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Omgeo’s Role in the US and Global Settlement Landscapes

Omgeo’s Role in the US and Global Settlement Landscapes. Marianne Brown, Omgeo 8 October, 2007. Who is Omgeo? An Institutional Trade Omgeo and the Institutional US Tradeflow Measuring Success. Agenda. Who is Omgeo?.

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Omgeo’s Role in the US and Global Settlement Landscapes

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  1. Omgeo’s Role in the US and Global Settlement Landscapes Marianne Brown, Omgeo 8 October, 2007

  2. Who is Omgeo? An Institutional Trade Omgeo and the Institutional US Tradeflow Measuring Success Agenda

  3. Who is Omgeo? • Leading provider of post-trade, pre-settlement automated services and products to Investment Managers (“IMs”), Broker-Dealers (“BDs”) and Custodians • Global joint venture between DTCC and The Thomson Corporation’s post-trade, pre-settlement businesses. • Established in May 2001 • Over 6,000 clients in 44 countries • Process 1.5 million trades a day globally • Manage settlement information on over 4.8M accounts • 15 office locations globally • 500+ Employees

  4. Who is Omgeo?Governance • DTCC and Thomson Financial are 50/50 joint owners • As the regulated entity, DTCC maintains control over any matters related to US regulated aspects of Omgeo • Omgeo’s industry controlled Board of Managers: • Has 7 of 11 voting Managers from industry (e.g., Merrill Lynch, Morgan Stanley, Northern Trust Company) • Plays vital role in ongoing governance and industry oversight • Represents interests of clients in decisions about strategy and operations

  5. Who is Omgeo?Governance • Board Of Managers: • Rick Macek, Chairman - DTCC representative • Michael Bodson, DTCC representative • Sharon Rowlands, TF representative • Jim Toffey, TF representative • Taylor Bodman, Brown Brothers Harriman • John Devine, Merrill Lynch • Marianne Doan, Northern Trust • Robert Gartland, Morgan Stanley • Robert Kaplan, State Street Corporation • JP Marson, BNP Paribas • Marcus Ruetimann, Schroeder Investment Trust • Marianne Brown, Omgeo (CEO) - Non-voting member

  6. Who is Omgeo?Where We Fit in the Institutional Trade Lifecycle Pre-Trade Order Processing Post-Execution Operations Trading Settlement Omgeo Notice of Execution Trade Allocation Trade Acceptance Trade Confirmation Trade Affirmation Bank Notification 6

  7. Omgeo and the Institutional US Trade Flow Buy Order Buy Order Purchasing Investor Investment Manager Buying Broker Exchange or OTC Pre-Trade Notice of Execution Notice of Execution 1 Investment Manager sends trade block (total) and allocation details Omgeo ALERT 2 Omgeo OASYS Broker/Dealer accepts trade block and allocation details Broker/Dealer Investment Manager 3 OASYS sends trade blocks and allocation details to TradeMatch 4 Post-Execution Broker sends data to TradeSuite to create confirm 6 Matched or matched affirmed confirmations distributed to all parties of a trade Omgeo TradeMatch and TradeSuite 5 TradeMatch compares OASYS allocation to TradeSuite confirmations Custodian For DTC-eligible securities, trade information is sent from Omgeo to DTC; settlement of DTC-eligible trades, including transfer of cash and securities, occurs at DTC. 7 Settlement Depository (DTC)

  8. Measuring Success • With the Omgeo TradeSuite/DTCC model: • Affirmed trades are 75 times less likely to be reclaimed than unaffirmed trades • 91% of trades are settled by noon on T+2 • This allows a full day to reconcile trades, detect any errors, failures, etc. • Other methods often don’t reach DTCC until T+3 – less time rectify any errors/trade fails • Failed trades cost institutions 250 USD per domestic trade and 535 USD per cross-border trade • Trades are sent to DTCC in real-time: better business continuity, greater efficiency, lower costs • Since Omgeo’s inception, volumes through TradeSuite have doubled, but affirmation rates remain constant

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