International Securities Services Association

ACSDA General Assembly, Santiago – Chile, April 3, 2014

ISSA Update

Governance Communication Working Groups Symposium May 2014

Urs Stähli, ISSA Secretary

International Securities Services Association

Governance - Sponsoring Institutions and Board Members

Alain Pochet Hani Kablawi Lee R. Waite Phil Brown Stephen Lomas Andrew Gray Pierre Yves Goemans John Van Verre Nick Rudenstine Mervyn Chiu Thomas Zeeb Alan Naughton Chris Church Paresh Sodha Additional Board Members: Josef Landolt (Chairman) Neil Henderson, DTCC (Chair Operating Committee) Urs Stähli (Secretary)

International Securities Services Association

Governance – Development of Membership

April 2013: April 2014:

80 ISSA Members from 42 Countries + 8 New Members - 5 Terminations (Mergers, no interest, arrears) 83 ISSA Members from 42 Countries

International Securities Services Association

Governance – ACSDA and ISSA – some Numbers

28 ACSDA Members 7 3 4 21 16 4 12

International Securities Services Association

Communication - Update

ISSA Homepage

new version since April 2013 www.issanet.org

ISSA Newsletters

on a quarterly basis (4) on an ad-hoc basis (3)

Spotlight Videos

on Working Group Reports

International Securities Services Association

Working Groups

Corporate Actions

(Ranjit Chatterji)

Hidden Risks

(Ed Neeck)

Regulatory Impact

(Florence Fontan)

Comm. Standards & Reference Data

(Irene Mermigidis)

2011/2012 June 2012 Comm. Standards & Reference Data

(Irene Mermigidis) Discuss with vendors receptiveness to implement unified global ETC/matching market practice guide (Activities on hold)

Corporate Actions

(John Kirkpatrick) Collect data from major markets to evaluate progress

Regulatory Impact

(Florence Fontan) Issue Report on Shadow Banking

Collateral Management

(Angus Fletcher) Full Report with selected CM topics

Out of Network Assets

(Ed Neeck) Full Report in cooperation with ACG

June – September 2012 2013 / 2014

International Securities Services Association

Working Group « Global Principles for Corporate Actions and Proxy Voting»

Main Contents

 Survey in 33 markets   Realities Recommendations

Recommendations for Next Steps

 Promote Principles actively with industry participants, particularly CSDs and Exchanges  Promote regulatory change to require the digitization of CA information at source  Take a firm stand on and actively promote the use of ISO formats for cross-border CA info exchange  The working group should repeat this survey annually  The working group should publish a case study highlighting benefits in successful markets

International Securities Services Association

Working Group «Regulatory Impacts on the Securities Value Chain – Shadow Banking»

Main Contents

 General Description of Shadow Banking Initiatives   Impacts on Securities Lending and Repos Transactions Impacts on Money Market Funds

Conclusions

 Further Shadow Banking developments to be expected in 2014  Different speed and focus on a regional level  Custodians (and Fund Depositaries) to closely study the reforms to be able to make adjustments to accounting and disclosure policies and procedures  The jury is out as to whether proposed Money Market Fund reforms will impact client product appetite and whether alternatives will benefit.

International Securities Services Association

Working Group «Collateral Management Best Practices»

Main Contents

 Background and Key Definitions Collateral Management   37 Best Practice Recommendations Regulatory Overview in EU; Future Trends

Best Practice Recommendations

 Collateral Protection (Collateral Segregation; Cash / Non Cash Collateral; Cleared / Uncleared TRX)  Operational Processes Associated with Default Management (Pre-Default; Post-Default)  Customer Communication and Reporting (Message Automation; Pledge and Release Automation; Report Automation, Reconciliation)

International Securities Services Association

Working Group ISSA and AGC «Out of Network Assets – Challenges in Safekeeping and Supervisory Services»

Main Contents

 Legal and practice framework   Advancements of Market Infrastructures Possible approaches / recommendations to close gaps

Out of Network Assets dealt with

 Third-party Time Deposits  Interests in Funds / Collective Investment Schemes and Private Equity Funds  Bank Loans  Derivatives  Precious Metals on legal nature / ownership, ownership interest and asset information, perfected security interests and title transfer arrangements.

May 20 (Tue) Arrival of the Participants Combined Board and OC Meeting Cocktails and brief Welcome Remarks Dinner and Drinks ISSA Symposium 2014: Responding to the Regulatory Challenges – Implications for the Industry May 21 (Wed) Breakfast Introduction / Setting the Stage Key note Speech 'Today's Regulatory Challenges and Trends' Speech 'Practical Application of Technology to Solve Regulatory Challenges' Presentation 'Know your Customer' (Practical View) Presentation 'Know your Customer' (Compliance View) Lunch Break Panel / Q & A 'Reflection of Morning Presentations' Introduction Breakout Sessions Breakout Sessions (6 Groups) Cocktails / Gala-Dinner with Entertainment (Wolfsberg) May 22 (Thu) Breakfast Presentations / Conclusions of Breakout Sessions Panel/Introduction to Breakout Sessions - Out of Network Assets - Collateral Management Breakout Sessions Part 1 (6 Groups) Lunch Break Breakout Sessions Part 2 (6 Groups) Feedback Reports Breakout Sessions General Assembly Closing Remarks Dinner and Drinks May 23 (Fri) Breakfast Departure

11

International Securities Services Association ISSA Symposium 2014: Responding to the Regulatory Challenges – Implications for the Industry May 20 – 23, 2014