DTCC, CLEARSTREAM, EUROCLEAR EXPAND MESSAGING SYSTEM TO SERVE EURO-NOTE MARKET

Posted March 11, 2009

BRUSSELS, LUXEMBOURG and NEW YORK – The Depository Trust & Clearing Corporation (DTCC), Clearstream Banking and Euroclear Bank are expanding the scope of the European Pre-Issuance Messaging (EPIM) system to support the growing Euro Medium-Term Note (MTN) market. EPIM will now automate the pre-issuance communication and International Security Identification Number (ISIN) allocation process for Euro MTNs.

“Bringing automation to the ECP marketplace with EPIM has helped drive down costs for new issuances and enhance efficiencies for market participants,” says Susan Cosgrove, Managing Director, Clearance and Settlement Group, DTCC. “By leveraging the EPIM system to bring automation to the MTN market, we are taking another important step in evolving the infrastructure to meet the needs of financial firms and investors. EPIM will eliminate the time consuming and outdated manual processes of the MTN market and help play a role in spurring long-term growth.”

The Euro MTN market has grown 22 percent over the past two years, from $6.4 trillion (€5.0 trillion) outstanding in early 2007 to $7.8 trillion (€6.1 trillion) in early 2009. “Now we have the opportunity to bring a similar and much-needed degree of operational efficiency to the MTN market, which we believe is essential to foster greater growth in the years ahead,” says Mark Kieffer, Head of Issuance & Distribution Services at Clearstream Banking. “As an increasing number of investors turn to the MTN market, we are now fully prepared to manage pre-issuance communication and issue new ISINs quickly in an automated environment.”

EPIM is being used in a similar capacity within the European Commercial Paper (ECP) and Euro Certificates of Deposit (ECD) markets. Since 2002, it has served as a central messaging hub directly linking dealers, issuing- and paying agents, securities depositories and numbering agencies. This has allowed them to exchange standardized and secured issuance information in real time. By automating pre-issuance information processing and ISIN allocation for new ECP and ECD issues — and now Euro MTNs — EPIM is enabling these markets to grow and to process these transactions for same-day settlement.

“EPIM has brought us closer to achieving full straight-through processing in the European commercial paper marketplace,” says Peter Eisenhardt, Chairman of the International Capital Market Association’s ECP Committee. “Speed is absolutely critical, especially when there’s volatility in the money markets. With EPIM, ISINs are assigned in less than five minutes.”

EPIM significantly reduces manual processing costs for the industry, eliminating the labor-intensive and error-prone phone, fax and email-based communications generated during the ISIN request and allocation processes. Through a streamlined, industry-standard messaging and automated workflow, EPIM increases accuracy and reduces processing errors, discrepancies and delays, while preserving the flexibility that characterizes the short-term debt money markets.

“The ICMSA membership is delighted to see EPIM extend its coverage to MTNs,” says Graham Cox, Chairman of the International Capital Market Services Association. “EPIM has proven to be a great response to the market's need for a secure, efficient and reliable pre-issuance communication tool. Given its capabilities in terms of volume and speed, and contribution towards STP, we encourage the issuing community to adopt the expanded functionality EPIM offers.”