f.a.q.

Omgeo TradeSuite IDSM

Repo FAQ
What are SEC Rule 10b-10 and MSRB Rule G-15? How do these rules impact Omgeo
TradeSuite ID (formerly known as the DTCC ID System)?

SEC Rule 10b-10 requires broker/dealers to provide counterparties with a conrmation disclosing
specic data elements of the trade including the broker-specic disclosures on the back of the conrm.
MSRB Rule G-15, among other things, requires that brokers provide a counterparty to a municipal
www.omgeo.com securities transaction with a conrmation containing all of the information specied by the Rule.

Omgeo petitioned the SEC and received a No Action letter on March 12, 2008 sanctioning the use
ALERT
of Omgeo inSITE as a 10b-10 compliant electronic equivalent of the paper-based conrm disclosure.
Benchmarks In 2009 the MSRB issued similar relief via an Interpretative Notice of September 15, 2009.
Central Trade Manager (Use of Electronic Conrmations Produced by a Clearing Agency or Qualied Vendor to Satisfy the
Connect Requirements of Rule G-15(a))
OASYS
Omgeo has also received two different No Action letters allowing Omgeo to satisfy SEC recordkeeping
OASYS-TradeMatch requirements one for broker-dealers on March 12, 2008 (for the broker-dealer record keeping Rules
ProtoColl 17a-3 and 17a-4), and one on August 19, 2009 under the Investment Advisers Act of 1940 for
TradeHub investment advisers, investment companies and hedge funds (Investment Adviser Act Rule 204-2).
TradeSuite ID
As a result of these letters, TradeSuite ID has been completely enhanced with a new modern regulatory
infrastructure that allows its users to satisfy all of the disclosure and recordkeeping obligations noted
above using electronic communication in lieu of paper. With Omgeo inSITE and TradeSuite ID Conrm
Archive, all details of the front and back of the conrmation are captured and sent electronically,
obviating the need for supplemental paper conrms and eliminating the cost associated with mailing
and archiving.

TradeSuite ID Repo provides an electronic conrm (record 6) and Omgeo inSITE for the conrm backer
(record 5), saving time and cost while facilitating conrmation/afrmation processing.

Does Rule 10b-10 compliance impact FED eligible trades and Repos?

As long as you are trading in securities instruments, SEC Rule10b-10 applies. If an instrument is
derived from a security such as a Repo then, once again, it must comply with Rule 10b-10.
TradeSuite ID Repo fully complies with all relevant SEC regulations.

What is FINRA Rule 11860 (formerly NYSE Rule 387)?

FINRA Rule 11860 states that all Delivery-versus-Payment (DVP) and Receive-versus-Payment (RVP)
trades in DTC eligible securities must be conrmed and afrmed electronically via a clearing agency or
qualied vendor.

In 2001, the SEC issued an order granting Omgeo an exemption from registration as a clearing agency
enabling Omgeo to satisfy the clearing agency requirement of FINRA Rule 11860. As a result, Omgeo
offers clients an efcient and fully compliant solution for electronic conrmations and afrmations of all
depository eligible transactions. Omgeo is the only company able to do this.

TradeSuite ID allows electronic conrmation and afrmation of DTC eligible securities

and if afrmed these are delivered to DTC on noon of T+2 for settlement.

A DTCC I Thomson Reuters Company

What is the SEC no-action letter Omgeo received for paper elimination?

Omgeo petitioned for and received a No Action letter from the SEC on March 12, 2008 that cleared the way for Omgeo InSITE.
The letter stated that the use of electronic conrmation disclosures in lieu of paper delivery would not result in enforcement action.
As a result, Omgeos conrm disclosure service (Omgeo inSITE) satised 10b-10 delivery requirements. In addition, as noted
above, the MSRB Rule G-15 issued similar relief based up the SECs No-Action letter: http://www.msrb.org/Rules-and-
Interpretations/MSRB-Rules/General/Rule-G-15.aspx?tab=2#_A2895CEF-F903-4149-9280-7D6E57AB5006.

The ability for brokers to send conrm disclosures electronically and for counterparties to be able to view the electronic conrm
with all broker-specic disclosure information, represents a huge time and cost savings for the entire industry, which no longer
needs to mail, process and store paper conrms. Brokers no longer have to sign one-off paper elimination agreements with
each client like done in the past they can simply utilize Omgeo inSITE to shut off paper for institutional clients on TradeSuite ID.

For broker/dealers, what are the benets of utilizing Omgeo inSITE vs. building
your own portal for storing conrm disclosures?

Omgeo has gone through great lengths to develop comprehensive and efcient solutions for post-trade processing that allow
you to effectively outsource your Rule 10b-10 and Rule G-15 disclosure requirements to Omgeo. In addition, because of the
two record-keeping No-Action letters previously noted, you can also outsource to Omgeo your conrmation recordkeeping
obligations to Omgeo under the Exchange Act of 1934 and the Investment Advisers of Act of 1940.

There are many benets to using Omgeo inSITE to store conrm disclosures vs. building your own portal:

Decreasing operational complexity and risk: Omgeo inSITE, which was sanctioned by an SEC No Action letter of March
12, 2008 and subsequently by the MSRB in an interpretative release, offers a standardized and electronic solution to an industry-
wide problem -- dealing with the burden of disclosures required by SEC Rule 10b-10 and MSRB Rule G-15. Utilizing Omgeo
inSITE enables you to rely on Omgeo for conrm disclosure vs. having to build/maintain your own portal, and also enables your
counterparties to simply rely on one solution to solve the conrm disclosure problem.

Improved recordkeeping and decreased compliance burden: Through Omgeo inSITE, rms can completely outsource this
regulatory, operational and administrative burden with condence. Omgeo inSITE is a web-based repository that stores conrm
disclosures, which have been enriched with a URL for backer information. Counterparties can access and view this disclosure
information electronically, thereby eliminating the costs associated with document storage.

Decreased regulatory exposure: Broker/dealers do not have a No Action letter from the SEC and users of their services
might encounter downstream issues with FINRA, SEC examiners or enforcement attorneys. Sanctioned by the SEC through the
No Action letter of March 12, 2008, Omgeo offers legal certainty that our solutions meet all disclosure requirements.

Decreased systemic risk: By utilizing Omgeo inSITE vs. building your own portal, you decrease the burden on your counter-
parties operational back-ofce processes, which could interfere with and ultimately slow settlement cycles.

Rather than increase complexity, TradeSuite ID streamlines processes and accelerates post-trade/pre-settlement clearing,
thereby reducing counterparty risk.

Can you stop supplementing paper conrms if you are using TradeSuite ID? What is the compliance angle here?

In order for broker/dealers to eliminate the need for paper conrms, the electronic conrms sent to their clients must include all
the disclosures historically placed on the back of the conrm. This means using both TradeSuite ID and Omgeo inSITE. As a
result of Omgeos SEC No Action letters, sell-side rms can use TradeSuite ID to submit clean, fully electronic conrmations in lieu
of paper conrms without risk of compliance breach. The No Action letters essentially state that access to electronic conrmation
disclosures will satisfy the conrmation delivery requirements of 10b-10. Please note that certain dedicated elds must be
entered as free form text in the special instruction elds on the TradeSuite ID conrm. Clients can view the Trade-
Suite ID certication guide for details which is posted within the Documentation section of Omgeo.com.

Using TradeSuite ID and Omgeo inSITE increases efciency, decreases risk and promotes best practices for regulatory compliance.
Do buy-side Omgeo Partners need to code to record 6 if their underlying clients wish to process Repos?
What about sell-side vendor partners?

Yes, both buy- and sell-side vendor partners need to provide all relevant details in record 6 of TradeSuite IDs conrm/afrm
screens to properly identify a Repo transaction. In addition, vendor partners would need the ability to process Repo
security types within their own application in order to support clients who wish to process Repos.

Once the partner can take in record 6 and can process Repo transactions, the partner can support their underlying clients
who currently trade in Repos and can eliminate the need to receive the paper conrms.

Which Omgeo vendor partners have coded to record 6 and are certied to process Repos?

On the sell side, Broadridge (impact) has coded to record 6 on the conrm and can successfully process Repo transactions.

How does the Broadridge PostEdge solution differ from Omgeo inSITE?

Broadridge PostEdge is an electronic document management and archival system targeted at the sell-side community.
Broadridges focus on the retail market is complementary to Omgeos offerings, which focus on the buy-side.

Brokers can use PostEdge as an additional service to Omgeo inSITE. However, PostEdge is not a replacement to Omgeo
inSITE, and here are the differences:

Omgeo inSITE disseminates disclosures to Investment Managers. PostEdge does not.

PostEdge archives paper conrms provided in a variety of formats. Omgeos entire conrm process is electronic,
eliminating all paper and increasing efciency. TradeSuite ID electronic conrms are enriched with a URL and reference
number associated with a conrm disclosure so users have access to the front and back of the conrm.

PostEdge delivers conrms in physical form to predened destinations whereas Omgeo inSITE provides a central
web-based repository for broker/dealers to post their conrmation disclosures.

Omgeo is the only vendor approved by the SEC for electronic archiving of trade conrmations for buy-side participants.

For those broker/dealers accessing TradeSuite ID via a proprietary interface, how do they get started processing
Repos (adding record 5 & 6)?

Record 6 is specic to Repos. Record 5 contains import 10b-10 elds as well as free format elds - see the spec at
www.omgeo.com/documentation.

A broker/dealer that is looking to begin processing new records (record 2, 3, 4, 5, or 6) would need to sign an Omgeo Statement
of Work (SOW) with Omgeos Integration team. The SOW would vary in size and scope depending on the testing scope. If the
client is already on TradeSuite ID 7.1 (record 2 and 5 already turned on) and they are just looking to add repos, the SOW would
be about 20 hrs. A regular TradeSuite ID 7.1 upgrade project is approximately 80 hrs.

The broker would need to have client test connectivity setup, and this would require setup both with Omgeo and the DTCC PIP
group. Omgeo Integration would run the broker through conformance testing and work to bring them live into production as well.
What buy-side clients are currently turned on to receive Repo conrms?

Omgeo is currently working on a Repo Client Directory that will include all TradeSuite ID Direct clients that have turned on
record 6 and all TradeSuite ID 7.1 workstation institutions that can already access Repo conrms.

Being part of a global community delivers enormous benets to our clients from compliance and best practices to enhanced
automation and efciency. The directory is expected to be ready Q3 2012 and will be available on the omgeo.com Client
Center (www.omgeo.com/clientcenter).

Which broker/dealers are currently using Omgeo inSITE with record 5? Which are sending Repos with record 6?

A list of the many broker/dealers using Omgeo inSITE with record 5 is expected to be available Q3 2012, and as stated above
will be available on the Omgeo.com Client Center (www.omgeo.com/clientcenter).

If I am a prime broker, do I need to code to Record 6 to receive a Repo conrm?

Yes if you are a prime broker that participates in the Repo market and wishes to eliminate paper by receiving an electronic
conrm from the executing broker, then you must turn on Record 6, which contains Repo-specic information, in order to
receive data.

If I am a custodian, do I need to code to Record 6 to receive a Repo conrm.

Custodians have a duciary responsibility for their actual client to receive the conrm from the broker/dealer with all relevant elds
and disclosures. As with the prime broker, if you participate in the Repo market and wish to eliminate the paper conrm, you have
the option to turn on Record 6 to receive the conrm electronically.

How does archiving work for Repos?

Archiving works the same for Repos as for any other instrument processed through TradeSuite ID. Since TradeSuite ID
automatically archives conrms, any client that subscribes to TradeSuite ID Conrm Archive, a web-based self-service system,
can search and retrieve conrmations that have been electronically stored by Omgeo.

TradeSuite ID initially maintained an archive for seven years, dating back to 2004. That has recently been expanded to 10 years
of conrmation history, which far exceeds regulatory requirements for retention and safekeeping of electronic documents. Once
ten years of history is accumulated, the oldest conrmation archive report is purged to make space for new data.

TradeSuite ID Conrm Archive for Repos is a reliable and secure solution that improves efciency by streamlining the archive
process, reduces overhead associated with storing paper and promotes best practices for document storage. Asset
managers adopting Conrm Archive are asking their brokers to utilize TradeSuite ID for all product types to support a single
source for conrm archiving.

What are the benets of processing all xed income trades using TradeSuite ID?

TradeSuite ID provides a one-stop shop for post-trade processing that enhances compliance, improves operational
efciency and reduces risk. To comply with SEC Rule 10b-10, broker/dealers are required to send a trade conrmation containing
specic disclosure information on the Repo trade to clients. With TradeSuite ID, which provides an electronic conrm (record 6)
and inSITE for the conrm backer (record 5), broker/dealers can eliminate paper conrms while still meeting all regulatory mandates.

More and more asset managers are also electing to process their xed income trades through Omgeo and match via Omgeo
OASYS-TradeMatchSM, which requires broker/dealers to submit a conrm for xed income product types including FED eligibles.

Eliminating paper saves clients the labor, processing and storage costs associated with paper conrms while providing easy
access to all economic details of a trade. Through integration with Omgeo ALERTSM, Omgeo Central Trade ManagerSM and
Omgeo OASYSSM, clients benet from the efciency of a complete post-trade and settlement lifecycle solution while balancing
value and cost.
 Why does a Repo trade need to be afrmed? What is the risk if it is not?

Yes, afrmation is critical to the settlement process and prevents parties from running blind between trade date and settlement
date. The afrmation provides the broker/dealer with an electronic acknowledgement of all trade details. If the Repo trade or
any trade is not afrmed, then the counterparty risk increases and there is a greater possibility that the trade may have an issue
on settlement date. Broker/dealers take on additional manual tasks such as time-consuming phone calls and emails in order
to reduce this risk and avoid settlement problems.

The sooner a trade is afrmed, the sooner the counterparties can rest assured that everything will go smoothly at settlement.

Does Omgeo have any plans for three-way matching for FED Tri-Party Repos?

Omgeo currently has no plans to enable three-way matching for FED tri-party Repos. Any client wishing to engage in a Tri-party
Repo will have to back into it by processing the legs separately.

OASYS does offer some level of Repo allocation but it does not support matching. Omgeo CTM is expected to enable bi-lateral
matching for Repos in the future.

Where can I go for more information on TradeSuite ID and Repo trade processing?

Please visit www.omgeo.com/tradesuite for more information. For technical documentation, please visit
www.omgeo.com/documentation.

Copyright 2012 Omgeo LLC. All rights reserved. All Omgeo service names appearing herein are either registered trademarks or service marks of Omgeo LLC in the United States and
elsewhere. Several Omgeo services are regulated by the U.S. Securities and Exchange Commission. For more information, please visit www.omgeo.com/regulation. JP 04/2012

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