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DTCC Governance

DTCC Governance. Larry Thompson, Managing Director and General Counsel October 8, 2007. DTCC Corporate Structure. The Depository Trust & Clearing Corporation (DTCC). National Securities Clearing Corporation (NSCC). DERIV/SERV. EuroCCP. The Depository Trust Company (DTC). Fixed Income

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DTCC Governance

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  1. DTCC Governance Larry Thompson, Managing Director and General Counsel October 8, 2007

  2. DTCC Corporate Structure The Depository Trust & Clearing Corporation (DTCC) National Securities Clearing Corporation (NSCC) DERIV/SERV EuroCCP The Depository Trust Company (DTC) Fixed Income Clearing Corporation (FICC) DTC Solutions LLC Government Securities Division (GSD) Mortgage Backed Securities Division (MBSD) DTCC Thomson Financial 50% Omgeo 50%

  3. Corporate Structure and Governance • DTCC – holding company for registered clearing agency and non-clearing agency subsidiaries • Clearing agencies • Functions requiring registration as a clearing agency • Comprehensive regulation: rules changes subject to publication for comment and approval by SEC • Non-clearing agency subsidiaries • Separate entities for legal and regulatory purposes

  4. Corporate Structure and Governance • Regulatory status of DTCC, the holding company • Exchange Act requirement for “fair representation” of clearing agency users – implementation in allocation of rights/ obligations to purchase shares and right of shareholders to vote in election of directors • 2006 changes in common share ownership

  5. Board Committee Structure DTCC/DTC/NSCC/FICC Board of Directors Executive Committee Compliance and Operational Risk Management Committee Compensation/ HR Committee (Proposed) Core Services Operations and Planning Committee OTC Derivatives Operations and Planning Committee Audit Committee Market and Credit Risk Management Committee Governance Committee (Proposed) International Services Operations and Planning Committee Note: Audit, Compensation and Governance Committees all must be composed of “independent” members.

  6. Board And Committee Structure • Board size • Two directors selected by DTCC preferred shareholders (NYSE and NASD) • Remaining directors elected by common shareholders; slate includes two management directors • DTCC directors elected as directors of DTC, NSCC and FICC; Omgeo has its own management and Board of Directors

  7. Board And Committee Structure • Board committees • Roles of Audit, Compliance and Operational Risk Management and Credit and Market Risk Management Committees • Fair representation – implementation in selection of non-director members of certain committees • Other qualifications of non-director committee members

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