Contents Contents...2 Disclaimer...5 Document History...6 Introduction...7 Key Concepts... 12

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2 Contents Contents Contents...2 Disclaimer...5 Document History...6 Introduction...7 Background...7 Corporate Actions Transformation and ISO Messaging...7 Phased Approach...7 Purpose of This Guide...8 Client Resources and Documentation...8 DTCC Website...8 DTCC Asset Services Learning Center...8 Documentation...9 Market Consultation and Feedback for ISO Messaging ISO Benefits Key Concepts ISO Corporate Actions Data Model Multiple Events Identification Event Types Sub Event Types Mandatory/Voluntary Indicator Narratives DTCC Workflow Status ISO Message Data Message Structure ISO Message Delivery and Network Protocols Getting Started With Corporate Actions ISO Announcements Messaging 2

3 Contents Subscription Options CCF Legacy File Interface and Scheduling Data Files and Messaging Co-Existence Technical Transition Considerations Customer Testing DTC Services DTC - Canadian Dollar Settlement Foreign Tax Services Foreign Currency Payments (FCP) DRIP Program Documentation Guide Supporting Documentation Corporate Action Data Dictionaries Corporate Action Event Scenarios Event Type Nature of the Event and Option Type Default Option Payout Details & DTC Legacy values Use of data provided Legacy Mapping Spreadsheet Message Usage Guideline (MUG) How to Use Supporting Documentation to Map from CCF to ISO Onboarding: How to get started Contact Information Network Considerations ISO Mapping Client Support Appendix A: DTCC Implementation of ISO DTCC Naming Conventions Getting Started With Corporate Actions ISO Announcements Messaging 3

4 Contents Supplementary Data (Extensions) Notation Getting Started With Corporate Actions ISO Announcements Messaging 4

5 Disclaimer Disclaimer This document is being made available by DTCC for information purposes only. Please refer to the Corporate Actions Transformation technical documentation section of for further information. Getting Started With Corporate Actions ISO Announcements Messaging 5

6 Document History Document History July 2015 Note: This document was previously titled DTCC Corporate Actions Product Migration Guide for Adoption of ISO Messaging. Getting Started With Corporate Actions ISO Announcements Messaging 6

7 Introduction Introduction Background Corporate Actions Transformation and ISO Messaging DTCC s Corporate Actions Transformation initiative is transforming how DTCC processes and communicates with its participants and clients, across the whole corporate actions lifecycle from announcement through to payment. The goal of the multi-year transformation initiative is to reduce cost and risk to the industry by creating a new data model, adopting ISO messaging and introducing a new user interface. The initiative is being implemented in phases over the course of the next several years, with the eventual retirement of proprietary CCF file formats and PTS/PBS functions supporting Distributions, Redemptions and Reorganizations. The initiative introduces three major changes to the way DTCC processes and communicates corporate action activity: A new data model based on event data and business process replaces existing function and activity codes ISO messaging is used for automated electronic communication between DTCC and its clients. DTCC utilizes supplementary data structures (also known as extensions ) to communicate critical data that is not available as part of the core standard A new browser based user Interface called Corporate Actions Web (CA Web) replaces corresponding PTS/PBS functions for corporate actions announcements, entitlements, allocations and adjustments, as well as provides the facility to input instructions In addition to the work completed on its data model and message structures, DTCC continues to work with other organizations to promote the use of ISO standards. These include SWIFT (Society for Worldwide Interbank Financial Telecommunication), as well as industry groups including SIFMA (Securities Industry and Financial Markets Association) and ISITC (Industry Standardization for Institutional Trade Communication). Phased Approach Since the project s initiation, DTCC has taken a phased approach to the transformation initiative by building a corporate actions data model, mapping existing messages and data elements onto equivalent ISO messages and message components, holding a pilot testing exercise with selected market participants focusing on the announcement phase, and holding a parallel testing period for distribution and redemption event lifecycle functionality, including elective dividend (EDS) instructions. Getting Started With Corporate Actions ISO Announcements Messaging 7

8 Introduction Over the past several years, DTCC has also worked with members of the U.S. and global market to introduce a number of changes to ISO to accommodate some of the industry s most significant requirements. The close collaboration with clients and the aforementioned groups has resulted in the delivery of cost savings and risk reduction in the form of ISO messaging and CA Web. ISO messages for the announcement of corporate actions have been in production across the SWIFT and DTCC SMART MQ networks since November 21, These announcements cover the full range of corporate actions (distributions, redemptions and reorganizations). DTCC has been progressively introducing additional messages. The full lifecycle of messages for distributions, redemptions and reorganizations became available in production for testing in February 2013, followed by distributions instructions messaging in April Lifecycle messages for redemptions are available for parallel production testing beginning in Q Reorganizations lifecycle and instructions for reorganizations will be added as the project progresses. Click here for a project timeline. CA Web was introduced on June 23, 2014 for parallel production testing and was deployed to production for Distributions lifecycle processing on March 30, Purpose of This Guide The purpose of this document is to introduce some of the major changes associated with the initiative, and provide a guide to the documentation available to help DTCC clients migrate to the new ISO messages and data model. Client Resources and Documentation DTCC Website The DTCC website ( is the primary repository for general information and documentation concerning the transformation initiative. Clients can review the published documentation and use the website to stay up to date on new developments. See: DTCC Asset Services Learning Center The DTCC Asset Services Learning Center hosts a variety of training materials including webcasts, user guides, videos, recordings of live demonstrations, job aids such as quick tips and FAQs. The Learning Center can be accessed at: Getting Started With Corporate Actions ISO Announcements Messaging 8

9 Introduction Documentation To support system development needs for DTCC clients, the following Technical Documents and Specifications can be found at: Getting Started With Corporate Actions ISO Messaging (pdf): This document. ISO Message Specifications for Announcements (zip): Provides guidance to the message schemas: data element definitions, formats, DTCC synonyms, and extended elements for announcement and cancellation messages. ISO Message Specifications for Corporate Actions Distributions Entitlements and Allocations, Instructions and Proxy Meetings (four separate zip files): Provide guidance to the message schemas: data element definitions, formats, DTCC synonyms, and extended elements for the remainder of the lifecycle covering elections, entitlements and proxy meetings. User Guide: ISO Messaging for Distributions Entitlements and Allocations (pdf): Provides an overview and detailed explanation of the ISO message flows used in the distributions lifecycle with a focus on entitlements and allocations. User Guide: ISO Messaging for Distributions Instructions (pdf): Provides an overview and detailed explanation of the ISO message flows used in the distributions lifecycle with a focus on accepting instructions from clients. User Guide: ISO Messaging for Redemptions (pdf): Provides an overview and detailed explanation of the ISO message flows used in the redemptions lifecycle. Documentation regarding Legacy Mappings can be found at: Legacy Data Files: Provides a list of existing DTCC data files that will be replaced by ISO messages under this initiative. Mapping Legacy to DTCC New Model (xls): Identifies relationships from the legacy CCF fields, by file, to the new data model data element name. ISO Entitlement, Payments and Allocations Mapping (xls): Enables users to map from legacy CCF files to ISO publication files for record date position capture, projected payments and payments. Documents providing detailed mappings of event types to function/activity codes can be found at: Corporate Actions Scenario Documents (zip): Identifies event scenarios with specific one to one mapping relationships between DTCC s new data model and its legacy systems. Getting Started With Corporate Actions ISO Announcements Messaging 9

10 Introduction DTCC Corporate Action Data Dictionaries (xlsx): ISO event types and data elements with mapping from DTC s legacy function code based data model. The documentation will be revised as needed to reflect appropriate changes identified from the review processes. Market Consultation and Feedback for ISO Messaging DTCC has held, and will continue to hold working group sessions and industry consultation sessions with key market participants and clients, and will continue to consult with industry bodies throughout the process. DTCC also ran a pilot program before the launch of the new announcement process and continues to work closely with the industry as important deadlines approach. While testing, clients may submit inquiries and/or comments to the CA Transformation mailbox (CATransformation@dtcc.com). All production inquiries should be directed to the customer help center at ISO Benefits Since the creation of DTCC's depository in 1973, it has utilized its own proprietary formats for corporate actions processing. So why switch to an international standard, and why ISO 20022? DTCC recognized that it needed to respond to an ever-changing environment and be able to accommodate what was becoming a global investment business. DTCC's clients had expanded their businesses throughout the world and wanted to streamline, as much as possible, the standards and formats used to communicate. ISO meets those needs and offers a host of benefits, including: Flexibility both in terms of its content and tailoring of output. As new corporate actions are developed, the messaging standard can change to meet the demands of the business, not the other way around. XML Syntax due to its widespread support, XML allows for easier processing and more efficient yearly maintenance. Schema Validation used to confirm that each data element is populated with a valid value. Greater Straight-Through Processing (STP) corporate action events will be announced using a data model that conforms to market practice, which also contains less narrative or free text and more fielded and tagged data. Unique Corporate Action ID for Each Event can be tracked through the life cycle of the event from announcement, to election, entitlement, and payment. Enhanced Data Elements a more comprehensive and granular number of data elements, which allows for greater accuracy and, ultimately, less processing risk on the part of the customers. Maintenance the yearly standards process requires DTCC to constantly review, scrutinize and maintain its standard to ensure compliance with market practice. This in turn will lead Getting Started With Corporate Actions ISO Announcements Messaging 10

11 Introduction to less ad hoc maintenance and instead institute a systematic approach to the business rules driving the file formats, not the other way around. A Global Standard In defining a new model for U.S. and global corporate actions, DTCC worked closely with SWIFT, ISO 20022's registration authority. DTCC then worked with the Securities Markets Processing Group (SMPG) and the International Securities Association for Institutional Trade Communication (ISITC) to develop proposals for changes to the ISO standard as it related to corporate actions, which were reviewed and approved by the Securities Standards Evaluation Group (CA SEG), a group of international industry experts who accept or reject changes to the ISO standard s repository. DTCC then presented the proposals to the Corporate Actions Maintenance Working Group, a group that is responsible for all annual ISO standard release changes for evaluation and admission for the final country vote. Getting Started With Corporate Actions ISO Announcements Messaging 11

12 Key Concepts Key Concepts This section outlines some of the key concepts in the DTCC corporate actions transformation. These are: The use of ISO messages and data model; The changes resulting from the new data model; The resulting message structure (taking a corporate action announcement as an example); The methods of communication with the new DTCC systems. ISO DTCC is committed to migrating from existing proprietary corporate action data files to the global ISO financial messaging standard. ISO is founded on modern data modeling techniques and business process analysis. Central to the standard is a global, cross-functional data dictionary and business process model. By aligning with these components, DTCC will provide clients with increased operability within their own systems and with other external processes. While moving towards the ISO standard adheres to the general movement away from proprietary formatted files, there are data elements and codes within the DTCC data model that do not exist within the ISO corporate action announcement messages. To accommodate these additional data elements with the ISO messages, DTCC will make use of the facility within such messages to include supplementary data specific to a market or community. The supplementary data structures (also referred to as extensions ) allow DTCC to provide an agreed-upon and machine-readable structure within the messages for those data elements that have not been globally agreed to form part of the main message. Note that the structure of the extension must be validated by the ISO community and registered within ISO 20022, and this process includes the addition of the elements to the ISO data dictionary. This allows for improved interoperability while avoiding an impact on the messages themselves which may have been implemented in other communities. In time, it is hoped that many of the elements initially placed in the extension structures will be accepted into the standard message globally. To that end, DTCC is working with the National 1 and Global 2 Market Practice Groups to enhance the ISO standard. Other elements may be required only for coexistence with the existing DTCC systems, or may not be accepted globally, and will thus remain in the extension structure for the foreseeable future. 1 The U.S. Securities National Market Practice Group is ISITC. See 2 The Securities Market Practice Group, SMPG. See Getting Started With Corporate Actions ISO Announcements Messaging 12

13 Key Concepts Changes to the ISO standard occur annually, in November, and require DTCC and its clients to accommodate specific changes which will require revisions to the technical documents provided by DTCC and clients systems. More information on the ISO standard can be found at Corporate Actions Data Model The ISO data model for corporate actions differs in several key respects from DTC legacy systems. The customer browser interface known as Corporate Actions Web (CA Web), is aligned with the ISO standard and matches the ISO model closely, but there are still differences, noted below. The main differences between the legacy DTCC data model and that adopted for the corporate actions transformation initiative are identified in the following list, and subsequently explored more thoroughly in the sections that follow: In the legacy data model, a complex event is sometimes split into multiple events with multiple function codes for processing purposes. An example of this is the delivery of rights in a distribution event, followed by an elective event to exercise those rights. The identification of the event is a key component in the ISO model. A corporate action identification number (CA ID or COAF as it is known in ISO 20022) is issued by DTCC for each DTC-eligible event and will remain consistent throughout the life of the event. DTCC will provide this official reference number ONLY through an ISO message for DTC-eligible securities. ISO uses its own set of event type codes to define the event and how it must be processed; in some cases the level of granularity is different from DTC function codes. A critical data item for each event is the mandatory/voluntary indicator, which shows whether an event is mandatory without options, mandatory with options or voluntary. ISO seeks, wherever possible, to avoid the use of narratives and free text; there will, however, still be occasions where data must be supplied in text form. Multiple Events In the existing DTC model, some complex events are defined using multiple envelopes and function codes. The new model is able to define a single event with multiple options and payouts to account for the complexity of the event. Where the event complexity is such that processing is facilitated by multiple events, the events will be linked by reference. Where the market itself defines multiple events, they are linked by reference in the new model (see identification, below). DTCC also provides the possibility, through the browser, to view related events for the same CUSIP or CUSIP family. Getting Started With Corporate Actions ISO Announcements Messaging 13

14 Key Concepts A comparison of the approach to multiple events is summarized below: Feature Old DTC Function Code Model The New ISO Model Single event as defined by the market Multiple events as defined by the market Multiple events as defined by DTC Multiple envelopes and function codes represent a single event where complexity exists. Linked through the use of text. Multiple events are processed through function and activity codes with linking verbiage in the comment text. Single event provides all details using multiple options and payouts to account for event complexity. Event linking provided dynamically via reference to the event identifier (Related Event ID) and link type describing association/relationship. Related events (same CUSIP or CUSIP family) are displayed in the browser (not included in messages). To facilitate processes at DTC some events may be announced as multiple events. Those events will be linked via reference to the event identifier (Related Event ID) and link type describing association/relationship. Identification The ISO data model includes a number of identifiers for an event. The Corporate Action Event Identification must be populated by any institution (data providers or account servicers) that sends event announcements. This identifier is then referenced in any further communication (replacement announcements, or subsequent processing) for that event by that institution. In addition, the Official Corporate Action Event Identification (CA ID or COAF as it is known in ISO 20022) is a unique event reference for the event, and is assigned by a designated body within each market. DTCC will publish the Official Corporate Action Event Identification on DTC eligible securities on its ISO messages. This new identifier will not be incorporated into legacy files. Where applicable, related events will be linked using the Corporate Action Event Identification. For example, the relevant Event Identifications will be listed on each event where two or more events should be taken together to understand a complete event, or where the events have a material impact on each other. Getting Started With Corporate Actions ISO Announcements Messaging 14

15 Key Concepts Event Types DTC s legacy system generated announcements using Function and Activity Codes that related to event types. The event lifecycle was processed using these codes. DTC also had specific function codes for issue types. For example, Partial Call was announced under FC 74 for a Corporate Bond and FC 76 for a Municipal Bond. The transformation initiative introduces the ISO aligned corporate action event types. All existing DTC Function Codes and Activity Codes have been replaced with these new event types. In general, the new event type defines the event without reference to the security type, processing flags or the mandatory/voluntary indicator, although some exceptions apply. DTC defined event types in some cases are more granular than ISO e.g., Maturity, Warrants Redemption, Termination are all represented as Final Maturity (REDM) in ISO Event Type value. These more granular DTC event types will be identifiable by either using additional elements in the message, like: EventProcessingType or use of extensions like ExtendedEventGroup. Sub Event Types Most of the DTCC defined event types in combination with sub event types have one corresponding ISO event type. However, there are instances where more than one DTCC defined event type (+ sub event type) will be represented by one ISO event type, and also where some DTCC defined event types do not have a corresponding ISO event type. A complete list of DTCC defined event types and sub event types and their corresponding ISO codes are available in the DTCC Corporate Actions Events Dictionary. Finally, a few of the DTCC new events have been mapped onto the generic other ISO event type code. These events can be distinguished using existing message elements whenever it is possible or by using extensions. The following table lists the event types mapped to other (OTHR). Event Name Usage ISO Event Type Code Mapping Additional Qualifier (Message Element) Distribution A distribution by the issuer that is not classified as another specific event. OTHR (Other) (ISO) EventProcessingType: DISN General Information General information provided by the issuer that should not result in material changes to the security. OTHR (Other) (ISO) EventProcessingType: GENL Reorganization A reorganization event announced by the issuer that cannot be classified as another event. OTHR (Other) (ISO) EventProcessingType: REOR Getting Started With Corporate Actions ISO Announcements Messaging 15

16 Key Concepts Mandatory/Voluntary Indicator The new corporate action event types will also include a notation as to the nature of the event, which will be one of the following: Mandatory (MAND): Events that occur without representation from the holder. These can be driven unilaterally by the issuer or as an attribute of the security. Examples are: Cash Dividend and Maturity. Voluntary (VOLU): Events that require an election, or not, from the holder. For example, Tender Offer and Rights Subscription. Mandatory with Options (CHOS): Events that are mandated by the issuer/offeror but where a choice of entitlement is offered. The holder can make an election or not respond and receive the default option. For example: Dividend with Options and Merger with Elections. Narratives A key goal of the ISO standard is to reduce the amount of data sent as free text, thus increasing straight-through processing (STP). In the DTCC implementation of ISO 20022, a number of different narrative fields will be used to further clarify details of the event: Terms (mapped to ISO InformationConditions): Provides a summary of the event in a manner that will enable message recipients to send the information directly to their clients. Restrictions: Event restrictions are key details that need to be easily identified and understood by all parties. Restrictions Text occurs at two levels: o Restrictions (mapped to ISO InformationToComplyWith): Details restrictions that apply to the event. o Restrictions on Disbursed Security (Payout Level, mapped to SecurityRestriction): Details restrictions that may be applied to the new security, including where the new security is not DTC eligible and needs to be exited. Comments (mapped to AdditionalText): Critical information regarding specific processing about the event. Vendor (mapped to NarrativeVersion): Information supplied by the data vendor. Option (mapped to OptionsDetails/ NarrativeVersion): Provides a summary of the option provided in a manner that will enable message recipients to send the information directly to their clients. DTCC Workflow Status DTCC s new data model contains different internal workflow statuses that ultimately map to the ISO standard workflow statuses. The chart below will help you to understand those statuses and how they ultimately relate to what you will receive via the ISO message. Getting Started With Corporate Actions ISO Announcements Messaging 16

17 Key Concepts ISO EventCompleteness Status ISO EventConfirmation Status Message Type Cancellation Reason Code Workflow Status Workflow Status Description Description Indicates whether the details provided about an event are complete or incomplete. Indicates the status of the occurrence of an event. ONLY for Cancellation advice message. AP Approved All of the required data has been populated. Any conflicting data has been resolved. Either all information was in agreement (STP) or if manual validation was necessary, authorized review and changes/updates were performed. CA Conditionally Approved Announcement has been confirmed but not all of the required data is available. Event was validated or a specific STP criteria was met, however, data is still pending confirmation of the event. CN Cancelled Event has been cancelled by the Issuer/Offeror. COMP CONF CANO INCO CONF CANO COMP CONF CACN WITH Getting Started With Corporate Actions ISO Announcements Messaging 17

18 Key Concepts ISO EventCompleteness Status ISO EventConfirmation Status Message Type Cancellation Reason Code Workflow Status Workflow Status Description Description Indicates whether the details provided about an event are complete or incomplete. Indicates the status of the occurrence of an event. ONLY for Cancellation advice message. CT In conflict Two or more sources disagree on significant number of data elements. DE Deleted Announcement record has been deleted/removed as an invalid record. IN Incomplete Required data is not available. Announcement record cannot be verified. PA PC Pending Approval Pending Cancelled Validation review was performed and event has been modified. Event record is pending authorized approval. Validation has determined event is being cancelled by the issuer/offeror. Pending authorization. INCO UCON CANO COMP UCON CACN PROC INCO UCON CANO INCO UCON CANO INCO UCON CANO Getting Started With Corporate Actions ISO Announcements Messaging 18

19 Key Concepts ISO EventCompleteness Status ISO EventConfirmation Status Message Type Cancellation Reason Code Workflow Status Workflow Status Description Description Indicates whether the details provided about an event are complete or incomplete. Indicates the status of the occurrence of an event. ONLY for Cancellation advice message. PN Pending Conditionally Approved Announcement has been confirmed but not all of the required data is available. Event record pending authorization. INCO UCON CANO PD Pending Deleted Validation has determined the announcement record to be invalid. Event record pending authorization. INCO UCON CANO Getting Started With Corporate Actions ISO Announcements Messaging 19

20 Key Concepts ISO Message Data ISO market practice views information based on the sender of the message (usually an Asset Servicer). DTCC issues data in its role as a Central Securities Depository (CSD) and generally, reflects the key data provided by DTC in the core message. Data provided by the issuer is included in the message extension as supplementary data. As a rule, data fields with names beginning with the word Declared indicate that they were provided by the issuer. Likewise, data field names beginning with DTC indicate the data was provided by DTC. Messages will be constructed with a core standard message mapping required (for processing), and a supplementary extension. The following examples illustrate the data mapping methodology: For a Cash Dividend event, its payout data fields will contain DTC Cash Rate and Declared (issuer) Gross Rate. DTC Cash Rate will be mapped to the core standard part of the message and Declared Gross Rate will be extended as supplementary data. DTCC CANO: DTC Data is primarily in core message Extension: Issuer Data is supplemental In most cases, the same options will be offered (announced and processed) by both the Issuer/Offeror and by DTC. However, on occasion, there will be options offered by the issuer that are not processed by DTC, while at other times it may be that DTC offers an option that is not offered by the issuer. The message will contain all known options for the scenarios outlined above. Each option will be flagged if it is not processed by DTC or if it is not offered by the issuer. It is also possible that the default option differs depending on source of the option: DTC or Issuer. These will also be flagged where appropriate. Getting Started With Corporate Actions ISO Announcements Messaging 20

21 Key Concepts The following table summarizes the DTC and Issuer Options scenarios: Option Scenario Issuer Supported Option Flag DTC Supported Option Flag Remarks Issuer offers the option. DTC supports (processes) the option. Issuer offers the option. DTC does not support (process) the option. Issuer does not offer the option. DTC supports (processes) the option. Y Y No special tag in the message. Option support by the Issuer and DTC is assumed unless specified otherwise. Y N Option Features element in the core message will have code NOSE to identify this scenario. Securities must be delivered out of DTC for participants wishing to take part in the specific event option. N Y Option Features element in the core message will have code AVSO to identify this scenario. The option is not supported by the Issuer - only DTC participants can take part. The following table summarizes the DTC and Issuer default Option scenarios: Option Scenario Issuer Supported Option Flag DTC Supported Option Flag Remarks Issuer offers the option. DTC supports (processes) the option. Both DTC and Issuer announce it as the default option. Issuer offers the option. DTC supports (processes) the option, but announces different options as the default (DTC DRIP). Y Y Note: Events with a single option are required to have a default option, even if a mandatory event, per ISO standards. Y N Getting Started With Corporate Actions ISO Announcements Messaging 21

22 Key Concepts Option Scenario Issuer Supported Option Flag DTC Supported Option Flag Remarks DTC does not support Issuer s Default Option. Y N DTC has an additional option (that Issuer does not offer) that option is designated as default at DTC. N Y The primary creators of corporate action content are the issuer / agent, depository and the stock exchange. DTCC s data model, and to some extent ISO, accommodates the different owners of the information either explicitly or implicitly. While the ownership of specific data elements is mostly straightforward, there are some concepts that DTCC will differentiate, as DTC data and Issuer data are not noted as such in the ISO model. The following table provides a summary on data element ownership : Scenario Details Example DTC Only Information Issuer Only Information Stock Exchange Only Information Information that is created by DTC in its capacity as the Depository for DTC eligible securities or for DTC specific services. The data element will be prefaced by DTC. Information only supplied by the issuer. Does not have specific notation. Information only supplied by the stock exchange. Does not have specific notation. DTC Last Day for Deposit DTC Chill Release Date for Deposit Record date Proration date Ex-date Getting Started With Corporate Actions ISO Announcements Messaging 22

23 Key Concepts Scenario Details Example DTC and Issuer Data Elements Similar information that both the issuer and DTC provide. Custodian data is usually prefaced by DTC and the issuer by Declared or Actual. Actual Expiration Date Declared Cash Rate DTC Instruction Expiration Date DTC Cash Rate Message Structure The DTCC corporate actions data model is aligned with ISO. There are, however, differences in the representation. This section will explain the relationship between the two models using a corporate actions announcement as an example. The DTCC Corporate Action Model has several levels. The levels are associated with ISO Corporate Action Notifications either directly or based on a condition. The multiplicity (noted using UML notation as 0 1, 0 in the Message Usage Guideline for the CANO) is displayed for levels and message building blocks, as well as for associations between the DTCC levels and the ISO message building blocks or components. Details on the payload (core and extension) of the ISO message will be explored in depth immediately below. In addition to the core and extension component of the message, there are two header components to be aware of: Network Header different formats for the SWIFT and SMART networks Business Application Header (BAH) Standard for all DTCC ISO messages The payload of the message is where you will find important business information related to the corporate action event. It consists of the core and the extension components. The core consists of a number of data levels, a hierarchy of logical groups that contain related information. The main data levels are: Event level: data that applies to the entire corporate action, such as the event type, and mandatory/voluntary indicator; the level is mandatory and non-repetitive; Option level: data that applies to a single option only, such as the option number, option type, and whether the option is supported by DTC and/or the issuer. Note that in the ISO data model, even a mandatory event with a single payout is defined as having one option; and, Getting Started With Corporate Actions ISO Announcements Messaging 23

24 Key Concepts Payout level: data for each payout such as the identity of the outturn security or the rate of the security or cash payout; there may be one or more payouts per option; payout levels are distinguished by a payout number (sequential order) and payout type. These data levels are also built into the structure of the extension component. Where there are DTCC data elements not included in the ISO message structure, the element is placed in the structured extension at the appropriate level. For repetitive levels such as option or payout, it is possible to identify to which instance of the data the extended element belongs. All Mandatory and Mandatory with Option events will require a default option to be present to indicate which option will be given to the holder in absence of an election. True voluntary events (i.e. Tender Offer) will include an option zero (0). Option zero will be published as 999 in the ISO message. The 0 option will either represent the option to abstain or to take no action. These options are generated to represent the opportunity for the security holder to perform no action with regards to this event and assist clients with internal processing. Events that are considered mandatory or mandatory with options will not include this 0 option. Where possible, each option will be named based upon ISO definitions. However, DTCC has also included a provision for several non-compliant option types, such as Foreign Currency Payments. DTCC has defined those special option types in the extension schema. When such an option is offered, it will be noted the options outturn in in the core message (SECU for reinvestment, CASH for currency payment) and the ExtendedOptionFeaturecode will be provided in the extension component. The Message Usage Guideline, a message specification document, reflects these definitions in detail. Getting Started With Corporate Actions ISO Announcements Messaging 24

25 The following table provides a summary of the ISO message representation of DTC specific option types. New Model Option Type Option Description ISO Option Type (Extended) DTCC OptionFeature Abstain Buy Cash and Securities Holder elects to abstain from voting on the proposal. Holder elects to purchase additional securities. Holder will receive a combination of cash and securities. ABST BUYA CASE Cash Holder will receive cash. CASH Consent and Exchange Consent Denied Consent Granted Consent and Tender Holder submits securities for exchange in addition to voting to approve the proposal. Holder elects not to approve the proposal. Holder elects to approve the proposal. Holder submits securities for tender in addition to voting to approve the proposal. CEXC CONN CONY CTEN Exercise Subscribe Lapse Holder elects to exercise the intermediate security or warrant. Holder elects to exercise their right to subscribe to additional securities based upon the existing position. Holder does not take any action and allows the rights associated to the security to become null and void. Holder may also elect to allow the security to lapse. EXER EXER LAPS Getting Started With Corporate Actions ISO Announcements Messaging 25

26 Retain Holder elects to keep/retain their existing security rather than receive a new security. MPUT No Action Holder elects not to take part in the event. NOAC Convert Holder elects to convert security into a new security, cash or a combination of cash and securities. PRUN DRIP Holder elects to receive additional securities instead of the cash distribution. Option may be declared by the issuer or as a service offered by DTC. SECU Other Applies when a specific Option code cannot be used. OTHR Foreign Tax Unfavorable DTC Only Option. The event and Security are eligible for the Foreign Tax Relief service at DTC. Option to select unfavorable tax rate. The Foreign Tax Unfavorable option is the default option. CASH FORU Foreign Tax Favorable DTC Only Option. The event and Security are eligible for the Foreign Tax Relief service at DTC. Participant receives their payment at a favorable tax withholding rate. CASH FORF Foreign Tax Exempt DTC Only Option. The event and Security are eligible for the Foreign Tax Relief service at DTC. Participant is exempt from any tax withholding. CASH FORX DRIP Unfavorable DTC Only Option. The event and Security are eligible for both the Dividend Reinvestment and Foreign Tax Services at DTCC. Participants will receive SECU DRPU Getting Started With Corporate Actions ISO Announcements Messaging 26

27 additional shares and the Tax Withholding on those shares will be at the unfavorable tax rate. DRIP Favorable DTC Only Option. The event and Security are eligible for both the Dividend Reinvestment and Foreign Tax Relief Services at DTCC. Participants will receive additional shares and the tax withholding on those shares will be at the favorable tax rate. SECU DRPF DRIP Exempt DTC Only Option. The event and Security are eligible for both the Dividend Reinvestment and the Foreign Tax Relief service at DTCC. Participants will receive additional shares and will be exempt from any tax withholding. SECU DRPX Foreign Currency Payment DTC Only Option The event and Security are eligible for Foreign Currency Payment Service at DTCC. Participants will receive their distribution in the Foreign Currency instructed. CASH FCPP Foreign Currency Payment Unfavorable DTC Only Option. The event and Security are eligible for both the Foreign Currency and Foreign Tax Services at DTCC. Participants will receive their distribution in a foreign currency and the tax withholding on that distribution will be subject to unfavorable tax withholding. CASH FCPU Getting Started With Corporate Actions ISO Announcements Messaging 27

28 Foreign Currency Payment Favorable DTC Only Option. The event and Security are eligible for both the Foreign Currency and Foreign Tax Services at DTCC. Participants will receive their distribution in a Foreign Currency and the Tax Withholding on that distribution will be subject to favorable tax withholding. CASH FCPF Foreign Currency Payment Exempt Tax Credit Subscribe and Oversubscribe DTC Only Option. The event and Security are eligible for both the Foreign Currency and Foreign Tax Services at DTCC. Participants will receive their distribution in a foreign currency and will be exempt from any tax withholding. DTC only option. Notification of a tax credit. Holder elects to subscribe to more securities than underlying securities position allows. CASH OTHR OVER Securities Holder will receive securities. SECU Sell Holder elects to sell their security. SLLE FCPX Payout level carries similar principles and logic to CashMovementDetails or SecurityMovementDetails (repetitive components in the CorporateActionOptionDetails building block). However, there is a key difference the DTCC data model factored out rate types from the rate itself (consideration for flexibility). Payouts contain information fields such as generic rate or price that is qualified by the payout type. ISO movement sections generally have separate rate fields within one Cash / Security / MovementDetails component. To Getting Started With Corporate Actions ISO Announcements Messaging 28

29 maintain the straightforward relationship every Payout will be allocated Cash / Security / MovementDetails in the ISO message. The following additional DTCC levels (not including Event, Option, Payout explained above) are accommodated within the ISO message as follows: Getting Started With Corporate Actions ISO Announcements Messaging 29

30 Key Concepts DTCC Level Details ISO Fields Comment Event Text Contains additional information related to the event in text form, where there may be none, one or many occurrences of Event Text, distinguished by Text Type, and one Text Type per event. Data from the event text level will populate ISO fields in AdditionalInformation message components. This level is optional and repetitive. Agent Information that applies to details of the agent related to the event, where there may be none, one or many agents, distinguished by Agent Type, and only one occurrence of an Agent Type per event. ISO message has separate message building blocks for each agent. Data elements from the Agent level will populate ISO fields in appropriate agent block based on the following rules: This level is optional and repetitive. Non-ISO elements or Non-ISO agent types are extended. Position Length Agent details are factored into one level and qualified by the Agent Type element. Event Agent Event Agent (Bearer) Issuer Agent Physical Securities Agent Drop Agent Information Agent Solicitation Agent Remarketing Agent Transfer Agent Drop Agent (Bearer) Others Drop Agent Information Agent Solicitation Agent Reselling Agent Paying Agent Extended Extended Related Events Contains reference to the related events, where there may be none, one, or many Related Events per event. Data elements from the Related Events level populate ISO fields in EventsLinkage message building block. This level is optional and repetitive. Non-ISO elements are extended. Getting Started With Corporate Actions ISO Announcements Messaging 30

31 Key Concepts DTCC Level Details ISO Fields Comment Lottery Contains details about the lottery (e.g., total called quantity, type of the lottery, etc.) when applicable, there can be none or one Lottery record per event. Data elements from the lottery level populate ISO fields in the CorporateActionDetails message building block. This level is optional and non-repetitive in the message. The DTC Browser will provide all lotteries. Message will contain details of the most recent one. Non-ISO elements are extended. Certificate Contains details about the called certificates in corporate action events where the issuer chose to redeem part of the outstanding issue which may include specific certificate numbers. This level is optional and repetitive. This level is extended. ISO Message Delivery and Network Protocols The transformation project introduces the new ISO messaging alongside a browser-based Graphical User Interface (GUI). Message subscriptions are available to allow clients to control the flow of data. SMART Messages are transported using one of the two networks, with the following protocols: SMART (DTCC Proprietary Network) o MQ (Real time single threaded messages) o NDM (File based protocol which runs in 16 batches throughout the day) o FTP (File based protocol which runs in 16 batches throughout the day) SWIFT o InterAct Store and Forward (Real time single threaded messages) o FileAct (File based protocol which runs in 16 batches throughout the day) Customers considering using the SMART network should contact their DTCC Relationship Manager to determine if they have a SMART circuit currently in place. If so, DTCC will perform bandwidth utilization studies on the current lines to determine if an upgrade to a larger circuit is necessary. There is no cost for transmitting messages via SMART, but customers do have to pay for the circuit Getting Started With Corporate Actions ISO Announcements Messaging 31

32 Key Concepts SWIFT itself. Pricing which is a direct pass-through from the telephone company servicing the line is fixed based on circuit size. Customers considering the SWIFT network should contact their SWIFT Relationship Manager for provisioning and pricing details. These communication methods allow DTCC clients to benefit from: Increased availability and timeliness for corporate actions data: Customers benefit from the enhanced processing engine that allows for CA messages to be updated and published throughout the day. Updates are applied to existing events at intervals, for dissemination. Subscriptions: Subscription options exist for three main event groups: Distributions, Reorganizations and Redemptions. Within each event group, clients are able to choose to receive messages intra-day or end of day using various message protocols, depending on the criticality of the event. Additional information can be found immediately below. Subscription Options DTCC provides a subscription model to allow clients to choose how they receive their messages. Subscriptions allow clients to choose: Event groups such as Distributions, Redemptions, Reorganizations, and several others The timing and frequency of announcements; To receive events based on final or non-final (Incomplete) workflow statuses. The project introduces frequent intra-day announcements of corporate actions data. Customers are able to set subscription options to select the receipt of data from DTCC in a variety of methods, including timing and content. For example, DTCC allows the customer to choose how frequently data is received based on their needs. In the event a customer chooses to receive data less frequently throughout the day, unread event messages will remain queued for each customer until the next time the customer extracts the data. In addition to the frequent availability of new messages, subscription options allow customers to configure the data in a variety of ways. The ability to customize the receipt of data allows all participants to optimize the service to suit their specific business needs. Dividend Distribution, Redemption, Maturity (Cash) and Reorganization event group data is updated and available through the DTCC ISO messaging hub throughout each business day. Historically, Participants have accessed CA event information using the DTCC Computer-to- Computer Facility (CCF) file transmissions once at the end of the business day (or in the case of certain situations, in hourly slices throughout the day). With the new messaging, clients can receive Getting Started With Corporate Actions ISO Announcements Messaging 32

33 Key Concepts messages in real time, however, ISO allows events to be made available in an on-demand schedule that suits each customer. Customers who wish to continue with the current Proprietary Files will still have the option to do so beyond their sunset date, for a fee. Participants are able to select, for each category of events, whether to receive notifications intraday or at the end of the day. The following table illustrates the subscription options available for the different types of corporate action announcement: CA Type Real Time Option - MQ Timing Options* - File Distribution Redemption All announcements available in real time All announcements available in real time All announcements available intraday, at 1:30, 3:30, 6:00, 9:00, 11:00, 12:00, 13:00, 14:00, 15:00, 16:00, 17:00, 18:00, 19:00, 20:00, 21:00, 23:30 All announcements available intraday, at 1:30, 3:30, 6:00, 9:00, 11:00, 12:00, 13:00, 14:00, 15:00, 16:00, 17:00, 18:00, 19:00, 20:00, 21:00, 23:30 Reorganization All announcements available in real time *Timing Options a client may take one, all or any combination of times listed All announcements available intraday, at 1:30, 3:30, 6:00, 9:00, 11:00, 12:00, 13:00, 14:00, 15:00, 16:00, 17:00, 18:00, 19:00, 20:00, 21:00, 23:30 The following table illustrates the subscription options available for the different types of corporate action lifecycle messages: Message Type CANO-E: CA Notification with Eligible Balance (Record Date Entitlements) Availability Via MQ and via File Daily, 2 p.m. ET* (P&I) -and/or- Daily 11:30 p.m. ET (P&I, MMI) *2 p.m. ET CANO-E for P&I is ONLY for late announcements created before 1:45 p.m. on payable date Getting Started With Corporate Actions ISO Announcements Messaging 33