2006 Annual Meeting Notes and Presentations

Inside the 2006 BDUG Conference

By Steve Letzler

Approximately 70 bankers and 16 exhibitors attended the three-day Bank Depository User Group (BDUG) annual meeting in Tampa, Florida, recently for a look at where DTCC is going and to preview new services.

Included as guest speakers and panelists at the conference were Larry Tabb of The Tabb Group, John Panchery of the Securities Industry and Financial Markets Association, John Burchenal of Omgeo, William Hodash of DTCC, Paul Agueci of the Federal Reserve Bank of New York and Jeff Mooney of the Securities and Exchange Commission (SEC).

Along with presentations on DTCC services, there were updates on the SEC and banks, Omgeo, changes being planned by the Federal Reserve and a panel discussion on “preparing for the future.” BDUG members also were given a tour of DTCC’s Southern Business Center located in Tampa.

DTCC preview
William Aimetti, DTCC’s new chief operating officer, gave the keynote address to kick off the conference, detailing DTCC’s financial performance to date in 2006 and previewing a number of developments planned or in the works at the company.

“We hope to continue giving you a substantial amount in discounts and rebates, and to continue reducing fees in the future. In fact, if you’ve looked at the financial statements for our key three subsidiaries for the first six months of the year, which are available on our Website at www.dtcc.com under Annual Reports, you’ll see we are running discounts and other refunds of about $309 million for the first half of this year, despite the fee reductions, while volumes and offerings continue to grow and establish new records,” he said.

Aimetti also asked the audience to share their problems with DTCC officials at the conference. “Listening to what you, our customers, want is something that I and everyone from DTCC who is down here will be doing consistently throughout this conference,” he said. “We know it makes us better at servicing the industry, and that’s the reason for our existence.”

Talking to customers
“Many of our ideas for new services that I will mention later have come from our customers – people like you – who talked to us when they had a problem they thought we might be able to help solve. We need to know where you have problems or issues, where you need help, where you face a concern, and where we might be able to assist you – and we need to know it early.”

Aimetti also focused in on NSCC’s new managed accounts service, launched in September.

“This service will lower the costs and requirements of offering your customers access to managed accounts, and we expect it to be a growing area for us well into the next decade,” he said. “And as more and more banks and brokers begin to use this service to connect with investment managers, we expect the cost of the service to go down, and managed accounts to be another significant product available to more and more people throughout the United States.”

Future developments
Noting the possibility that the New York Stock Exchange and Euronext could merge in the first transatlantic merger of stock exchanges, Aimetti said DTCC was ready for such an eventuality.

“Earlier this year, we began something we had never done before: we started settling trades in a currency other than the U.S. dollar,” he said.

“Through a new settlement link with Canada, we are now able to settle trades in Canadian dollars. This also positions us to handle settlement in other currencies in the future. And with the impending merger of the New York Stock Exchange and Euronext, and other international mergers or acquisitions between stock exchanges also a possibility, that’s a capability that may come in handy.

“Clearly, we don’t know how things will end up in this first-ever transatlantic combination, and what may follow as a result,” he continued. “What we can reasonably expect is that there will be a need for us to be able to work more closely with clearing and settlement organizations in Europe, and to have systems and capabilities that will allow us to do so with little or no problems. The good news here is that we have prepared for that possibility, and our systems are mostly ready to take on whatever role is needed to support these new, consolidated markets if and when they become a reality.”

Richard Lanning, DTCC director, Relationship Management, who worked closely with John Hosty of Northern Trust and Dennis Callahan of IBT (the chairman and vice chairman respectively of the BDUG steering committee) to develop the agenda for the annual meeting, praised the group’s efforts and the variety and quality of sessions offered this year.

“The BDUG Steering Committee does an outstanding job year after year to create a forum for its members to learn and share opinions on the latest DTCC and industry developments at a very reasonable cost,” said Lanning. “The Steering Committee’s preparation for next year’s gathering in San Antonio on October 14 has already begun. As for this year’s meeting, there was a very wide range of subjects covered from case studies in business continuity to industry action steps in improving CMO processing to the underwriting and corporate action reengineering initiatives. I think there was a new appreciation of the many initiatives and new services DTCC is getting involved in, and how they might impact banks. The sessions were very interactive and everyone learned a lot.”

Exhibitor Presentations


2006 Annual Meeting Presentations/Notes

General Session – Preparing for the Future
General Session – SIFMA
General Session – Structured Securities
General Session – Business Contingency Planning at DTCC
General Session – Lasalle Bank Fire
General Session – Measles Outbreak
General Session – Federal Reserve Bank Update
General Session – Manages Accounts Service
General Session -Preparing for the Future
General Session – Corporate Action Reengineering
General Session – DTCC Outlook for 2007
Breakout Session – DTCC
Breakout Session – DTCC Settlement Renewal
Breakout Session – Securities Roundtable Discussion
Breakout Session – OMGEO Update
Breakout Session – Operational Efficiency in the OTC Derivative markets
Breakout Session – DTCC Learning

DTCC Additional Information

Holiday Processing Proposal (DOC)
PTS/PBS Equivalents (PDF)

2006 Survey Results

2006 Survey Results (xls)