Moving to T+1: Challenges & Strategies

1. Moving to T+1: Challenges & Strategies Beth Mercier Vice President SS&C Technologies

2. Outline • Current Operational Challenges • It’s Bigger than T+1 • Can It Really Be Done?

3. SS&C Technologies • An Independent Software and Services Company • Headquartered in Windsor, CT other domestic offices in New York, Chicago and Minneapolis • International Offices in London, Amsterdam, Kuala Lumpur and Tokyo • Financially Strong and Publicly Traded • SS&C operates in 5 vertical markets: • Insurance & Pension Funds • Institutional Asset Management • Hedge Funds & Family Wealth • Financial Instituions • Real Estate Property Management

4. Moore Capital

5. Scope of Software Suite • Enterprise-wide, client/server tools covering • Trade Order Management, Portfolio Management and Modeling • Compliance Monitoring • Investment Operations and Accounting, with Net Asset Value / Unit Value Reporting • Performance Measurement • Loan/Real Estate Management and Accounting • Financial Modeling • Comprehensive Interfaces and ‘Connectivity’

6. Asset Management Software • CAMRA - Enterprise Portfolio Management, Accounting & Reporting • Antares - Trade Order Management & Modeling • AdvisorWare - Portfolio Management & Accounting for Hedge Funds and Family Offices • Debt & Derivatives - Debt & Derivatives Accounting & Reporting

7. Current ‘Typical’ Environments Advisory Insurance Mutual Fund Clients Market Info/Data Brokerage Services Custodians & Other Services Compliance Advisory Research Insurance Mutual Fund Portfolio Management Trading Securities Operations Accounting & Reporting Portfolio & Analysis Data Trading Data Operations Data Accounting Data

8. Common Front Office Stress Points • Front-office automation not keeping up • ‘Sea’ of paper-based, highly fragmented data and myriad of sources to gather, maintain and codify • Lacking in real time data (market or positions) • Plethora of manual processes / ‘side systems’… and resulting risks, redundancies, inefficiencies… • Managers and traders prefer intuitive spreadsheet environment • No two model exactly the same • Data transfer from customized models to trading systems is manual and problematic

9. Common Front Office Stress Points • Compliance monitoring • Reactive… violations often identified after the fact • Manual and extremely complex • Errors are costly to the investment manager • Ad hoc query and data access - customized management and client reporting • Essential for competitive advantage • Costly to develop and/or maintain

10. Common Back Office Stress Points • Numerous systems/platforms leading to numerous ‘interfaces’ and ‘reconciliations’ • Trading to accounting • Accounting to performance • Accounting to ‘reporting’ • No authoritative ‘book of record’ • Compliance • Valuations • Client reporting • Performance • Risk management

11. STP - The Popular View Offerings/Indications of Interest Orders and Instructions Executions and Allocations Trade Details/Messages Confirmations/Affirmations Settlements TRANSACTION PROCESSING

12. STP - The Popular View • Buyside, broker, and custodian: • Pre-trade to trade to settlement ‘connectivity’ • Transaction (trade) processing • ‘Mainstream’ transactions and asset types • Alphabet soup: IOIs, FIX, ECNs, ISITC, SWIFT, ETC, GSTPA, DTCC, etc.

13. HOLDING PERIOD Other Side STP- The Security Master Holdings & Cash Maintenance Reconciliation Corporate Actions Income Accruals & Notifications & Collection Pricing and Accounting Valuation & Reporting

14. STP - Breaking the Myth STP is a multi-channel and multi-dimensional continuum… not limited to transaction (trade) processing

15. ‘Total’ STP HOLDING PERIOD TRANSACTION PROCESSING

16. What is improved through STP? • Faster transmission of settlement instructions • Shortening settlement periods to T+3, T+1, T+0 • Faster/more efficient access to liquidity • Fewer trade failures • Reduced costs • ‘regular way’ trades • cancels/corrections • down stream or round-turn operations

17. Total STP - The Value Proposition The STP ‘chain’ is only as good/strong as it’s weakest link...

18. Total STP - The Value Proposition Inclusive of all critical functions and business processes... • Transaction /trade processing • Portfolio management & risk analysis • External market data and analytics • Compliance monitoring • Accounting, operations, custodial reconciliation • Management fees & billing • Performance measurement • Internal and external customer reporting

19. Total STP - The Value Proposition • Streamlines/automates interrelated processes... • Eliminate work, save time, reduce mistakes • Unlock information • Raises the bar… • Change how your organization does business • Redefines “minimum required functionality” • Results can be quantified and measured • Time to decision, quality of decision • Cost (or lack thereof) to deliver, and to service internal and external clients

20. The Continuum ofInvestment Operations PortfolioModeling Compliance • Data Sources / Providers • Brokers / Intermediaries • Depositories / Custodians • Regulators • Customers Trading, Real-time P&L External ‘Entities’ Compliance Confirmation/ Affirmation Custodial Settlement Investment Accounting Compliance Reporting

21. The ‘Ideal’ Environment Advisory Insurance Mutual Fund Custodians & Other Services Brokerage Services Clients Market Info/Data Advisory Research Insurance Compliance Mutual Fund Portfolio Management Trading Securities Operations Accounting & Reporting Common Investment Database e.g., CAMRA 2000TM

22. SS&C Technologies, Inc Strategies

23. Achieving T+1 SPEED IT UP A LITTLE!

24. Really, it’s an opportunity….. • Operational Review; Utilize your vendor • Interviews with Key Staff • Document and Flowchart Existing Process • Make Recommendations • Implement Recommendations • A Companies Systems, Workflow and Operational Requirements Evolve Over Time • Individual Companies have Limited Internal Capacity and Expertise

25. STP/T+1 • OMGEO Partnership • Antares FIX Connectivity • Pre-Trade Stage - IOIs, Quote Requests, Quotes • Trade Stage - Orders, Status Requests, NOEs, Cancels • Matching Utility Connectivity • Allocations, Confirmations • Data Enrichment, Settlement Instructions • Affirmations, Settlement Notifications • Market Data Connectivity Data Center

26. Infrastructure • Looking for a single solution to manage data andinformation/work flow • Same system, multiple desks or departments • Using one vendor to access others • Access to multiple sources of liquidity • Better spreads • Lower transaction costs • Cost Pressures • Reduced management fees • Lower expense ratios

27. BPR Benefits • Independent Review of Operation • Focuses on Improving Operational Efficiencies • Streamline Processes and Workflow • Enhance Scalability of Organization • Follow Through from Review and Recommendation Through the Implementation

28. Potential Recommendations • More Efficient Workflow Models • Improved Use of Existing Software • Training • Additional Software Tools • Enhancements to Existing Software • Consulting Resources to Implement Agreed Upon Changes • Outsourcing Part or All of Infrastructure and Operations

29. Example BPR Client “Before”

30. Example BPR Client “After”

31. STP with SS&C XETM XE Translation Library

32. Real World Applications • XE for Asset Management - real-time interoperability and ‘guaranteed’ data transfer between internal and external applications • DataCenter - automated financial data and market retrieval via FT Interactive RemotePlus • CapitalSuite – internet portal for investment information analysis, access, delivery and report generation

33. Summary & Questions