DRS Guidelines Committee Update

1
DRS Guidelines Committee Update

• STA Annual Conference
• October 20th, 2006
• Katie Sevcik

2
DRS Enhancements

• Recent DRS Enhancements
• Pending DRS Enhancements
• How will agents/issuers get paid for these
  enhancements?

3
Recent Enhancements

• Addition of a second TIN/SSN field for matching
• Excess Medallion Coverage DTCCs new insurance
  program
• Increases coverage from 3 million to 25 million
  per transaction
• Allows brokers to pay per transaction

4
Pending DRS Initiatives

• Move all book-entry shares, sell fractional
  shares, and close the registered account
• High level scenarios/workflows complete
• DTCC is currently documenting the detailed
  specifications
• Industry would like programming to be completed
  in 2007

5
Pending DRS Initiatives

• Restricted DRS shares
• Identifying legends
• Broker/bank regulations good control location
• October 2006 industry meeting
• Gifting DRS shares
• Corporate Action Processing
• Commingling of DRS and plan shares
• Registration concerns for 401k plan distributions

6
How do TAs pay (or get paid) for all these
enhancements?

• To date agents/issuer agents are incurring the
  costs
• for development
• for on-going costs
• AND for each transaction

7
Future Enhancements?

• DTCC to charge participants for move all, sell
  fracs, close account development
• 2-year cost recovery to agents
• Debate on whether issuers should be paying for
  further enhancements
• If yes, SEC will need to require issuers - new
  regulation

8
Thank You

• Questions and Answers