Reengineering-what's it all about?
DTCC is undertaking a comprehensive reengineering of the systems its depository uses to process corporate actions and store critical data about securities in its master file or "data library." This is a multi-year project that will cut costs, lower risks and streamline processing for the industry.

Why is DTCC doing this?
New classes of securities, more complex asset servicing requirements, evolving technology, changing business needs and regulatory concerns are all factors prompting DTCC to reappraise and redesign how it services the $30 trillion worth of assets it holds in custody for investors worldwide. The depository's current platform for processing corporate actions continues to serve the industry well, but it consists of more than 60 distinct customized sub-systems. Many of these were implemented over 20 years ago and are now very difficult to maintain, update and adapt for new families of securities.

Is it important?
Throughout the global financial services industry there is recognition of the need to bring greater harmony and reduced risk to the servicing of assets. The Group of Thirty and other industry organizations believe that standardization and automation, particularly for corporate actions, are essential to the future safety and efficiency of international securities markets.

What does it do for customers?
The goal is not only to cut costs, reduce risk and streamline current processing procedures, but also to design systems flexible and scaleable enough to accommodate new types of instruments and serve an increasingly global customer base. That means building in international messaging standards, multi-currency payment capabilities and "dashboard" technology to keep customers up to speed on the status of securities or corporate actions.

Will customers have to do anything?
Yes. Over time, customers will need to modify their systems in order to make sure they mesh with DTCC's new systems. DTCC will let customers know any new specifications well in advance of when they will have to be implemented. The new system, once built, will also undergo extensive testing, including customer testing.

What are the specific benefits?
The improvements to the corporate actions process DTCC expects to achieve as a result of reengineering its systems are:

• To be able to process complex events within a single envelope with a common identifier.
• To identify related events.
• To support the ISO 15022 messaging standard for announcements, instructions, entitlements and payments.
• To standardize event types and their application.
• To handle multiple entitlements and/or obligations within one option of an event.
• To enable foreign currency payments
• To announce, capture and pay out late events on the same day.
• To calculate customer-level entitlements where appropriate.
• To allow for customizable instruction "approval" mechanisms.
• To provide Web browser access with better reporting and export functionality.
• To offer "dashboard" technology that pushes critical information to the forefront for viewers.
• Tax processing benefits

How long will the reengineering take to complete?
Several years.