THE FIA IT DIVISION PRESENTS

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THE FIA IT DIVISION PRESENTS

• REDUCING TRADING COSTS
• A PANEL DISCUSSION
• Moderated By
• 2003 FIA Expo Tellefsen
  Consulting Group, Inc.

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AGENDA

• I. Purpose and Scope of the Discussion
• II. About Our Panelists
• III. FIA IT STP Committee Initiatives
• IV. What Our Panelists Think

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I. PURPOSE AND SCOPE OF THE DISCUSSION

• Purpose
• To discuss areas within the Futures industry
  where Straight-Through Processing (STP)
  improvements can be realized, as a result of
  recent and forthcoming initiatives by the Chicago
  and New York exchanges and clearing houses.

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Purpose And Scope

• Scope
• Our panelists will discuss the new system
  initiatives, post-trade processing standards, the
  availability of more real time clearance and
  settlement information and the overall impact on
  reducing trading costs.

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II. ABOUT OUR PANELISTS

• Dick Baker
• Director of Business Development and IT Liaison,
  The Clearing Corp.
• Sam Gaer
• Chief Information Officer, New York Mercantile
  Exchange
• Inna Gelin
• Senior Vice President, Wachovia Securities
• Ed Gogol
• Vice President Clearing Systems Development,
  Chicago Mercantile Exchange
• George F. Haase, Jr.
• President, New York Clearing Corp.
• Angela Krug
• U.S. Regional Manager, Futures Options
  Technology, Deutsche Bank Securities
• John Munro
• Senior Vice President, Product Design, Rolfe
  Nolan
• Thomas MacLeay
• Senior Vice President, Strategic Development,
  Sungard Futures
• John Rapa
• President/Chief Executive Officer, Tellefsen
  Consulting Group, Inc.

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III. FIA IT STP COMMITTEE INITIATIVES

• The IT Division STP Committee was constituted
  earlier this year to identify the state of STP
  initiatives in the Futures industry.
• The Committee was chaired by Inna Gelin and Rob
  Schroeder, both from Prudential Securities.
• The Committee analyzed the state of automation
  and recommended areas of changes to processes
  that impede STP.

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FIA IT STP COMMITTEE INITIATIVES

• The Committee assessed six major processes
  involved in domestic Futures trading
• Trade Entry
• Product Set Up
• Trade Correction
• Give-Up Processing
• Deliveries, Options Exercise and Assignment
• Post-Execution Processing
• They identified and discussed detailed functions
  for each of the above 6 areas.
• Processes were analyzed and STP status was
  assessed, based on manual, semi-automated or
  fully automated processing criteria.
• Charts were created that reflect the state of
  automation by process (June 2003).

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FIA IT STP COMMITTEE INITIATIVES

• Charts of STP capabilities were developed for
• CBOT
• CME
• NYBOT
• NYMEX/COMEX
• Three main areas for improvement were
  prioritized
• More real time information from the New York
  exchanges
• Increase the frequency of intra-day SPAN files
• Automate new product set-ups
• The Committee was to address these and define a
  plan to pursue changes with the respective
  exchanges and clearing houses.

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IV. WHAT OUR PANELISTS THINK
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1. What are the Top Priority STP Enhancements
Recommended by the Committee?
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2. How Will Your Clearing System Initiatives
Address the Above STP Enhancements?
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3. How Are the Futures Exchanges and Clearing
Houses Progressing, Relative to Providing Modern,
Industry Standard Interfaces for Clearance and
Settlement Information?
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4. Will These New Clearing Initiatives and STP
Capabilities Increase or Decrease Your Firms
Technology Costs?
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5. How Will These Initiatives Benefit
FCMs and Back Office System Vendors
Processing Environments?
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6. Does Your Firm Anticipate Quantifiable Cost
Savings from Common Clearing Processing? If So,
in What Areas, How Much, When, etc.?
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7. How Will Exchange Cost Structures Change as a
Result of These New Systems and STP Initiatives?
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8. How Much More Real Time Information Will These
Systems Provide and What Specific Information
Will be Real Time That Has Not Been Up to Now?
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9. If There Were to be One Standard for CS
Interfaces to Exchanges and Clearing Houses, What
Should it be and Why ?
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10. What Has Your Involvement Been with the
CBOT/CME Common Clearing Initiative?
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Thanks to Our Panelists !