BDUG Panel Discussion Omgeo DTCC Driving Same Day

BDUG Panel Discussion Omgeo & DTCC Driving Same Day Affirmation Rates: Positioning for Settlement Matching & Shortened Settlement Cycles A DTCC Reuters Company Thomson

Industry Campaign to Drive “Trade Date Matching” Multi-pronged effort leveraging pricing, new tools & consultation Omgeo’s multi -year plan to raise SDA rates and lower costs SDA Rates Engage Clients Provide Analysis Tools § Voice of client § SDA analytics Offer Economic Incentives § Billing & usage § Affirmation incentives § Best practice price Support for alignment Industry Initiatives § Settlement Matching § BCG & DTCC study § SDA & Central Matching 2 Driven by SIFMA Objectives § Eliminate reclaims § Shorten settlement cycles § Increase affirmation rates A DTCC Reuters Company § Prime Brokers § Custodians § Brokers § Institutions Thomson

SDA: Alignment with Industry Best Practices Incenting Same Day Affirmations (SDA) & Central Matching T Supporting industry initiatives to facilitate settlement finality & shorten settlement cycles – SDA & Central Matching recognized as key building blocks to achieving industry goals T. T+1, 2 94% 75% T+3+ 38% ($) T+3+ 5% 19% n/a 1% n/a 6% ($) n/a 51% ($) 11% T+1, 2 T T+3+ ($) n/a n/a ($) n/a Omgeo Community Trade. Suite ID OTM & CTM ($) n/a ($incentive/transaction) Omgeo’s Affirmation Incentive Program Driving Higher SDA Settlement Custodian Broker Post-Execution Pre-Settlement Investment Manager PDQ SETTLEMENT 50% 48% 40% 30% DTCC % Performance %* ($) Omgeo Pricing Incentive** 20% CTM/Central Match Workflow 10% OTM/Central Match Workflow Confirm Affirm Workflow 3 0% *Omgeo Internal Data June 2012 (US) 04 05 06 07 08 09 10 11 12 Effective Date for Omgeo’s Affirmation Incentive Program 13 Omgeo Confidential **Per billed transaction A DTCC Reuters Company Thomson

Same Day Affirmations Provide Higher Value Implementing price reductions & incentives Trade. Suite ID PRICE CHANGES Based on 2012 & 2013 Approved Price Changes (Affirmed Transactions Only) Workflow Price w/ SDA w/Tier (Standard Aggregated Vol Client Impact Reductions Discount Transaction Costs) Confirm/Affirm 24% 18% 26% 34% Broker & Custodian Prime Broker 24% 20% 34% 43% Prime Broker Custody (SMA) 29% 30% 40% Broker & Custodian Oasys Trade Match* 17% 38%* 43% 48% Broker & Custodian 6% Miscellaneous: Other DTCC Ineligible Confirms (Fed, Foreign, etc. ) * Auto-Affirm Transactions Only OMGEO & DTCC Transaction Cost Matrix Based on 2012 & 2013 Approved Price Changes Affirmed/ Affirmed Exempted Reclaim Rates Omgeo Transaction Workflow DTCC Settlement Service Combined Cost Differential 0. 2% Reclaim Rate Confirm/ Affirm SDA OASYS Confirm/ Trade. Match Affirm SDA T+2 Unaffirmed 1. 7% Reclaim Rate 5. 0% Reclaim Rate OASYS Trade. Match T+2 Confirm/ Affirm OASYS Trade. Match PDQ PDQ DO DO NDO 0% 0% +4% +8% +114% +116% +32% +72% 4 Omgeo Confidential A DTCC Reuters Company Thomson

SDA Analysis: Key Omgeo Target Segments Focus on the “Affirming Parties” (Institutions & Agents) Prime Broker 24% of Total Vol 37% of DTCC Vol Confirm Affirm 24% of Total Vol 37% of DTCC Vol OTM Central Match 17% of Total Vol 26% of DTCC Vol § § Affirmations controlled by Prime Broker Highly concentrated target group Highly automated processes Precedent set for high SDA rates § § Affirmation rates influenced by Custodian Very broad client segment Perception affirmations cost more IMs not receiving confirms (manual processes, global clients, etc. ) § § Affirmations automated by Trade. Match, in most cases “Auto Affirm” transactions yield highest SDA rates “Match-only” configuration inhibitor to SDA rates Allocation and Broker input timing a factor 5 Omgeo Confidential A DTCC Reuters Company 5 Thomson

SDA Analysis: Workflow Breakdown Confirm Affirm vs. Central Match (OTM) 100, 00% Broker Input Rate on T 90, 00% Affirmation Rates 80, 00% 70, 00% 60, 00% SDA Rate T+2 Rate 50, 00% 40, 00% 30, 00% 20, 00% 10, 00% Total 100% Confirm Affirm 74%* OTM 26% DTCC Eligible Volume * Includes Prime Broker Volumes 6 Note: Based on August data A DTCC Reuters Company Thomson

SDA Analysis: Prime Broker Low SDA rates, high T+2 rates Top Volume Prime Brokers (Performing Role of Institution & Agent) 100, 0% 90, 0% T+2 Industry Ave Affirmation Rates 80, 0% 70, 0% 60, 0% 50, 0% SDA Industry Ave 40, 0% 30, 0% 20, 0% 10, 0% 1 In Random Order 7 2 3 4 5 6 7 8 Above Average SDA Rate Below Average SDA Rate Above Average T+2 Rate Below Average T+2 Rate A DTCC Reuters Company Thomson

SDA Analysis: Agent Banks Above average SDA, low T+2 rates Top 10 Volume Agent Banks (Combined Confirm Affirm & OTM Workflows) 100, 0% 90, 0% T+2 Industry Ave Affirmation Rates 80, 0% 70, 0% 60, 0% 50, 0% SDA Industry Ave 40, 0% 30, 0% 20, 0% 10, 0% 1 2 3 4 5 6 7 8 9 10 In Random Order Above Average SDA Rate Below Average SDA Rate Above Average T+2 Rate Below Average T+2 Rate 8 A DTCC Reuters Company Thomson

SDA Analysis: Institutions Central Match driving higher affirmation rates Top 10 Volume OTM Institutions Affirmation Rates (Central Match Workflow) 100, 0% 90, 0% 80, 0% 70, 0% 60, 0% 50, 0% 40, 0% 30, 0% 20, 0% 10, 0% T+2 Industry Ave SDA Industry Ave 1 2 3 4 5 6 7 8 9 10 Top 10 Volume Confirm Affirm Institutions In Random Order (Agent Affirming as Institution or on Behalf of Institution)) 100, 0% Affirmation Rates 90, 0% Above Average SDA Rate Below Average SDA Rate Above Average T+2 Rate Below Average T+2 Rate T+2 Industry Ave 80, 0% 70, 0% 60, 0% 50, 0% SDA Industry Ave 40, 0% 30, 0% 20, 0% 10, 0% 9 1 2 3 4 5 6 7 8 9 10 A DTCC Reuters Company Thomson

SDA Analysis: Increasing SDA in Short Term Initial findings and recommendations Prime Brokers § 3 of top 8 have 89%+ SDA rate - 4 are below average w/high T+1 § Move affirmation timings from early T+1 to late on T § Target 5 high volume clients to achieve above average rates Confirm Affirm § Exhibits lowest SDA rates, especially “Agent as Institution”, “Agent affirming party” § Work with Custodians to explore inefficiencies § Make recommendations and target potential savings § Target high volume clients to achieve above average rates OTM Institutions 10 § Auto Affirm” yield highest SDA but anomalies exist “Match Only” clients yield lowest SDA § Move “Match Only” to “Auto Affirm” & investigate anomalies § Work with Brokers & Custodians to explore inefficiencies § Target low SDA clients to achieve above average SDA rate A DTCC Reuters Company Thomson

Potential SDA Improvements Targeting select Prime Broker, Custodians & Institutions 70, 00% 17% Increase 60, 00% 50, 00% OTM Institutions 40, 00% Confirm Affirm Institutions Prime Broker 30, 00% Current 20, 00% 10, 00% May 11 June July A DTCC Reuters Company Thomson

Introducing New Data Service in 2014 “Omgeo SDA Analytics” § Guide for Omgeo SDA reviews & client consultation process § § Identify weaknesses Make recommendations § Flexible ongoing client analysis tool § § § Affirmation rates and performance Operating efficiencies Counterparty efficiencies & performance § Determine institutional set-ups & workflows § § § Evaluate PDQ settlement rates § § § Breakdown of delivers vs receives Identify exemption rates Clarify Trade. Suite ID invoices § § 12 Workflows (i. e. Confirm/Affirm vs. OTM) Matching processes, (i, e, “Auto Affirm” or “Match only”) Affirming party (who did the Affirmation? , Agent or Institution? ) Identify client internal accounts (AIA, BIA, etc. ) Transaction volumes by workflow category, asset class, client type, etc. Bill types, affirmation discounts, etc. A DTCC Reuters Company Thomson

SDA MISSION: Benefits to the Industry Eye on US market readiness 13 Settlement Matching Efficiencies § § Supports settlement finality via “Passive Matching” Reduces risk of reclaims Reduces fails & settlement risk Enables operating efficiencies – middle & back offices SSC Preparedness § § Meets requirement for T+1 settlement Reduces systemic market risks Enables more streamlined STP Reduces credit risk Cost Reduction § § Omgeo transaction costs Operational costs – middle and back office Fails and related financing costs Cost benefit from SSC (BCG Study) A DTCC Reuters Company Thomson

Thank you Gregory. johnston@omgeo. com 14 A DTCC Reuters Company Thomson