MTU Service Description Roadmap

Margin Transit Utility (MTU)

Service Description (Roadmap)

Version 4

DEGCL Controlled Non-Confidential (Green)

25 September 2017

MTU Service Description (Roadmap) DEGCL Restricted (Green) 1 GlobalCollateral

2017 DTCC Euroclear Global Collateral Limited, All rights reserved.

The information and materials contained in this document are protected by intellectual property or other proprietary rights. All information contained herein is provided for information purposes only and does not constitute any recommendation, offer or invitation to engage in any investment, financial or other activity. This communication is directed only at persons having professional experience in matters relating to investments and any investment or investment activity to which it relates is available only to such persons or will be engaged in only with such persons (an investment professional within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005). Persons who do not have professional experience in matters relating to investments should not rely on this communication. We exclude to the fullest extent permitted by law all conditions, guarantees, warranties and/ or representations of any kind with regard to your use of any information contained in this document. You may not use, publish, transmit, or otherwise reproduce this document or any information contained herein in whole or in part unless we have given our prior written consent.

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MTU Service Description (Roadmap) DEGCL Restricted (Green) 2 GlobalCollateral

CONTENTS About this Document ........................................................................................ 3

Common Terms............................................................................................ 4 Introduction .................................................................................................. 5

Using this Service Description ............................................................................ 6 Margin Transit Utility Process Overview .................................................................... 7

Receive and Validate Matched Margin Call Process.................................................. 8 Enrichment ............................................................................................. 9 Settlement Messaging ............................................................................... 11

Features and Options ...................................................................................... 13 Audit Recordkeeping .................................................................................... 13 Call and Settlement Status Updates and Reporting via the GUI ...................................... 13 Call and Settlement Status Updates and Reporting via MT558 ....................................... 14 Position Maintenance ................................................................................... 14

EOD Position Report ................................................................................. 15 Tri-Party Support ........................................................................................ 15

Onboarding with MTU ..................................................................................... 17 Client Engagement and Documentation ............................................................... 17

Determine Eligibility .................................................................................. 17 End User Legal Agreement ........................................................................... 18 Compliance Review .................................................................................. 18 Planning and Client Implementation ................................................................ 19 Completion of Client Onboarding documentation ................................................. 19

Client Setup and Configuration ............................................................................ 20 Account Setup and Reference Data .................................................................... 20 Connectivity Setup ...................................................................................... 21

Available Messages (Subscription) .................................................................. 22 Access Coordinator Setup ............................................................................... 23 AcadiaSoft and Omgeo ALERT Setup ................................................................... 24

CIX Matched Accounts Setup ........................................................................ 24 Business Continuity Management ......................................................................... 26

Risk Review ........................................................................................... 26 MTU Availability ............................................................................................ 28 Contact Us .................................................................................................. 29

Interested in GlobalCollateral? ......................................................................... 29 Are you an existing client? .............................................................................. 29

Disclaimer ................................................................................................... 30

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MTU Service Description (Roadmap) DEGCL Restricted (Green) 3 GlobalCollateral

About this Document This document provides an overview of DTCC-Euroclear GlobalCollateral Ltd.s (DEGCL) Margin Transit Utility (MTU) services and onboarding procedures. It is not intended to serve as a legal document. DEGCL services are provided only in accordance with the terms of DEGCL rules and procedures and are subject to change. The information in this service description is directed solely at prospective and existing Participants in the DEGCL MTU service.

DEGCL has designed the MTU as a service model that provides streamlined, automated, straight-through collateral process, including:

Receipt of matched margin calls

Validation and enrichment of margin calls

Communication of settlement messages and settlement status of margin calls

Reporting and recordkeeping of margin calls

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MTU Service Description (Roadmap) DEGCL Restricted (Green) 4 GlobalCollateral

Common Terms Term Description

AcadiaSoft Messaging Platform (AMP)

The AcadiaSoft messaging platform is a margin confirmation/affirmation system that streamlines communications between counterparties engaged in collateral management.

Base Currency (CCY) Clients domestic or accounting currency.

Broker-Dealer (BD) A brokerage firm that buys and sells securities on its own account as a principal before selling the securities to customers.

Central Securities Depository (CSD)

A specialist financial organization holding securities such as shares either in certificated or uncertificated (dematerialized) form so that ownership can be easily transferred through a book entry rather than the transfer of physical certificates.

Client Identifier Cross Reference (CIX)

A Utility designed to allow the Margin Transit Utility (MTU) customers to enter, view and index their matched accounts in support of MTU.

Committee on Uniform Securities Identification Procedures (CUSIP)

A CUSIP number identifies most financial instruments, including: stocks of all registered U.S. and Canadian companies, commercial paper, and U.S. government and municipal bonds.

Custodian A custodian is a financial institution that holds customers' securities for safekeeping so as to minimize the risk of their theft or loss. A custodian holds securities and other assets in electronic or physical form.

DTCCs Omgeo ALERT The industry's largest and most compliant online global database for the maintenance and communication of account and Standing Settlement Instructions (SSI).

International Securities Identification Number (ISIN)

A code that uniquely identifies a specific securities issue.

Investment Manager (IM)

A person or organization that makes investments in portfolios of securities on behalf of clients, in accordance with the investment objectives and parameters defined by these clients.

Securely Managed and Reliable Technology (SMART)

DTCCs managed data network (encrypted and dedicated).

Standing Settlement Instructions (SSI)

The agreements between two financial institutions which fix the receiving agents for each of the counterparties in a trade.

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MTU Service Description (Roadmap) DEGCL Restricted (Green) 5 GlobalCollateral

Introduction Regulatory reform of the OTC derivatives market is creating many strategic and tactical industry challenges that are driving change at an unprecedented pace and that need to be overcome, including:

A changing collateral management regulatory landscape and its requisite compliance requirements

A desire to have a more efficient operations process

A strategic move from high fixed cost to a flexible variable cost infrastructure

The challenges outlined above are but a few of the current demands put upon firms overall resources. These resources are in many cases already stressed or even unavailable for work on strategic objectives due to tactical demands.

DTCC-Euroclear Global Collateral Limited