DTCC Announces Fee Reductions for 2006 Totaling More Than $161 Million.

NEW YORK -- The Depository Trust & Clearing Corporation (DTCC) today announced 2006 fee changes for its subsidiaries that implement net fee reductions totaling $161.3 million, the largest net reduction in fees ever made by DTCC. The fee changes, which will generally take effect January 2, 2006, are being made across DTCC's subsidiaries including National Securities Clearing Corporation (NSCC), The Depository Trust Company (DTC) and Fixed Income Clearing Corporation (FICC).

"Driving down clearance and settlement costs in the U.S. capital market not only benefits our customers, but further ensures that overall transaction costs remain low, keeping our markets the most vibrant and desirable place for issuers and investors to meet their financial needs," said Donald F. Donahue, chief operating officer, DTCC.

"The fee reductions are consistent with our efforts to continue to 'right-size' our fees," said Donahue. "On a gross basis, we reduced fees $183.7 million, but this figure was offset by increases in fees in certain categories."

Donahue pointed out several factors that enabled DTCC to achieve the fee reductions, including the tight expense controls management has put into place and the fact that processing volumes for most businesses were up substantially this year. Also, several initiatives causing DTCC to incur significant "special expenses" over the past four years -- such as establishing the Southern Business Center in Tampa for business continuity purposes and the insourcing of certain data processing done by the Securities Industry Automation Corporation (SIAC) -- have now been completed.

"We remain committed to achieving sustained reductions in the costs of our traditional services," Donahue said. "DTCC has already delivered an impressive series of fee reductions during the first half of this decade, and we are making every effort to deliver further reductions over the next five years."

The fee reductions are as follows:

--NSCC fees will be reduced by approximately $99.4 million, with significant reductions in fees for trade comparison and recording services. The mutual funds business will see reductions in Fund/SERV and Networking fees. The reduction in Networking fees will occur on February 2, as part of a broader revision of the Networking fee structure.

--DTC fees will be reduced by approximately $36.6 million over the next year, including the complete elimination of fees for messaging and file transfers for all depository services. Settlement services fees also will be reduced.

--FICC fees will be reduced by approximately $25.3 million with reductions for trade submission and trade netting for U.S. government securities and for Settlement-Balance Order options and trade-for-trade submissions in mortgage-backed securities.

New disincentive fees were announced as part of DTCC's effort to discourage behavior that keeps the industry from achieving peak efficiency. The disincentive fees include charges for the physical movement of securities certificates, late submissions of deposits on restricted securities, ACATS rejects, and late notifications to FICC regarding repo substitution requests.

DTCC is owned by its member firms including international broker/dealers, correspondent and clearing banks, mutual fund companies and investment banks. It operates on an "at-cost basis," returning excess revenues from transaction fees to its members. Since the late 1970's when DTCC subsidiaries began operations, the average transaction cost per trade has gone from $1.64 in 1977 to 86 cents in 1986 and to just 7 cents in 2005.

About DTCC

Through its subsidiaries, DTCC provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities and over-the-counter derivatives. DTCC's depository also provides custody and asset servicing for almost 2.5 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 www.dtcc.com.