Omgeo – An Industry Update

Presented by:

Victoria Mazza – Relationship ManagerBDUGOctober 25, 2005

Agenda

• Evolution of Omgeo’s Strategy• Industry Update on Matching• STP – Omgeo Solutions carving the way for STP

• Fixed Income • ALERT on the Web• Omgeo TradeHub• Omgeo Central Trade Manager• Omgeo Connect

• Questions / Answers

Omgeo’s Strategy: 2005+• Automate Investment Manager allocations across multiple

asset classes• Provide IMs with a single point of access to Omgeo and 3rd

party trade management solutions for trades across multiple asset classes• Facilitate efficient trade management and settlement through

Omgeo CTM and Open SI/SN• Strengthen strategic relationships with key clients and

partners• Increase our capability and capacity by adopting a global

sourcing model

Industry Update on Matching

Sends confirmations to TradeMatch

*

Matching exceptionshandled by NearMatch

BrokerInstitution

Omgeo OASYS–TradeMatchSM

Omgeo OASYS

TM

Sends trade block and allocation

details Accepts or rejects trade block and allocation details

**For existing accounts, TradeMatch calculates Principal Amount, SEC Fees and Net Settlement Amount and determines Settlement Location for the OASYS message for matching purposes. SEC calculation and rounding rules conform with the new Investor and Capital Markets Relief Act recently passed by Congress.

Omgeo SID

SM

Custodian

3

6 Matched or matched affirmed confirmations distributed to all parties of trade

5a

1

2

OASYS sends trade blocks and allocation details to TradeMatch**

7

Pre-notification allocations sent to Custodian/Agent

4

*Broker Internal Account numbers appended from ALERT if using both products.

TradeMatch compares allocations to confirmations

Settlement

DTC5b

Omgeo NearMatch

SM

Omgeo

Omgeo TradeMatchSM

• Average Daily Trades: 916,000

• Equity: 812,000• Fixed Income: 104,000

• Confirm/Affirm (TradeSuite): 837,000• Central Matching 79,000

The Case for Central MatchingU.S. Trade Volumes - TradeSuite

[August 2005]

Confirm / Affirm

IMs

Central Matching

All IMs

Central Matching OTM IMs

LSV (Example of Central

Matching Best Practices)

Overall IMs

Same-day affirmation rate

18% 51% 83% 90% 27%

Unaffirmed trades on T+0

82% 49% 17% 10% 73%

Affirmed trades on T+2, Noon

87% 92% 98% >99% 88%

Unaffirmed trades on T+2, Noon

13% 8% 2% <1% 12%

Central Matching Improves SDA Rates (U.S. Domestic) July 2005

The Case for Central Matching

Source: Omgeo, July 2005

CTM Trade Volumes

Trade Volume since inception (as of 8/31/05): 5,619,280

Settlement Notification Volumes

Fixed Income Initiative

Economics: Est. Cost per Fixed Income Trade

Source: ZYen

4-5X Cost Difference

ManualTrade

$28.5 Avg. per trade – ranges

from $6.50 - $50

ElectronicTrade

$5-8

Cost per trade

Note $28.5 broken down by:

Mid office – $3.5

Ops – $16.6

Custody - $8.4

Recent Highlights

• Over 70 IMs now transacting over Omgeo OASYS, with 3-5 new joining the community each month• Bear Stearns, Barclays are moving up automation curve with OASYS Direct in 2005, other Tier 1 workstation brokers closer to further automation• CSFB, BNP Paribas, Legg Mason, JP Morgan, Mesirow and First Tennessee, Raymond James, and Advest are live on OASYS Direct via Bloomberg TOMS• New live IM’s include: Dodge and Cox, Shenkman Capital, Financial Management Advisors, Federated Investments, Denver Investments, Babson Capital Mgmt., ABN Amro and Wells Capital• New subcommittee formed to address money market trade processing – barriers and efficiency opportunities

Omgeo ALERT on the Web

Key Benefits to the Web Interface

• Portable access to ALERT• Individual user ids and passwords• The option to authorize individual users for either full access or read-only access

to the information on ALERT• Click-through links to fields that need to be updated to comply with the latest

validation rules• Easily accessible definitions for settlement instruction fields• “QUICK Fields” tab that provides immediate access to the 20 most commonly

used ALERT fields• A new homepage with quick access to main functions, documentation and

important product notices from Omgeo• Ability to quickly switch from one acronym to another (provided client’s username

is entitled to multiple acronyms)

ALERT via the Web Design

Enhanced levels of security – User Level login

Omgeo TradeHub

Omgeo TradeHub

• Omgeo TradeHub: Facilitating Trade Instructions / Reconcilements• Provides IMs and Custodians with a single point of access to

reliable domestic and international messaging. Settlement messages as well as reconcilement messages• Provides an open, timely and cost-effective environment • Partnerships with both Reconcilement Vendors and Trust System

Vendors– Sample Trust System Vendors: SEI and ATS– Sample Reconcilement Vendors: SmartStream and Checkfree

• Automate Omnibus/Trust trades• Standard messages supported - ISO 15022

Omgeo Connect

Omgeo Connect Overview Solution Overview

A single point of connectivity for investment managers to access Omgeo and other post-trade solutions, enabling the trade and settlement management of multiple asset classes via an ASP environment.

Omgeo Connect OverviewSolution Components

• Hub solution for all trades• Common dashboard and workflow management

• Trade Management• Single point of access to Omgeo services• Third party connectivity (e.g. Deriv/SERV,

TradeWeb)

• Settlement Management• Support SWIFT and non-SWIFT workflow• Settlement status confirmation

OMS

OMS

PMS

SWIFTTradeHub

GUI

Business Apps

Integration Layer

Messaging Hub

Administration

CTM

OASYS / TSuite

3rd Party Vendor

Email, Fax etc.

ALERT

One InterfaceALL Trades/Events

Broker

Broker

Broker

Broker

InvestmentManager

Bank Bank Bank Bank

3rd

Party

3rd

Party

Omgeo Connect

TM Destinations

Connectivity Hub Destinations

Omgeo Connect OverviewConcept