, DTCC will perform bandwidth utilization studies on the current lines to determine if an upgrade to a larger circuit is necessary. There is no cost for transmitting messages via SMART, but customers do have to pay for the circuit itself. Pricing – which is a direct pass-through from the telephone company servicing the line – is fixed based on circuit size. SWIFT Participants and interested firms considering the SWIFT network should contact their SWIFT Relationship Manager for provisioning and pricing details. Ultimately, these communication methods will allow GCA VS clients to benefit from: • Increased availability and timeliness for corporate actions data: Customers will benefit from the

enhanced processing engine that allows for CA messages to be updated and published throughout the day. Updates will be applied to existing events at intervals for dissemination.

• Subscriptions: Subscription options exist for three main event groups: Distributions, Reorganizations

and Redemptions. Within each event group, participants will be able to choose to receive messages intra-day or end of day using various message protocols, depending on the criticality of the event. Addition information can be found in Section 2.5.1.

• Participants and interested firms should also consider the different messaging subscription

options, or “packages” (i.e. CSD vs. Market), highlighted in section 2.3 of this document.

5.3 ISO 20022 Mapping

While considering a network and a protocol to receive ISO 20022 messages, participants and interested firms should use this guide and the documentation found at www.dtcc.com/careengineering to begin the data mapping process. The new data model and the new ISO 20022 standard will make mapping a necessity and, depending on the level of knowledge of ISO 20022, can take several months. By reviewing

this migration guide and the detailed mapping documentation, clients can familiarize themselves with the new data model and the ISO 20022 standard.

5.4 Client Support

DTCC’s CA Reengineering Team will provide support throughout the mapping and on-boarding process and clients will be able to work with their respective relationship and product managers to ensure a smooth adoption to this new standard. The process of mapping, choosing a network and on-boarding can be done in parallel so as to reduce the time needed to fully adopt and migrate away from CCF legacy files.

6 Appendix A: DTCC Implementation of ISO 20022 This Appendix contains additional detail that may assist Participants and clients in implementing the ISO 20022 messages. It covers the following aspects:

• Message Flows • DTCC Naming Conventions • DTCC Supplementary Data (Extensions) • Notation

6.1 Message Flows

The proposed message flows for both elective events and non-elective (mandatory) events is summarized in the two pictures below: Non-Elective events (Mandatory):

Elective events (Voluntary, Mandatory with Options):

6.2 DTCC Naming Conventions

DTCC native data element names (located in the ISO message as DTCC Name, and in the extension component as component name) differ from ISO names as standard element names that usually are defined broader for more general interpretation. Object and Actor names like Issuer, Offeror, Event, Option are capitalized. Element names prefixed with DTCC, DTC or Declared or suffixed with Indicator or Flag have special meanings: • Prefixed with ‘DTC’: Specific to DTC (the depository core services) is relevant to the core DTC

system and it Participants. In most cases denotes difference between ‘DTC field’ and ‘Issuer field’ (noted as “declared”) e.g. Declared Cash Rate (cash rate as issuer has declared) and DTC Cash Rate (DTC cash rate that DTC will distribute, which can be different from the Issuer declared rate on the same event).

• Prefixed with ‘Declared’: Specific naming to denote the difference between ‘DTC’ and ‘Issuer’ fields (noted as “declared”). Please refer to the example in paragraph above.

• Suffixed with ‘Flag’: Used when the permissible values for the element are ‘Yes’ or’ No’. For an example: Withdrawal Privilege Flag (ISO WithdrawalAllowedIndicator element) can only have ‘Yes’ or ‘No’ value.

• Suffixed with ‘Indicator’: Used when permissible values for the element are a restricted set. For an example: Recycle Cutoff Indicator (defined in extension message as RecycleCutoffIndicator) can only have three possible values (Anticipated Early Cutoff, Early and Late).

6.3 Supplementary Data (Extensions)

As noted in section 2.1, the DTCC implementation of ISO 20022 will make use of an ISO 20022 concept of supplementary data, also called ‘extensions’.

Certain DTCC corporate actions elements are not covered by the standard ISO messages. These elements have been defined as part of the project, and will be implemented using the supplementary data components. The data fields within the supplementary data have been modeled using the ISO 20022 principles and will reside in the ISO 20022 data dictionary. DTCC extension elements are grouped into blocks of related data, based on the intended destination of that group of elements. Physically the extension data is found towards the end of the message with notations to indicate to which ‘core’ data the extension data is related. The extension block uses a PlaceAndName element which will be populated with the destination XPath. The extended elements are defined as optional in the model, meaning they will be used (populated with values) as necessary. For example: CorporateActionRateAndAmountDetails extension message component will be extending three elements: • DeferredInterestRate • InterestShortFall Rate • RealisedLossRate Message Element Place and Name will be populated with value: CorpActnNtfctn\ CorpActnDtls\ RateAndAmtDtls Other message elements will be populated with values if they are available but at least one to be extended value must be available to use as extension message component. When extending to repeatable ISO components the XPath notation with the array order [n] must be used, e.g. CorpActnNtfctn\ CorpActnOptnDtls[1]\ SctiesMvmntDtls[2] The diagram below shows how the extension component is embedded using the ExtensionEnvelope.

6.4 Notation

The following labels are used to identify the attributes displayed in the specifications: • Multiplicity: Standard UML notation signifying correlation of the element to the instance of a corporate

action. ..1. 0…1 – element occurs zero or one times ..2. 1…1 - element occurs one time ..3. 1…* - element occurs one or many times ..4. 0…* - element occurs zero or many times

• XML Tag: Standard ISO XML tag • Type: Standard ISO data type (ISO data types can be complex and consist of another component) • Length: Length of the field (when applicable). • ISO Name: Standard conventional ISO element name • ISO Definition: Standard ISO Definition of the item. • DTCC Name: DTCC used name for the item. • DTCC Definition: DTCC definition for the item. • DTCC Usage Rule: Rule defining how to use the item when reading the message. • DTCC Implementation Rule: Rule defining how to create and to write the message.

7 Appendix B: Sample ISO 20022 Messages

7.1 Announcement Example -‐ Tender Offer

<AppHdr xmlns="urn:iso:std:iso:20022:tech:xsd:head.001.001.01" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"> <Fr> <FIId> <FinInstnId> <BICFI>FROMBICTEST</BICFI> </FinInstnId> </FIId> </Fr> <To> <FIId> <FinInstnId> <BICFI>TOBICTEST11</BICFI> </FinInstnId> </FIId> </To> <BizMsgIdr>2011092914502392</BizMsgIdr> <MsgDefIdr>seev.031.002.02</MsgDefIdr> <BizSvc>CSD</BizSvc> <CreDt>2011-09-29T18:50:23Z</CreDt> </AppHdr> <Document xmlns="urn:swift:xsd:seev.031.002.02" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"> <CorpActnNtfctn> <NtfctnGnlInf> <NtfctnTp>NEWM</NtfctnTp> <PrcgSts> <EvtSts> <EvtCmpltnsSts>COMP</EvtCmpltnsSts> <EvtConfSts>CONF</EvtConfSts> </EvtSts> </PrcgSts> </NtfctnGnlInf> <CorpActnGnlInf> <CorpActnEvtId>52354307</CorpActnEvtId> <OffclCorpActnEvtId>US52354307</OffclCorpActnEvtId> <EvtPrcgTp> <Cd>REOR</Cd> </EvtPrcgTp> <EvtTp> <Cd>BIDS</Cd> </EvtTp> <MndtryVlntryEvtTp> <Cd>VOLU</Cd> </MndtryVlntryEvtTp> <UndrlygScty> <SctyId> <OthrId>

<Id>52520KUQ8</Id> <Tp> <Cd>CUSP</Cd> </Tp> </OthrId> <Desc>LEHMAN BROTHERS CD ON A BASKET OF BRIC EQUITIES AND CURRENCIES</Desc> </SctyId> <ClssfctnTp> <ClssfctnFinInstrm>DYXXXX</ClssfctnFinInstrm> </ClssfctnTp> </UndrlygScty> </CorpActnGnlInf> <AcctDtls> <ForAllAccts> <IdCd>GENR</IdCd> </ForAllAccts> </AcctDtls> <CorpActnDtls> <DtDtls> <UcondlDt> <Dt> <Dt>2011-08-31</Dt> </Dt> </UcondlDt> </DtDtls> <SctiesQty> <MinExrcblQty> <FaceAmt>1000</FaceAmt> </MinExrcblQty> <MaxQty> <FaceAmt>140000</FaceAmt> </MaxQty> </SctiesQty> <AddtlInf> <Offerr> <AddtlInf>WOODLANDS COMMERICAL</AddtlInf> </Offerr> </AddtlInf> </CorpActnDtls> <CorpActnOptnDtls> <OptnNb>999</OptnNb> <OptnTp> <Cd>NOAC</Cd> </OptnTp> <OptnFeatrs> <Cd>NOSE</Cd> </OptnFeatrs> <DfltPrcgOrStgInstr> <DfltOptnInd>true</DfltOptnInd> </DfltPrcgOrStgInstr> <AddtlInf> <NrrtvVrsn> <AddtlInf>CO</AddtlInf> </NrrtvVrsn> </AddtlInf> </CorpActnOptnDtls> <CorpActnOptnDtls> <OptnNb>001</OptnNb> <OptnTp>

<Cd>CASH</Cd> </OptnTp> <DfltPrcgOrStgInstr> <DfltOptnInd>false</DfltOptnInd> </DfltPrcgOrStgInstr> <SctyId> <OthrId> <Id>52599ANE1</Id> <Tp> <Prtry>XX</Prtry> </Tp> </OthrId> <Desc>LEHMAN BROTHERS BANK</Desc> </SctyId> <DtDtls> <MktDdln> <Dt> <DtTm>2011-09-28T17:00:00-04:00</DtTm> </Dt> </MktDdln> <RspnDdln> <Dt> <Dt>2011-09-28</Dt> </Dt> </RspnDdln> </DtDtls> <CshMvmntDtls> <CdtDbtInd>CRDT</CdtDbtInd> <DtDtls> <PmtDt> <DtCd> <Cd>ONGO</Cd> </DtCd> </PmtDt> </DtDtls> <PricDtls> <GncCshPricRcvdPerPdct> <AmtPricPerFinInstrmQty> <AmtPricTp>ACTU</AmtPricTp> <PricVal Ccy="USD">1300</PricVal> <FinInstrmQty> <FaceAmt>1000</FaceAmt> </FinInstrmQty> </AmtPricPerFinInstrmQty> </GncCshPricRcvdPerPdct> </PricDtls> </CshMvmntDtls> <AddtlInf> <NrrtvVrsn> <AddtlInf>Holders will receive USD 1300.00 for every USD 1000.00 Certificate of Deposit surrendered.</AddtlInf> </NrrtvVrsn> </AddtlInf> </CorpActnOptnDtls> <AddtlInf> <NrrtvVrsn> <UpdDt>2011-09-27</UpdDt> <AddtlInf>08 30 11: PARTICIPANTS MUST OBTAIN THE OFFER TO PURCHASE DATED 08 30 11, FOR COMPLETE TERMS AND CONDITIONS OF THE OFFER. THE TELEPHONE NUMBER FOR THE

INFORMATION AGENT IS: (212) 430-3774, OR (866) 873-6300. 09 01 11: PARTICIPANTS MUST OBTAIN THE OFFER TO PURCHASE DATED 08 30 11 FOR COMPLETE TERMS AND CONDITIONS OF THE OFFER. WOODLANDS COMMERCIAL BANK (FORMERLY KNOWN AS LEHMAN BROTHERS COMMERCIAL BANK) (THE BANK ) IS AN INDUSTRIAL BANK REGULATED BY THE UTAH DEPARTMENT OF FINANCIAL INSTITUTIONS AND BY THE FDIC. THE BANK IS MAKING AN OFFER (THE OFFER ) TO PURCHASE ANY AND ALL OUTSTANDING CERTIFICATES OF DEPOSIT LISTED IN THE TABLE ON THE FRONT COVER OF THE OFFER TO PURCHASE (COLLECTIVELY, THE CERTIFICATES OF DEPOSIT ) FROM EACH REGISTERED HOLDER OF A CERTIFICATE OF DEPOSIT (A HOLDER ). THE PURCHASE PRICE FOR THE CERTIFICATES OF DEPOSIT TENDERED AND ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER WILL BE 100PCT OF THE PRINCIPAL DEPOSIT AMOUNT OF EACH CERTIFICATE OF DEPOSIT, I.E., USD1,000PEREACH USD1,000 CERTIFICATE OF DEPOSIT, PLUS AN AMOUNT EQUAL TO 6PCT PER ANNUM, MEASURED FROM THE ORIGINAL DATE OF ISSUANCE THROUGH THE STATED MATURITY DATE. NO ACCRUED INTEREST WILLBE ADDED TO THE PURCHASE PRICE. BY ACCEPTING THE OFFER AND UPON RECEIPT OF THE PURCHASE PRICE ON THE SETTLEMENT DATE, TENDERING HOLDERS WILL THEREBY GIVE UP THE RIGHT TO SUPPLEMENTAL OR ADDITIONAL AMOUNTS, IF ANY, THAT WOULD BE PAYABLE IF THE CERTIFICATES OF DEPOSIT WERE HELD TO MATURITY. TENDERS OF CERTIFICATES OF DEPOSIT WILL BE ACCEPTED ONLY IN PRINCIPAL DEPOSIT AMOUNTS EQUAL TO USD1,000 OR INTEGRAL MULTIPLES THEREOF. THERE IS NO WITHDRAWAL RIGHTS NOR GUARANTEE OF DELIVERY (PROTECT) PRIVILEGE AFFORDED THIS OFFER. PARTICIPANTS SHOULD CONSULT THEIR TAX ADVISOR FOR COMPLETE DETAILS IN REFERENCE TO WITHHOLDING TAXES. THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE, UNLESS EXTENDED.</AddtlInf> </NrrtvVrsn> <InfConds> <UpdDt>2011-08-31</UpdDt> <AddtlInf>The Offer: The company is offering to purchase all of the outstanding Certificates of Deposit at the purchase price. Tenders of Certificates of Deposit will be accepted only in principal deposit amounts equal to USD 1000 or integral multiples thereof. No accrued interest will be added to the purchase price. There is no guarantee of delivery or withdrawal privilege afforded this offer.</AddtlInf> </InfConds> </AddtlInf> <SplmtryData> <Envlp> <Document xmlns="urn:swift:xsd:supl.001.001.02" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"> <DTCCCANOCSDDataSD1> <NtfctnGnlInfXtnsn> <PlcAndNm>/Document/CorpActnNtfctn/NtfctnGnlInf</PlcAndNm> <CretDtAndTm>2011-08-30T15:32:22</CretDtAndTm> <UpdDtAndTm>2011-09-29T14:50:07</UpdDtAndTm> </NtfctnGnlInfXtnsn> <UndrlygSctyXtnsn> <PlcAndNm>/Document/CorpActnNtfctn/CorpActnGnlInf/UndrlygScty</PlcAndNm> <CtryOfListg>US</CtryOfListg> <DTCAsstClss>CRPB</DTCAsstClss> <DTCAsstTp>S507</DTCAsstTp> </UndrlygSctyXtnsn> <CorpActnDtlsXtnsn> <PlcAndNm>/Document/CorpActnNtfctn/CorpActnDtls</PlcAndNm> <DTCAutomtdOfferPrgm>ONLN</DTCAutomtdOfferPrgm> </CorpActnDtlsXtnsn> <CshMvmntDtlsXtnsn> <PlcAndNm>/Document/CorpActnNtfctn/CorpActnOptnDtls[2]/CshMvmntDtls[1]</PlcAndNm> <DclrdCshRate> <Amt Ccy="USD">1300</Amt> </DclrdCshRate>

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One giant leap fOr DtCC anD isO 20022by patriCk barthel

In November 2011, The Depository Trust and Clearing

Corporation (DTCC) will roll out their new ISO

20022-compliant messaging system. The new system will

change the way the financial industry receives corporate

actions announcement information. This will mark the

beginning of a multi-year, phased effort to transition the

United States financial community to ISO 20022 messages for

corporate actions processing.

DTCC plays a critical role in supporting the post-trade

infrastructure for the United States financial market. At the

end of 2010, DTCC, through its subsidiaries, held in custody

approximately 85 to 90 percent of all equity, municipal bond,

and corporate bonds in the United States worth more than

$36.5 trillion. While most investors might assume that the

securities they own are held by their brokers or banks, they

are, in fact, held by the Depository Trust Company (DTC) and

registered in the name of Cede & Company, the nominee

name of DTC. That fact gives DTCC specific responsibilities.

Whenever a corporate action takes place – i.e., a dividend is

paid on a stock, interest is paid on a bond, or there is a stock

split, merger, spin off, etc. – most of the money, securities or

information goes to DTCC. DTCC must then ensure that the

correct amount of money is disbursed to the various brokers

and banks, which are, in turn, responsible for distributing

those entitlements to the investors. Millions of corporate

actions take place each year in the United States involving

trillions of dollars, and virtually all of those corporate actions

are processed at DTCC.

Several years ago, DTCC decided to look at the legacy systems

it used to process corporate actions. Since there was not one

central system in place, but rather many different systems,

each with its own process and protocol, DTCC focused

on uniting all corporate actions processing into a single

system that would allow for a more efficient handling and

processing of corporate actions. As the analysis progressed,

DTCC also noted that a new, more flexible message system

was needed in order to communicate with the brokers and

banks who were members of DTCC’s clearing agencies. The

new standard selected was ISO 20022.

Since the creation of DTCC’s depository in 1973, it has

utilized its own proprietary formats for corporate actions

processing. So, why switch to an international standard, and

why ISO 20022? DTCC recognized that it needed to respond

to an ever-changing environment and needed to be able

to accommodate what was becoming a global investment

business. DTCC’s customers, which include the largest banks

and brokerage firms in the United States, had expanded their

businesses throughout the world and wanted to streamline,

as much as possible, the standards and formats used to

communicate. ISO 20022 meets those needs and offers a host

of benefits.

ISO 20022 is flexible, both in terms of its content and

tailoring of output. As new corporate actions are developed,

the messaging system can change to meet the demands

of the business, not the other way around. In addition,

ISO 20022 is XML-based, which allows for easier and more

efficient yearly maintenance, and the messages themselves

carry with them a schema that is used to confirm that each

data element is populated with a valid value.

There are also several business benefits that DTCC and its

customers will derive from the ISO 20022 standard, not the

least of which will be greater straight through processing due

to the fact that corporate action events will be announced

using a data model that conforms to market practice. As part

of the new data model, DTCC will be providing a unique

Corporate Action ID for each event, which can be tracked

through the life cycle of the event – from announcement, to

election, entitlement, and payment. DTCC’s new data model

also will include a more comprehensive and granular number

of data elements that will allow for greater accuracy and,

ultimately, less processing risk on the part of the customers.

In developing data fields for U.S. and global corporate actions,

DTCC worked closely with SWIFT, ISO 20022’s registration

Reprinted from ISO 20022 Newsletter, Winter 2011

authority. DTCC then worked with the Securities Markets

Processing Group (SMPG) and the International Securities

Association for Institutional Trade Communication (ISITC)

to develop proposals for changes to the ISO 20022 standards

as it related to corporate actions, which were reviewed and

approved by the Securities Standards Evaluation Group,

a group of international industry experts who accept or

reject changes to the ISO 20022 standard during the annual

maintenance process.

One of the key components in preparing to roll out the DTCC

message system has been a six month pilot testing program

– performed with four of DTCC’s customer firms – of the

new ISO 20022 messages for corporate announcements. That

testing has been performed with four of DTCC’s customer

firms. The extensive testing period has used production-like

data to provide a complete shake out of the new fields and of

the standard overall, before it goes live in November 2011. In

addition to testing the new ISO 20022 messaging standard,

the pilot firms also have been utilizing a new browser-

based user interface, which is critical to the gathering and

dissemination of data and how customers will elect to

process events in the next phase of the project.

The testing period also allowed DTCC to address one

of the key issues in disseminating corporate actions

announcements. These announcements have typically been

made in paper documents. The critical details of those

paper documents had to be determined by each individual

financial firm and then transmitted to their customers. The

risk was that those documents – many of which could run

dozens or even hundreds of pages – had to be interpreted and

rekeyed, which created a substantial risk for error. Following

the SEC’s recent mandate that issuers begin using what is

known as eXtensible Business Reporting Language (XBRL)

to electronically tag financial data, (not including corporate

actions), DTCC proposed that XBRL be extended to cover

corporate actions announcements. DTCC then proceeded to

map XBRL data fields for corporate actions to those it had

developed for ISO 20022.

While a significant step, the implementation of ISO 20022

for corporate actions announcements in November is only

the beginning of the process. In 2012, DTCC will begin a

pilot program for firms to send messages for the life cycle

of election processing and entitlements. Those are messages

that brokers and banks send to DTCC to allow them to do

things such as select an option on a dividend or elect a

dividend reinvestment program, or DRIP.

Ultimately, DTCC will support only ISO 20022 messages for

corporate actions processing, as the legacy systems and older

processes are phased out over the next several years.

“Corporate actions processing is a critical function for DTCC

and the participants it services,” said Dan Thieke, DTCC Vice

President for Asset Services. “We’ve elected to take a phased

approach to reengineer our data delivery systems, as well as

our new user interface. Doing so allows us to reduce risk by

testing thoroughly, and making sure we have a solid, error-

free capability before transitioning our participants to ISO

20022.”