November 30, 2001

TO: Dan Kuhnel (ANNA Service Bureau)
CC: ISIN User Group
FR: Michael Atkin (FISD)
RE: ASB Specifications Post GIAM 2
DA: November 20, 2001

The issues associated with enhancements to the ASB feed were on the agenda of the June ISIN user group meeting in London (focus was unique security identification) and again for the September meeting in NYC (disrupted by September 11 events). The following is our synthesis of these issues with apologies if you've seen some of this before.

It is important to reiterate that the goal of supporting the ASB is to help the industry meet the automation requirements of T+1 and STP. As such, all financial instruments, whether tradable or not, should have a standard identifier and all numbering agencies need to understand and adhere to the ISO 6166 standard.

As the common link for automated trading/execution systems, ISIN must be available prior to the date of security issuance and contain all relevant information essential to precisely and uniquely identify the instrument throughout its life span. We view unique instrument identification as the core rationale behind the creation of the ASB.

There are a number of mandatory minimum data elements that are very critical to instrument identification. The core principle is that if the data elements are needed for unique identification, they should be available (regardless of source) as part of the core ASB product. If any of them are not disseminated by the original source, the ASB should aggressively pursue getting them from the NNA's.

There are also a number of indicative data elements (that are not part of GIAM or CFI) that are considered as critical for instrument identification including:

• Official place of listing (needed for instances of multiple listings)
• Register identifier (needed for security routing)
• Restrictions (i.e. Regulation 144A, S, D, 3C7)
• Strike/exercise prices (for warrants and options)
• Mandatory separation price
• Dated date
• Clearing agent

Finally, our members believe that Classification of Financial Instrument (CFI) information is needed to set up security master files. We strongly encourage the ASB to work toward enforcing the standard and hold the NNA's accountable for correctly assigning CFI codes.

The market data industry has indicated its interest in having ISIN assigned to options, futures, private placements and limited partnerships (particularly their underlying companies). Preliminary discussions indicate that some of these instruments, i.e. futures, options, commercial paper and other derivatives, particularly those that are traded under exchange symbology, pose special problems. Further study is required to address this issue. FISD members would like to open the dialogue on whether ISO 6166 is the solution to this problem.

The issues outlined below represent some of the initial rationale behind the creation of the ANNA Service Bureau. FISD members want to reinforce accomplishment of the following objectives as essential. We think it useful to devote part of the December 11 meeting to gauge where we are and what still remains as a targeted objective for the ASB.

Timing Gaps
Timely electronic access to ISIN (in a standard format) prior to trading availability is essential for ISIN to be functional in a STP environment. Adherence to the ISO standards and ANNA Guidelines are mandatory. There are concerns about the timing gaps between primary identifier, corporate actions and other information contained within security master files.

• Immediate goal is access to the data in electronic batch form on a daily download and available for query in real time. FISD members would like to aim toward intra-day batch files for STP.
• Referential integrity is (i.e. the ability to determine additional and changes) is critical.
• FISD members would like to see ISIN data available within one hour of receipt from the NNA.

Manual Assignment
What effect will the ASB have on reducing or eliminating manual assignment processes and helping NNA's manage the backlog when a new issue comes to market? We want to reinforce the point that ISIN data is needed prior to issuance of the financial offering and no later than the date of initial trading.

Non-Assignment
What effect will the ASB have on the assignment of ISIN when the instrument doesn't meet the criteria of the NNA? The goal is for the ASB to ensure that all NNA's allocate ISIN per the ISO standard. Allocation should not be optional. Non-assignment can result in delays and assignment of "dummy ISIN's" and inhibit the use of ISIN as a functional standard. The minimal requirement for circumstances where the NNA is unable to assign a number is for a notification mechanism including an indication of remedial action.

Multiple Assignment
What effect will the ASB have for situations where the underwriter approaches more than one numbering agency for an ISIN? The minimal requirement is for the establishment of a real-time communication mechanism for notification of multiple assignment fixes as well as the creation of links between the numbers.

Substitute Numbers
What effect will the ASB have on assignment and dissemination of substitute ISIN numbers? The minimal requirement is for substitute numbering data to be made available via the ASB feed upon issuance.

Corporate Actions
What effect will the ASB have on reducing the time gap between a corporate action announcement and the assignment of the new ISIN? We strongly encourage NNA's to adopt uniform rules that minimize the requirements for the issuance of new ISIN's unless absolutely necessary based on legal changes in the instrument (as opposed to simple changes in descriptive information).