CDS, DTCC Plan Feasibility Study on Additional Collaboration.
The study, to be completed over the next four to six months, will be a rigorous review focused on areas such as risk management, transaction services, information-based services, technology platforms and business continuity planning.
DTCC and CDS have a more than 20-year history of working collaboratively to facilitate cross-border clearance and settlement services for our participants. The question now is whether or not we can identify additional areas where "borrowing vs. building" capabilities can increase the quality and scope of support CDS and DTCC can provide to their marketplaces and customers.
While the two organizations serve separate marketplaces and customers and adhere to rules established by different national regulators, there are striking parallels: 1) compatibility in our business models, 2) technology architecture, 3) emphasis on user governance, 4) strong central counterparty risk management and 5) expertise in ongoing asset servicing/entitlement processing.
We believe by leveraging strengths at CDS and DTCC, each of our organizations may be able to speed access to new services and capabilities, share technology upgrades and product enhancements and expand the roles our respective staffs can play in meeting customer requirements.
Both CDS and DTCC indicated that this study was not a precursor to a merger or an acquisition. We do believe, however, that taking a fresh look at partnering our shared experience and expertise can gain advantages for both companies.
CDS is the only clearing and settlement organization with a full cross- border link into the U.S., encompassing central counterparty clearing and "delivery versus payment" settlement and asset servicing. Although both organizations have successfully linked their custody services with other depositories, the highly efficient, evolved link between CDS and DTCC represents the securities industry's most robust cross-border interface globally.
The feasibility study will determine if there is a sufficient business case to support further collaboration and will provide ample time to gain customer input on possible shared services, discuss with regulators their concerns and, ultimately, present findings and recommendations to our respective Boards of Directors.
Plans to conduct this study have been outlined to the CDS and DTCC Boards, and regulators in both countries have been briefed on the study aims.
We have a common desire to serve our clients in the best and most efficient way possible in clearing, settlement, custody and asset servicing, and we believe that if it is possible and cost effective for us to leverage capabilities, without causing any significant adverse impact for our members, then we will have achieved a major win for everyone.
Founded in 1970, The Canadian Depository for Securities Ltd. (CDS) is Canada's national securities depository, clearing and settlement hub, providing valued, secure and reliable securities market services that continuously improve efficiency, effectiveness and global competitiveness. CDS supports Canada's equity, fixed income and money markets, holding close to $2 trillion on deposit and handling millions of domestic and cross-border securities trades annually. CDS INC., a CDS subsidiary, operates on behalf of Canadian securities regulators:
* SEDAR(R), the System for Electronic Document Analysis and Retrieval, enabling reporting issuers and mutual funds to file securities documents electronically, and securities filings and profiles to be made publicly available on www.sedar.com * NRD(TM), the National Registration Database, enabling dealers, advisers and individuals to electronically submit registrations and notices over the internet at www.nrd.ca * SEDI(TM), the System for Electronic Disclosure by Insiders, facilitating the filing and public dissemination of insider reports over the Internet on www.sedi.ca. About DTCC
The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, over-the-counter credit derivatives and emerging market debt trades. DTCC's depository also provides custody and asset servicing for more than two million securities issues from the United States and 100 other countries and territories. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC has operating facilities in multiple locations in the United States and overseas. For more information on DTCC, visit http://www.dtcc.com/.
CONTACT: Stuart Z. Goldstein, DTCC, +1-212-855-5470, firstname.lastname@example.org; Janet Comeau, CDS, +1-416-365-8427, JComeau@cds.ca
Web site: http://www.dtcc.com/ http://www.sedar.com/ http://www.nrd.ca/ http://www.sedi.ca/
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|Date:||Jul 15, 2003|
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