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Global Trends in Asset Servicing – Extending Beyond the Traditional Custody Model

Global Trends in Asset Servicing – Extending Beyond the Traditional Custody Model. Presentation to: Atlantic Connection Date: July 13, 2011 FOR LIMITED DISTRIBUTION. Speaker. Agenda. Safekeeping – Maintaining a record of the securities owned.

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Global Trends in Asset Servicing – Extending Beyond the Traditional Custody Model

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  1. Global Trends in Asset Servicing – Extending Beyond the Traditional Custody Model Presentation to: Atlantic Connection Date: July 13, 2011 FOR LIMITED DISTRIBUTION

  2. Speaker

  3. Agenda

  4. Safekeeping – Maintaining a record of the securities owned. Settlement – Processing of trade orders and transmitting payments. Asset Servicing – Processing the rights and obligations associated with securities which includes: Income Collection Corporate Action Notifications Tax Withholding and Reclaims Proxy Voting Statement of Holdings Overview Of The Traditional Custody Model

  5. Market Events And The Impact On Financial Services • Global Financial Crisis • Basel III • Dodd Frank Wall Street Reform and Consumer Protection Act • Troubled Asset Relief Program • Flight to Quality • Growth of Global Economies • Countries Enact Pension Reforms • Large Pool of Institutional Assets Demand Global Solutions • Increase in Cross Border Investments • Regulatory Reporting

  6. Today’s Pressures on Asset Owners and ManagersIn the wake of the financial crisis, institutional investors and investment managers like you face significant new challenges Cost and revenue pressures Regulatory scrutiny Increasedcomplexity of investment structure Institutional Investors and Investment Managers Market volatility

  7. Asset Owner Requirements in Today’s Environment Asset Owners Required Solutions Investment Diversification Liquidity Management Monitor Increasing Market Volatility Manage Risk Keep up with new regulations Operational Costs Management Focus on Alpha Consistent service solution across regions Analytics across all asset and instrument types Comprehensive reporting and modeling capabilities Timely and accurate performance and risk metrics Servicesto understand complex portfolio dynamics Broader compliance coverage Reduced cost of ownership Analytics for traditional and alternative investments Global solutions and presence

  8. Safekeeping – Maintaining a record of the securities owned. Settlement – Processing of trade orders and transmitting payments. Asset Servicing – Processing the rights and obligations associated with securities which includes: Income Collection Corporate Action Notifications Tax Withholding and Reclaims Proxy Voting Statement of holdings Fund Services – Core services for investment portfolios which includes: Investment Accounting Net Asset Valuation Performance Measurement Compliance Monitoring Risk Reporting The Custody Model - Today

  9. Types of Custodians • Single Market Custodian – A custodian who provides services in a home or local market to serve domestic customers. Common terms used to refer to this custodian are local custodian, agent bank, sub-custodian. • Multi-direct Custodian – A custodian who tries to capture cross border business by establishing a presence in multiple markets. • Global Custodian – A custodian who provides services in all the world’s markets to asset owners regardless of their domicile.

  10. The Complete Investment Picture Financial and Regulatory Reporting Performance and Analytic Services Risk Services Compliance Services Information Delivery

  11. Delivering Services for Your Entire Portfolio PerformanceServices DASHBOARDSM Analytic Services REPORTS Information Delivery Options Risk Services PDF Compliance Services FILES / DATA FEED TXT XLS

  12. ADDITIONAL SERVICES REQUIRED Continuous Linked Settlement FX Execution Derivatives Processing Securities Lending Collateral Management Financial and Regulatory Reporting Transition Management Research and Trading On-line Applications The Role Of A Custodian Has Evolved Into More Than Just The Safekeeping Of Assets

  13. Thank you! Benjamin Johnson, Vice PresidentState Street Global Services Latin America & Caribbeanbmjohnson @statestreet.com(617) 664-9410

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