ALD Parallel Testing Group Call - DOC

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					Agency Lending Disclosure Taskforce



       ALD Testing Working Group Meeting Summary: Notes
                   (July 2006 - September 2006)

Table of Contents

Testing Working Group Meeting Summary, Tuesday, July 11, 2006 ................................ 2
Testing Working Group Meeting Summary, Tuesday, July 18, 2006 ................................ 7
Testing Working Group Meeting Summary, Tuesday, July 25, 2006 .............................. 11
Testing Working Group Meeting Summary, Tuesday, August 1, 2006 ........................... 15
Testing Working Group Meeting Summary, Tuesday, August 8, 2006 ........................... 19
Testing Working Group Meeting Summary, Tuesday, August 15, 2006 ......................... 22
Testing Working Group Meeting Summary, Tuesday, August 22, 2006 ......................... 26
Testing Working Group Meeting Summary, Tuesday, August 29, 2006 ......................... 30
Testing Working Group Meeting Summary, Tuesday, September 5, 2006...................... 34
Testing Working Group Meeting Summary, Tuesday, September 12, 2006.................... 37
Testing Working Group Meeting Summary, Tuesday, September 19, 2006.................... 41
Testing Working Group Meeting Summary, Tuesday, September 26, 2006.................... 44




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Agency Lending Disclosure Taskforce




Testing Working Group Meeting Summary, Tuesday, July 11, 2006

Participants:

    1.    Mariana Kind, Capco                      42.   Patricia Daly, Ixos Capital Markets
    2.    Josh Neto, Abbey National                43.   Michael Boquiren, JP Morgan
    3.    Jeff Juhasz, Abbey National              44.   Mary Alavarces, JP Morgan
    4.    Ross Levin, ABN Amro                     45.   Steve Cutler, JP Morgan
    5.    Bernie Yannotti, ABN Amro                46.   Joshua Santana, JP Morgan
    6.    Anisa Butash, AIG                        47.   Frank Pedreira, JP Morgan
    7.    Ms. Bisio, Bank of Tokyo Mitsubishi      48.   Amy Kwong, JP Morgan Chase
    8.    Doug Phythian, Barclay's Global          49.   Donna Jacobs, Key Bank
    9.    Charles DiVuolo, Bear Stearns            50.   Charis Yang, Lehman Bros.
    10.   Zakhar Suleymanov, Bear Stearns          51.   Kristina Savicic, M&I Bank
    11.   Joanna Martinez, Bear Stearns            52.   Brian Joy, Mellon Bank
    12.   Jim Hoover, Boston Global Advisors       53.   Mira Pardanani, Merril Lynch
    13.   Linda Leary, Brown Brothers Harriman     54.   Dave Alavarces, Merril Lynch
    14.   Daniel Jarrett, Calyon Securities        55.   Mike Tucci, Metropolitan West
    15.   John Surgent, Capco                      56.   Steve Kenney, MNI Bank
    16.   Sherri Evans, CIBC                       57.   Mary Jo Graffeo, Morgan Stanley
    17.   Victor Lopez, CIBC                       58.   Sanjay Patankar, National Financial
    18.   Erica Granger, Citadel Investment Grp.   59.   Judy Berschadsky, Nomura Securities
    19.   Ann Klein, Citigroup                     60.   Elaine Stankiewicz, Northern Trust
    20.   Abbas Gilani, Credit Suisse              61.   Amy Werkheiser, Pershing, LLC
    21.   Desi Aldenese, Credit Suisse             62.   Larry Ogles, PFPC
    22.   Constantine Khodik, CSFB                 63.   Summer Hinton, Paloma Securities
    23.   Donald Copans, Deutsche Bank             64.   Steve Bartollo, Raymond James
    24.   Nancy Byrne, Deutsche Bank               65.   Michael Searle, RBC Capital Markets
    25.   Nick Waterson, Dresdner, Kleinwort,      66.   Jane Paladino, RBC Capital Mkts.
          Wasserstein                              67.   Mr. Jayme Lebowsky, RBC Dain
    26.   Margaret Koontz, DTCC                          Rauscher
    27.   Greg McConnell, Equilend                 68.   Bill Cole, RBS Greenwich Capital
    28.   Dave Perlzweig, FCC                      69.   Alexander Brook, SG
    29.   Calvin Inge, First Clearing              70.   John Panchery, SIA
    30.   Joe Bruno, Fortis                        71.   Brian McLoone, State Street
    31.   John Tew, Frost Bank                     72.   Jeff Mailman, State Street
    32.   Michael Doyle, Goldman Sachs             73.   Keith Yokoyama, Sumitomo Trust
    33.   Susan Kuller, Goldman Sachs              74.   Scott Wellington, Sungard
    34.   Alden McClelland, Goldman Sachs          75.   Mr. Emeka Agwu, Timber Hill
    35.   Peter Lasaga, Goldman Sachs              76.   Colleen McElwee, Vanguard
    36.   C/Les Nelson, Goldman Sachs              77.   Patty Rice, Wachovia
    37.   Jeff Chen, Goldman Sachs                 78.   Theresa Shorter, Wachovia
    38.   Ray Porzio, HSBC                         79.   Alan Maxwell, Wachovia
    39.   Pat Festino, ING                         80.   Morgan Ramsey, Wachovia Capital
    40.   Roman Bril, ING Financial                      Markets
    41.   Tim Hulme, Investors Bank & Trust        81.   Troy Visnovec, Wells Fargo




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Agency Lending Disclosure Taskforce


    1. SIA conference announcement

       The group was reminded to register for the SIA ALD conference on Thursday, July
        20th
       When the registration list has been set, Capco will distribute it to all the attendees to
        give them an opportunity to identify counterparties they should meet at the conference

    2. Phase I re-qualification update

       Based on the latest survey there are still many open confidentiality agreements.
       Firms should continue to pursue and execute all remaining open agreements.
       Unexecuted confidentiality agreements will prevent firms from completing any
        necessary testing. This issue was compared directly to what was discovered with the
        parallel testing
       Nick Watterson from Dresdner Kleinwort Wasserstein brought stated that he is having
        issues with certain agent lenders that they are not providing company financial
        information
       Agent lenders are reminded that pension funds should be sent with their correct name
        and tax ID, if the tax ID is not available or the same as the corporation’s tax ID, a
        pseudo tax ID should be requested from DTCC. Many incorrect names and tax IDs are
        causing delays and confusion in the re-qualification process; broker-dealers cannot
        complete their credit reviews when there is an incorrect name

    3. Survey results

       Results from the 6th agent lender and the 7th borrower surveys are being calculated
        and will be communicated to Les Nelson and regulators shortly.
       When the results are finalized they will be added to the ALD website and mentioned
        during the next call
       Overall responses show continued progress

    4. Phase II testing

       Capco continues to provide readiness and contact information for firms in order to
        prepare them for testing
       Lenders are reminded that when sending files to their counterparties they should
        follow up with a phone call or an email and get a status check on whether the files
        were received and whether there are any errors or issues with the file
       Broker-dealers should be following up with their lenders giving an indication of what
        type of testing they are looking to validate and to what level they intend to complete.
        State Street stated that they have sent many files and has not received any feedback
        from their counterparties



    5. Vendor update


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Agency Lending Disclosure Taskforce




    SunGard:
     SunGard is still taking in files for processing regular testing continues
     They will be turning on components of the reconciliation processing. This
       functionality will allow users to be able to retrieve the reconciliation report
     SunGard is now looking at various formatting issues that have come about when
       receiving files and performing validations. These issues are being addressed by
       SunGard, and will provide feedback to those lenders and borrowers.
     Files containing a dummy asset id that do not make the SunGard requirements will
       still be passed on
     When there are incomplete principal records, broker-dealers will still receive the data
       and the reconciliation report will only reflect the good data. If there are allocation
       breaks there will be a notification in the reconciliation report. More often SunGard
       will make notifications in the reconciliation report.
     Several of these issues revolve around numeric values and the way they have been
       coded. Some of these numeric issues mentioned are:
                       1. Type 2 Records
                       2. Sending Firm Id
                       3. Borrower Settlement Location

       These issues have been discovered during the first day of parallel testing and are being
        addressed by the vendors, lenders and borrowers in Group A.

    EquiLend:
     Equilend is also addressing validation issues and making changes accordingly
     Equilend will be submitting a file submission tracking enhancements overnight and
       will be adding another tool soon.
     If the vendors make any changes they will be communicated to the testing group.


    6. Parallel testing update

       The group was updated on the progress of the first day of testing. During this first
        date, numerous issues were discovered both on the agent lenders’ side as well as on
        the borrowers’ side. These have resulted in extending the first business day processing
        time until July 19th.
       The entire group was reminded about the importance of the prerequisites that the
        parallel testing group has set for parallel testing and that all firms should review and
        continue to test for communication before they become involved in parallel testing

       Several issues came to light for vendors, lenders and borrowers. These new issues are
        related to numeric field formatting differences, optional field interpretations and asset
        ID discrepancies. Capco has created an issue log and will maintain this going forward.
        This will be updated daily and will track the status of all issues.




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Agency Lending Disclosure Taskforce


       There is also the “Borrower Settlement Location” issue that Citigroup (BD) is
        experiencing. For Citigroup this field is critical as there are two stock records and this
        field needs to be populated in order to distinguish between these stock records. This is
        an optional field and most lenders have not coded for it. Some agent lenders will be
        able to provide this field though. This needs to be followed up and SunGard will
        confirm if this will be an issue for them when they are passing files through.

       A brief discussion took place regarding the first day delay and the pushing back of the
        parallel testing. The group was informed that the day one processing of June 29th test
        files will continue to July 19th. This will give all firms the opportunity to address and
        correct any bugs that have come about within the first few days of the parallel test.

       Depending on how the Group A parallel test progresses the Group B test schedule may
        have to be amended.

       When lenders resolve their breaks they should resend their June 29th test files to their
        parallel counterparties and all should continue on validating and completing the first
        day of the test cycle.

    7. Open questions:

    Sending a Non-cash collateral file even when there is no non-cash trades on a given day:
     As it was agreed a long time ago that no files will be sent when there is no open trade,
       the same rules is applied to the non-cash file. For most agent lender, the generation of
       the non-cash file is based on the existence of non-cash trades, therefore it will be
       nearly impossible to send a blank non-cash file, and this would involve a major system
       change and is not a workable solution. The decision is to continue with the current
       practice of not sending a non-cash file when there are no non-cash trades.

       Regarding the tri-party collateral, there are several agent lenders who will be sending a
        percentage instead of a dollar value. Goldman Sachs expressed that they would prefer
        to have this amount received as a dollar value. State Street has communicated that they
        will send this as a dollar value while, Northern Trust, Frost Bank and JP Morgan
        Chase will send the collateral amount as a percentage.

       The subject of record retention was brought up by ING group and there is some
        concern on how broker-dealers will store the daily loan files and especially the raw
        data in these files since they are using optical storage media. Using this medium makes
        it nearly impossible to then retrieve the raw ALD files in a readable form. ABN Amro
        added that they have not been able to put the data on an optical storage system. Since
        these files are treated as books and records, they will have to be stored on some type of
        a non-erasable media system and be easily readable. Morgan Stanley stated that they
        will manage this in two levels. They would save the raw data of the daily file as it
        comes in “as is”. Secondly, they would save the same file after the data has been
        massaged for regulatory reasons. Both methods would be saved and stored in a report
        form. This issue will be discussed further on the next call.


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Agency Lending Disclosure Taskforce




             The next Testing call will take place on Tuesday, July 18 at 10 am ET




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Agency Lending Disclosure Taskforce




Testing Working Group Meeting Summary, Tuesday, July 18, 2006

Participants:
     82. Blair Wolke, Abbey                          131. Jenhau Chen, Goldman Sachs
     83. Josh Neto, Abbey National                   132. Les Nelson, Goldman Sachs
     84. John Reswow, Abbey National                 133. Becky Frayer, HBK Global
     85. Jeff Juhasz, Abbey National                 134. Ray Porzio, HSBC
     86. Rob Racaniello, ABN AMRO                    135. Tim Hulme, IBT
     87. Anisa Butash, AIG                           136. William Tan, IBT
     88. Jim Ray, Bank of America                    137. Jason Ronji, ING
     89. Maria Cadorniga, Bank of Tokyo Mitsubishi   138. Roman Bril, ING FM
     90. Doug Phythian, Barclays                     139. Patricia Daley, IXIS Capital Markets
     91. Sandra Balack, Barclays                     140. Frank Pudrera, JP Morgan
     92. Patricia Walsh, Barclay's Capital           141. Annette Bickel, JP Morgan
     93. Charlie Ramos, BBH                          142. Meagan Conaty, JP Morgan
     94. Pearce Mcdowell, BBH                        143. Mary Louise Alavarces, JP Morgan
     95. Zakhar Suleymanov, Bear Stearns             144. Joshua Santana, JP Morgan
     96. Joanna Martinez, Bear Stearns               145. Bruce Elliott, JP Morgan Chase
     97. Jim Pascoloni, BGA                          146. Harriet Uhlir, Key Bank
     98. Jim Hoover, BGA                             147. Charis Yang, Lehman Brothers
     99. Frank Bursero, BMP Paribas                  148. Steve Kenny, M&I Bank
     100. Mary Hynan, BNP                            149. Kristina Savicic, M&I Bank
     101. Fred Shier, BNP Paribas                    150. Brian Joy, Mellon
     102. Lori Zekanoski, BNP Paribas                151. Mira Tardanani, Merrill Lynch
     103. Linda Leary, Brown Brothers Harriman       152. Gil Esquivel, Merrill Lynch
     104. Bruce Glazer, Calyon Securities            153. Elias Spian, Met West
     105. Mariana Kind, Capco                        154. Mike Tucci, Metropolitan West
     106. John Surgent, Capco                        155. Mary Jo Graffeo, Morgan Stanley
     107. Tom Wagner, Capco                          156. Sanjay Patankar, National Financial Services
     108. Sherry Evans, CIBC                         157. Bob Moserowitz, Nomura
     109. Steven Bies, CIBC                          158. Elaine Stankiewicz, Northern Trust
     110. Victor Lopez, CIBC                         159. Amy Werkheiser, Pershing, LLC
     111. Erica Granger, Citadel Investment Group    160. Poonam Gupta, Prudential
     112. Eric Levine, Citigroup                     161. Barbara Masut, Raymond James
     113. John Giardina, Citigroup                   162. Steve Bartalo, Raymond James
     114. Ann Klein, Citigroup                       163. Jamie Lebowsky, RBC Dain Rausscher
     115. Jane Woo, Citigroup                        164. Alexander Brook, SG
     116. Jim Bretado, Countrywide Securities        165. Jeff Melman, State Street
     117. Constantine Khodik, Credit Suisse          166. Kelly Ediz, State Street
     118. Desi Aldenese, Credit Suisse               167. Nancy Baly, Sumitomo Trust
     119. Abbas Gilani, Credit Suisse                168. Steve Yokoyama, Sumitomo Trust
     120. Ralph Mattone, Deutsche Bank               169. Scott Wellington, Sungard
     121. Nick Waterson, Dresdner Kleinwort          170. Emeka Agwu, Timber Hill LLC
     122. Greg McConnell, Equilend                   171. Timothy Maloy, UBS
     123. Dave Perlzweig, FCC                        172. Ken Delecki, US Bank
     124. Art Carr, Fimat                            173. Chuck Bailey, Wachovia
     125. Marvin Inge, First Clearing                174. Patty Rice, Wachovia
     126. Joe Bruno, Fortis                          175. Laurissa Ahlstrand, Wells Fargo
     127. John Tew, Frost Bank
     128. Alden McLellan, Goldman Sachs
     129. Michael Doyle, Goldman Sachs
     130. Peter Lasaga, Goldman Sachs


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Agency Lending Disclosure Taskforce




Summary:

    1. SIA conference announcement

       The group was reminded about the SIA ALD conference on Thursday, July 20th
       The conference is nearing capacity with over 200 participants already registered

    2. Technical Specification / Daily File update

       The “Borrower Settlement Location” field definition is being updated in the Daily
        Files Technical Specification and the Daily Loan Data Detail File documents
       The updated documents will be posted on the ALD website once we receive
        feedback on clarity of the change
       All participants should review the change once it is posted to the website
       Firms are encouraged to review the industry specification on the website and not
        rely solely on vendor produced documents

    8. Phase II testing

       Capco continues to provide readiness and contact information for firms in order to
        prepare them for testing
       The following broker-dealer testing statistics were presented:
           o 43 – currently testing
           o 6 – anticipate testing to begin by end of July
           o 7 – have not responded to queries for status information
       The following agent lender testing statistics were presented
           o 21 – currently testing
           o 3 – anticipate testing to begin by end of July
           o 3 – anticipate testing to begin in August
           o 4 – have not responded to queries for status information

    9. Vendor update

    EquiLend:
     EquiLend continues to support parallel and phase II testing
     Test enhancements to their file submission and tracking tool continues
     The file submission and tracking tool enhancements will be pushed to production
       on Saturday and will allow resending files
     Changes to the protocol document have been made based on parallel test findings
       and are being reviewed internally before publishing for EquiLend clients

    SunGard:
     Two issues were identified in parallel testing and are being addressed:
          o Quick code validation correction scheduled for Friday, 7/21


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Agency Lending Disclosure Taskforce


            o CUSIP validation correction scheduled for Monday, 7/24
       Loanet broker-dealer clients that want to test outside of the parallel test should
        contact the application support group when they are ready to begin phase II
        testing so that SunGard can add their tax ID to the necessary test scripts
       Non-Loanet users can send files outside of the parallel test without any
        notification to SunGard, however it is recommended that they always notify both
        the vendor and receiver of files for better tracking
       Files submitted after 6 PM will be processed after 7 AM the following day
       Files should not be submitted during the one hour between 6 PM and 7 PM

    10. Parallel testing update

       Issues continue to be identified and resolved
       Some broker - dealers are performing the reconciliation to lenders’ files
       Unresolved issues continue to prevent others from successfully participating
       Capco is maintaining a central issues log of parallel testing issues and other issues
        identified by firms outside of the parallel test
       Notes from the parallel testing group daily calls are posted on the Capco website
       Firms are beginning to consider being part of the Group B parallel test that is
        scheduled to begin on August 7
       All firms participating in the Group B parallel test must archive production data
        from July 27 through August 1
       Notify Tom Wagner or Mariana Kind at Capco if you are planning to participate
        in the Group B testing
       Firms participating in the Group A parallel are also welcome to participate in the
        Group B parallel
       MetWest will not be able to participate in the parallel tests as they are not a DTC
        member. Broker-dealers should contact MetWest to initiate tests outside of the
        parallel

    11. Open questions:

       Disclosed versus non-disclosed loans
           o Disclosed loans are defined as those loans where the lending participants
               (beneficial owners) are disclosed to the borrower at the time of loan
               booking
           o Loans where participants are not disclosed during booking but are
               subsequently disclosed through periodic confirms or similar notification
               are NOT considered disclosed
           o Broker-dealers and agent lenders need to resolve differences in how loans
               are booked

       Triparty loan definition
            o Differences in the interpretation of triparty loans is causing a mismatch
               between some agent lenders and broker-dealers



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Agency Lending Disclosure Taskforce


             o Should triparty loans encompass only those loans and collateral executed
               under a triparty agreement or should this include all loans and collateral
               where the collateral is maintained by a 3rd party?

            Concerns over SunGard software
                o Questions were raised about the feasibility of firms going live on
                   October 1 if SunGard is not releasing their credit module until
                   September.
                o A current issue with the reconciliation is preventing from ABN
                   participating in the parallel test
                o The decision will be made on the parallel testing call if the test will be
                   delayed or roll to the next business day on July 19 as scheduled


            The next Testing call will take place on Tuesday, July 25 at 10 am ET




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Agency Lending Disclosure Taskforce




Testing Working Group Meeting Summary, Tuesday, July 25, 2006

Participants:
1.    John Reswow, Abbey National                55. Pete Lasaga, Goldman Sachs
2.    Josh Neto, Abbey National                  56. Jenhaun Chen, Goldman Sachs
3.    Anisa Butash, AIG                          57. Bill Cole, Greenwich Capital
4.    Rosalie Fadem, Bank of NY                  58. Becky Frayer, HBK Global
5.    Maria Cadorniga, Bank of Tokyo             59. Ray Porzio, HSBC
6.    Doug Phythian, Barclays                    60. Jason Rabinovich, ING
7.    Patricia Walsh, Barclays Capital           61. Jean Chin, ING
8.    Chandra Balack, Barclays Capital           62. Roman Bril, ING
9.    Charles Divuolo, Bear Stearns              63. William Tam, Investors Bank & Trust
10.   Zakhar Suleymanov, Bear Stearns            64. Colleen Kenney, Investors Bank & Trust
11.   Lynn Maki, BMO Capital Markets             65. Tim Hulme, Investors Bank & Trust
12.   Jeremy Kaber, BMO Capital Markets          66. Alexander Brook, ISG
13.   Kenneth Young, BNP Paribas                 67. Megan Conaty, JP Morgan
14.   Theresa Auw, BNP Paribas                   68. Annette Bickel, JP Morgan
15.   Lori Zekanoski, BNP Paribas                69. Mary Louise Alavarces, JP Morgan
16.   Mon Eng, BNP Paribas                       70. Christoph Jammet, JP Morgan
17.   Fred Scheirer, BNP Paribas                 71. Frank Pedreira, JP Morgan
18.   Jim Pasqueloni, Boston Global Advisors     72. Amy Kwong, JP Morgan
19.   Pierce McDowell, Brown Brothers Harriman   73. Bruce Elliott, JP Morgan Chase
20.   Paul Armstrong, Brown Brothers Harriman    74. Donna Jacobs, Key Bank
21.   Linda Leary, Brown Brothers Harriman       75. Kristina Savicic, M&I Bank
22.   Bruce Glaser, Callion Securities           76. Steve Kenny, M&I Bank
23.   Daniel Jarrett, Calyon Securities          77. Mira Pardanani, Merrill Lynch
24.   Mariana Kind, Capco                        78. Khalid Saifullah, Merrill Lynch
25.   John Surgent, Capco                        79. Andrew Hall, Merrill Lynch
26.   Thomas Wagner, Capco                       80. David Alavarces, Merrill Lynch
27.   Victor Lopez, CIBC                         81. Chris Daskalakis, Merrill Lynch
28.   Sharie Evans, CIBC                         82. Sunil Makhijani, Merrill Lynch
29.   Steven Bease, CIBC                         83. Bernie Galvin, Morgan Stanley
30.   Erica Granger, Citadel Investment          84. Ahmet Hatipoglu, National Financial
31.   Bill Mascaro, Citigroup                    85. Sanjay Patankar, National Financial Srvs
32.   Richard Davis, Citigroup                   86. Bob Mozerra, Nomura
33.   John Giardina, Citigroup                   87. Judy Breschadski, Nomura Securities
34.   Ann Klein, Citigroup                       88. Elaine Stankiewicz, Northern Trust
35.   Santish Munuswami, Citigroup               89. Amy Werkheiser, Pershing
36.   Steven Nagorniouk, Citigroup               90. Summer Hinton, Poloma Securities
37.   Desi Aldemese, Credit Suisse               91. Jane Paladino, RBC Capital Mkts.
38.   Abbas Gilani, Credit Suisse                92. Jamie Lebowski, RBC Dain Rauscher
39.   Tom O'Keefe, Credit Suisse                 93. James Glover, RBS Grenich Capital
40.   Mr. Suresh Katakam, Credit Suisse          94. Brian McCloone, State Street
41.   Constantine Khodic, Credit Suisse          95. Kelly Ediz, State Street
42.   Simon Donouzjian, Deutsche Bank            96. Nancy Daly, Sumitomo Trust
43.   Tom Magnavida, Deutsche Bank               97. Keith Yokoyama, Sumitomo Trust
44.   Nick Waterson, Dresnder                    98. Andre Setyon, SunGard
45.   Margaret Koontz, DTCC                      99. Scott Wellington, SunGuard
46.   Greg McConnell, EquiLend                   100. Mr. Ameki Agwu, Timber Hill, LLC
47.   Dave Perlzweig, First Clearing             101. James Nuemann, UBS
48.   Calvin Inch, First Clearing                102. Amy Marks, UBS Securities
49.   Tom Fan, First Clearing                    103. Patti Rice, Wachovia
50.   Joe Bruno, Fortis                          104. Theresa Shorter, Wachovia
51.   John Tew, Frost Bank                       105. Jack Jordan, Wachovia
52.   Les Nelson, Goldman Sachs                  106. Laurissa Alstred, Wells Fargo
53.   Susan Kuller, Goldman Sachs
54.   Mr. Alden McClelland, Goldman Sachs



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Agency Lending Disclosure Taskforce


Summary:

1. Announcements

   ALD Deadline – October 1
    The regulators want the initiative completed, but they don’t want the industry thrown
    in any chaos.
    Regulators will continue to monitor progress and decide if any extension will be
    granted.
    No date has been set as to when a deadline change decision would be made.
    Any possible extension would probably not exceed 1 month due to the concern over
    conflicting with year-end software freezes at participating firms.

   Testing interests from other lenders and borrowers are increasing and are reminded to
    utilize the ALD website.
   Resources AgencyLending.Capco.com website
    Participants are encouraged to check website for specifications, testing information
    and contacts.
   Read documents and contact task force with questions and comments.


2. Credit re-qualification survey

   The 7th agent lender and 8th borrower credit re-qualification surveys were distributed
    on July 24th.
   Participants are encouraged to respond ASAP to their respective survey.


3. Phase II testing

   The updated readiness chart is on the ALD website for all to view.
   Many firms have a NO status as they have not responded to the Capco inquiries.
    These firms are shown in yellow shading.
   Please review and contact Thomas Wagner at Capco with any update to your testing
    readiness status.
   Participants should contact their testing counterparties as defined on the website and
    coordinate tests.
   More firms are performing phase II testing.
   Firms do not need to participate in the formal parallel testing and should proceed with
    testing with individual counterparties.
   Lending agents participating in the parallel test can also test with borrowers outside
    of the parallel if their environment allows it.
   BMO Capital Markets reconciliation is functioning and is able to verify breaks but
    would like to get a response from other lenders that are not participating in Group A
    to test with. BMO is not getting any indications from their counterparties for regular
    testing and would like to begin testing now.


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Agency Lending Disclosure Taskforce


   Capco reached out to BMO lenders during the call to get an indication if they can
    schedule a test with BMO.
   State Street and Frost Bank will be able to send files now while BONY will be able to
    send next week and AIG in two weeks. Wells Fargo will not be able to send their files
    until August 14th.
   Borrower ready to test outside of the parallel should contact agent lenders and request
    files.

   EquiLend Update
          o The resend tool has been added to the staging and production
             environments
          o Volume is growing as more lenders are sending files.
          o Most file transmissions are successful.
          o More alerts and notifications have been added to the staging and
             production environments.

   SunGard Update
          o Customer service is receiving more calls to set up clients.
          o More borrower set-up is being completed.
          o Participants are encouraged to contact SunGard Customer Service to begin
             the set-up process so they are ready for testing.
          o Reconciliation reports may contain asset id violations because the security
             is not in the SunGard database. SunGard is researching possibly
             preloading the production database with security information to reduce
             these violations.
          o Non-Loanet users must remember to extract and send loans and collateral
             to SunGard for the date agreed with their agent lender counterparty.
          o SunGard is currently extracting the June 30th business date data for the
             parallel production test.


4. Parallel testing update

Group A testing
 The parallel test has switched to business day 2, June 30th as of Monday, July 24th.
 Test progress is being monitored on the daily 4:00 PM call.
 Most breaks are now content related and not being caused by processing bugs.
 Some rounding breaks have been identified and are being researched.
 An issue was raised that the SunGard reconciliation is expecting and exact match and
   has no allowable tolerance defined. SunGard has no plans to add a user defined
   “allowable difference” to the reconciliation process at this time.
 Three days have been allocated to complete the test for the June 30th business date.

Group B preparation and guidelines
 Significant interest has been demonstrated by lenders and borrowers.
 The business dates of July 27 through August 1 must be archived for the test.


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Agency Lending Disclosure Taskforce


   The Group B start date must be decided but will be either August 7th or 14th.
   Capco will develop the prerequisites for participation in the test and a proposed
    schedule of responsibilities.
   Capco will reach out to those firms that have expressed interest in joining Group B.
    An email will be sent out to these firms explaining conditions and prerequisites of
    joining this group. This will be sent out after the testing group call.

Other parallel testing
 Broker / dealers can test outside of the formal parallel test using production data, but
   only if the agent lenders are able to support the data creation.
 State Street has generated multiple consecutive days of production data for borrowers.
 CIBC is having penny differences on their reconciliation reports although their
   quantities are equal, this will be deferred to the parallel test call




                                                                                           14
Agency Lending Disclosure Taskforce




Testing Working Group Meeting Summary, Tuesday, August 1, 2006

Participants:
1.    Tom Fan, 1st Clearing                       53. William Tam, IBT Investor Bank & Trust
2.    Jeff Juhasz, Abbey                          54. Jason Rabinowicz, ING
3.    Josh Neto, Abbey National                   55. Roman Bril, ING Financial Markets
4.    John Reswow, Abbey National Securities      56. Tim Hulme, Investors Bank & Trust
5.    Jeff Heyn, ABN AMRO                         57. Patricia Daley, IXIS Capital Markets
6.    Anisa Butash, AIG                           58. Megan Conaty, JP Morgan
7.    Hiromi Otsuka, Banca IMI Securities         59. Robert Chao, JP Morgan
8.    Jim Ray, Bank of America                    60. Mary Louise Alavarces, JP Morgan
9.    Sharon Frammer, Bank of America             61. Christoph Jammet, JP Morgan
10.   Paula Best, Bank of Tokyo Mitsubishi        62. Bruce Elliott, JP Morgan Chase
11.   Ludmila Bisio, Bank of Tokyo                63. Annette Bickel, JP Morgan Securities
12.   John Curran, Bank of Tokyo Mitsubishi USJ   64. Donna Jacobs, Key Bank
13.   Patricia Walch, Barclays Capital            65. Charis Yang, Lehman Brother
14.   Doug Fithian, Barclays Global Investors     66. Steve Kenney, M&I Bank
15.   Charles DiVuolo, Bear Stearns               67. Christina Savicic, M&I Bank
16.   Mr. Ahar Sulima, Bear Stearns               68. Matthew Knoblock, Mellon Bank
17.   Johanna Martinez, Bear Stearns              69. Andrew Hall, Merrill Lynch
18.   Kenneth Young, BNP                          70. Meera Pardanani, Merrill Lynch
19.   Paul Armstrong, Brown Bros. Harriman        71. Chris Daskalakis, Merrill Lynch
20.   Linda Leary, Brown Bros. Harriman           72. David Alavarces, Merrill Lynch
21.   Pierce McDowell, Brown Brothers             73. Debbie Minors, Merrill Lynch
22.   Michael Mosseliano, Calyon Securities       74. Elias Spielman, MetLife
23.   Jonathan Morrill, Calyon                    75. Mike Tucci, Metropolitan West
24.   Mariana Kind, Capco                         76. Tim O'Hara, Mizhuo Securities
25.   John Surgent, Capco                         77. Ahmet Hatipoglu, National Financial
26.   Thomas Wagner, Capco                        78. Sanjay Patankr, National Financial Srvc
27.   Steven Bies, CIBC                           79. Bob Moserowitz, Nomura
28.   Sherry Evans, CIBC                          80. Mike Farrell, Nomura Securities
29.   Victor Lopez, CIBC                          81. Sandra Juanico , Nomura Securities
30.   Richard Davis, Citibank                     82. Amy Workheiser, Pershing
31.   Ann Klein, Citigroup                        83. Frank Onesti, PFPC
32.   John Giordina, Citigroup                    84. Joe Domizio, PFPC
33.   Andre Tutuian, Countrywide Securities       85. Poonam Gupta, Prudential
34.   Tom O'Keefe, Credit Suisse                  86. Steve Barlato, Raymond James
35.   Desi Aldenese, Credit Suisse                87. Barbara Masut, Raymond James
36.   Constantine Khodik, Credit Suisse           88. Jane Paladino, RBC Capital Markets
37.   Christy Schaffner, Credit Suisse            89. Michael Searle, RBC Capital Markets
38.   Mr. Abbas Gilani, CSFB                      90. Jaime Lebowski, RBC Dain Rauscher
39.   Donald Copans, Deutsche Bank                91. Bill Cole, RBS Greenwich Capital
40.   Tom Magnavita, Deutsche Bank                92. Alexander Bruk, SG
41.   Nick Waterson, Dresdner, Klein, Watt        93. John Panchery, SIA
42.   Margaret Koontz, DTCC                       94. Phillip Bolton, State Street
43.   Greg McConnell, Equilend                    95. Nancy Daly, Sumitomo Trust
44.   Mariana Kind, Capco                         96. Keith Yokoyama, Sumitomo Trust
45.   Joe Bruno, Fortis                           97. Brenda Fisher, Sungard
46.   John Tew, Frost Bank                        98. Scott Wellington, Sungard
47.   Susan Kuller, Goldman Sachs                 99. James Neumann, UBS
48.   Alden McClelland, Goldman Sachs             100. Amy Marks, UBS Securities
49.   Les Nelson, Goldman Sachs                   101. Colleen McElwee, Vanguard
50.   Peter Lasaga, Goldman Sachs                 102. Theresa Shorter, Wachovia
51.   Jeff Chen, Goldman Sachs                    103. Larissa Alstrand, Wells Fargo
52.   Becky Frayer, HBK Global




                                                                                            15
Agency Lending Disclosure Taskforce




Summary:

1. Announcements

   Let Capco know if you cannot locate testing counterparties. The number of firms
    ready to test is increasing. Reference the ALD website for counterparty readiness
    information.
   Work continues on the No Action letter, most changes are related to the 15c3-3 rule
    and collateralization under 100%. At this point, there is still no draft available for
    public distribution.

2. Phase II testing

   Testing volume continues to increase among firms.
   Participants should continue to contact their testing counterparties as defined on the
    website and coordinate tests.
   EquiLend Update
            o Testing traffic continues to increase.
            o All EquiLend clients are now participating in Phase II testing.
            o Some Phase I messages are being resent
            o Additional monitoring tools continue to be tested.

   SunGard Update
          o Data file traffic and borrower set-up significantly increased over the past
             week.
          o Participants continue to be encouraged to contact SunGard Customer
             Service to begin the set-up process so they are ready for testing.
          o The reconciliation process is being changed to start earlier to meet the
             increased volume.
          o Non-Loanet users must remember to extract and send loans and collateral
             to SunGard for the date agreed with their agent lender counterparty. If
             there are any questions regarding the layout of this file that is sent to the
             SSF hubs they should contact SunGard for it.
          o All files should be sent in after 8:00 PM for the current close of business.
             Any files sent in before 8:00PM will be processed against the prior close
             of business data.
          o More broker-dealers have been checking in for guidance in preparation of
             the Group B testing group.

4. Parallel testing update

Group A testing
 The parallel test has switched to business day 3, July 3rd.
 The test will move to day 4, July 4th on Wednesday night, August 2nd.
 The 5th business day, (July 5th file) has been removed from the test.


                                                                                             16
Agency Lending Disclosure Taskforce


   Group A parallel testing will conclude on August 7th.
   The daily 4:00 PM call continues to be used for monitoring progress
   Formatting and validation as greatly improved with most breaks being content
    related.
   One or two firms have been able to perform capital computations.

Group B preparation and guidelines
 The business dates of July 27 through August 1 must be archived for the test.
 The Group B start date is August 7th.
 25 broker/dealers and 11 agent lenders will be participating, but not all will be ready
   day 1 of the test.
 Participants and contacts have been published on the ALD website
 Firms should verify their counterparties for the test and insure that outstanding loans
   exist on the archived test dates.
 Participants should receive and process at least one set of files from each of their
   counterparties.
 A detailed plan is being developed and will be distributed during the week of 7/31

5. Other issues

   Agent lenders that are ready to send files in production are:
           o Metropolitan West will start sending on August 2
           o Key Bank will be ready August 21
           o EquiLend has the process ready in production
           o SunGard will be ready next week to create reconciliation reports in
              production
           o Borrowers have the option of processing or ignoring the production files.
              If receiving production files from these lenders present a problem for your
              firm, contact MetWest and Key Trust.
           o Lenders should note that broker/dealers participating in the parallel testing
              may not be able to review the production files.

   Actual versus projected tri-party collateral amounts
           o Lenders sending tri-party collateral amounts are using either a projected or
              actual collateral amount.
           o The definition of actual and projected was questioned.
           o Capco will coordinate drafting a written description of the terms and will
              distribute.

   Principals appearing multiple times in a single contract
           o Principals reflected in multiple allocations in a single contract are not
               being treated consistently by lenders.
           o A principal should only appear ONCE in a contract with the agent lender
               consolidating multiple allocations.
           o The specification will be changed to address these issues.



                                                                                        17
Agency Lending Disclosure Taskforce


   The difference between contract compare and the ALD reconciliation is due to
    failing security sales at MetWest sub-agents
            1. Custodian credits sale proceeds to principal on contractual settle date
               (CSD).
            2. A principal is removed from the loan if proceeds are credited but the
               borrower has not settled the recall.
            3. A “house” account (no tax ID and not approved by the borrower) is
               allocated in the contract on CSD in place of the actual principal.
            4. The loan is not included in the ALD files due to the invalid participant.

    o Other lenders on the call needed to verify if they follow the same process.
    o The discussion continued on whether the lender is taking a principal position in
      the loan and what would be the borrower recourse in case of default.
    o When the shares have not been delivered after settlement, the question on whether
      a loan is still considered open by the lender and who the counterparty is have
      were discussed, but there is no agreement; agent lenders will conduct further
      research.




                                                                                           18
Agency Lending Disclosure Taskforce




Testing Working Group Meeting Summary, Tuesday, August 8, 2006

Participants:
1.    Josh Neto, Abbey National                   52. Jason Rabinovich, ING,
2.    Ross Levin, ABN AMRO                        53. Rowan Bril, ING FM,
3.    Jeff Hein, ABN AMRO                         54. Tim Hulme, Investor Bank,
4.    Kevin Galvin, ABN AMRO                      55. William Tam, Investor Bank and Trust,
5.    Anisa Butash, AIG                           56. Patricia Daly, IXIS Capital Markets
6.    Jim Ray, Bank of America                    57. Megan Connity, J.P. Morgan
7.    Sharon Fremer, Bank of America Securities   58. Bruce Elliott, J.P. Morgan,
8.    Maria Cadorniga, Bank of Tokyo Mitsubishi   59. Christophe Jamet, J.P. Morgan
9.    Doug Phythian, Barclays                     60. Annette Bickels, J.P. Morgan,
10.   Stacy Barton, Barclays                      61. Mary Louise Alavarces, JP Morgan
11.   Tajia Ballit, Barclay's                     62. Joshua Santana, JP Morgan
12.   Patricia Walsh, Barclays Capital            63. Frank Tedreira, JP Morgan,
13.   Slahar Sulimanov, Bear Stearns              64. Donna Jacobs, Key Bank,
14.   Joanna Martinez, Bear Stearns               65. Charis Yang, Lehman Brothers
15.   Lynne Mackey, BMO Capital Markets           66. Don Periparty, Mellon,
16.   Jeremy Kaber, BMO Capital Markets,          67. Chris Daskalikas, Merrill Lynch
17.   Kenneth Young, BNP Paribas,                 68. Meera Pardinani, Merrill Lynch
18.   Jim Pasqualoni, Boston Global Advisors,     69. Kenny Au, Merrill Lynch,
19.   Visa Ganesan, Boston Global Advisors,       70. Debbie Minors, Merrill Lynch
20.   Linda Leary, Brown Brothers Harriman,       71. Chris Torry, Merrill Lynch,
21.   Paul Armstrong, Brown Brothers Harriman,    72. Jim Jenkinson, Mizuho Securities
22.   Mariana Kind, Capco                         73. Kristina Savicic, M&I Bank,
23.   John Surgent, Capco                         74. Steve Kenny, M&I Bank
24.   Tom Wagner, Capco                           75. Xavier Kunukkasseril, Morgan Stanley
25.   Sherry Evans, CIBC,                         76. John Lee, National Financial
26.   Erica Granger, Citadel Investment Group     77. Ahmet Hatiogou, National Financial
27.   John Giardina, Citigroup                    78. Jim Happaney, Nomura Securities
28.   Ann KLein, Citigroup                        79. Bob Moserowitz, Nomura
29.   Eric Levine, Citigroup                      80. Judy Berschadsky, Nomura Securities
30.   Martha Gaul, Citigroup                      81. Elaine Stankiewicz, Northern Trust
31.   Sathish Munuswami, Citigroup                82. Bill O'Meara, Northern Trust,
32.   Richard Davis, Citigroup                    83. Amy Werkheiser, Pershing, LLC,
33.   Abbas Galani, Credit Suisse                 84. Larry Ogles, PFP Trust Company,
34.   Desi Aldenese, Credit Suisse,               85. Barbara Masoot, Raymond James,
35.   Tom O'Keefe, Credit Suisse,                 86. Michael Searle, RBC Capital Mkts,
36.   Constantine Khodik, Credit Suisse           87. Jaymee Lebowsky, RBC Dain Rauscher,
37.   Suresh Kaeakam, Credit Suisse               88. John Panchery, SIA,
38.   Tom Magnavita, Deutsche Bank                89. Lauren Nau, Societe Generale
39.   Nick Waterson, Dresdner Kleinwort           90. Brian McLoone, State Street,
40.   David Howe, Dresdner Kleinwort              91. Keith Yokoyama, Sumitomo Trust
41.   Margaret Koontz, DTCC                       92. Nancy Daly, Sumitomo Trusts,
42.   Greg McConnell, Equilend                    93. Andre Setyon, Sungard,
43.   Dave Perlzweig, FCC,                        94. Scott Wellington, Sungard,
44.   Tom Fan, First Clearing                     95. Tim Maloy, UBS
45.   John Tew, Frost Bank                        96. Colleen McElwee, Vanguard
46.   Susan Kuller, Goldman Sachs                 97. Patty Rice, Wachovia
47.   Alden McLelland, Goldman Sachs              98. Chuck Bailey, Wachovia
48.   Ji-Hao Chen, Goldman Sachs                  99. Theresa Shorter, Wachovia
49.   Les Nelson, Goldman Sacs                    100. Alan Maxwell, Wachovia
50.   Melanie Wexler, ING                         101. Larissa Alstrand, Wells Fargo
51.   Anna Havard, ING,




                                                                                              19
Agency Lending Disclosure Taskforce


Summary:

1. Announcements

   The technical specification has been updated on the ALD website. The change
    clarifies that a principal ID should not appear in more than one allocation (type 2
    records) in a contract.
   Two more updates are about be published and announced to clarify the definition of
            o Projected versus actual tri-party amount and
            o Collateral type “X”
   Work continues on the No Action letter. A new draft has been received from counsel.
    Changes must be reviewed and then presented to the SEC. No date was specified for
    completing the review or SEC presentation.


2. Testing update

   Group B parallel testing has begun. The group consists of 13 agent lenders and 26
    broker-dealers. The first files are currently being exchanged among the group.
    Results will be discussed on the 4:00 PM call today.

   EquiLend Update
          o Testing volume is increasing.
          o No processing issues have been identified.
          o Enhancements continue to be made to the user interface.
          o EquiLend is reviewing their Master File functionality for potential
             enhancements
          o The ALD features are available in both staging and production as both are
             running the same version of software.

   DTCC
            o ALD processing is available in both test and production.
            o No issues were identified

   SunGard Update
          o Problems were encountered last night with copying set-up information
             from production to test. Reconciliation reports will be delivered late
             today, after the problem is corrected.
          o The capability to deliver reconciliation reports should be available in
             production next week. Reconciliation reporting is currently only available
             in test.
          o If you are a Loanet broker-dealer and not part of the Group B parallel test
             then you need to notify SunGard if you want to test with current day (close
             of prior business day) data.




                                                                                        20
Agency Lending Disclosure Taskforce


   Everyone is encouraged to review the published parallel testing issues on the ALD
    website. Communicate with your counterparties about problems that may potentially
    affect your firm.

3. Other questions

   What is the status of discussions related to agent lenders specifying themselves as
    principal in the loan when giving contractual settlement on failing client sales?
        o ALD processing requires that a principal is specified for every loan contract.
        o Each lending agent must determine and implement their process for dealing
           with client sale fails.
        o If a lending agent adopts the process of allocating themselves as a principal in
           the contract to replace the clients failing position then the lending agent must
           be an approved principal of the borrower.

   What is the status of resolving duplicate pseudo tax ids?
      o This is an ongoing process.
      o Agent lenders must continue to follow up with DTCC and borrowers to
           resolve duplicate tax ids.
      o DTCC is looking into enhancing the name search capability but no decisions
           have been made on this topic.




                                                                                         21
Agency Lending Disclosure Taskforce




Testing Working Group Meeting Summary, Tuesday, August 15, 2006

Participants:

    1.    Blair Walk, Abbey National             47.   William Pam, Investor Bank and Trust
    2.    Josh Neto, Abbey National              48.   Charles Prescho, Investors Bank
    3.    Kevin Galvin, ABN AMRO                 49.   Pat Daily, IXIS Capital Markets
    4.    Ross Levin, ABN AMRO                   50.   Mary Louise Alavarces, JP Morgan
    5.    Anisa Butash, AIG                      51.   Joshua Santana, JP Morgan
    6.    Rosalie Fadem, Bank of NY              52.   Kristoff Jammet, JP Morgan
    7.    Doug Phythian, Barclay Global          53.   Megan Connety, JP Morgan
          Investors                              54.   Amy Kwong, JP Morgan Chase
    8.    Joanna Martinez, Bear Stearns          55.   Bruce Elliott, JP Morgan Chase
    9.    Zakhar Suleymanov, Bear Stearns        56.   Donna Jacobs, Key Bank
    10.   Lynne Mackey, BMO Capital Markets      57.   Kristina Savicic, M & I Bank
    11.   Jim Pasqualoni, Boston Global          58.   Steve Kenney, M&I Bank
          Advisors                               59.   Steve Kitty, M&I Bank
    12.   Jim Hoover, Boston Global Advisors     60.   Meera Pardanani, Maryland
    13.   Pierce McDowell, Brown Brothers        61.   Debbie Minors, Merrill Lynch
          Harriman                                     Investment Managers
    14.   Paul Armstrong, Brown Brothers         62.   Gil Esquivel, Merrill Lynch
          Harriman                               63.   May Moy, MetLife
    15.   Linda Leary, Brown Brothers Harriman   64.   Mike Tucci, Metropolitan West
    16.   Marianna Kind, Capco                   65.   Ludmila Bisio, Mitsubishi
    17.   John Surgent, Capco                    66.   Jim Jenkinson, Mizuho Securities
    18.   Tom Wagner, Capco                      67.   Mary Jo Graffeo, Morgan Stanley
    19.   Sherry Evans, CIBC                     68.   John Lee, National Financial
    20.   Stephen Bies, CIBC                     69.   Sanjay Patankar, National Financial
    21.   Erica Grainger, Citadel                      Services
    22.   Yelena Nepomnyashaya, Citigroup        70.   Bob Moserowitz, Nomura
    23.   Ann Klein, Citigroup                   71.   Bill O'Meara, Northern Trust
    24.   Richard Davies, Citigroup              72.   Summer Hinton, Paloma Securities
    25.   John Giardina, Citigroup               73.   Amy Werkheiser, Pershing, LLC
    26.   Constantine Khodik, Credit Suisse      74.   Larry Ogles, PFPC Trust
    27.   Christie Schaffner, Credit Suisse      75.   Steve Bartalo, Raymond James
    28.   Abbas Gilani, Credit Suisse            76.   Michael Serle, RBC Capital Markets
    29.   Tom O'Keefe, CSFB                      77.   Bill Cole, RBS Greenwich Capital
    30.   Donald Copans, Deutsche Bank           78.   Les Nelson, SIA
    31.   Carla Flores, Dresdner                 79.   John Panchery, SIA
    32.   David Howe, Dresdner                   80.   Keith Yokoyama, Sumitomo Trust
    33.   Yoko Hugley, Dresdner                  81.   Nancy Baly, Sumitomo Trust
    34.   Margaret Koontz, DTCC                  82.   Scott Wellington, Sungard
    35.   Art Carr, FIMAT                        83.   Brenda Fisher, Sungard
    36.   Joe Bruno, Fortis Securities           84.   Kevin Shinoy, Treasure
    37.   John Tew, Frost Bank                   85.   James Neumann, UBS
    38.   Susan Kuller, Goldman Sachs            86.   Amy Marks, UBS
    39.   Sara Flieger, Goldman Sachs            87.   Emil Carandang, Vanguard
    40.   Michael Doyle, Goldman Sachs           88.   Colleen McElwee, Vanguard
    41.   Alden McLellan, Goldman Sachs          89.   Theresa Shorter, Wachovia
    42.   Becky Frayer, HBK Global               90.   Patty Rice, Wachovia
    43.   George Rodriguez, ING                  91.   Chuck Bailey, Wachovia
    44.   Anna Havard, ING                       92.   Alan Maxwell, Wachovia
    45.   Melanie Wexler, ING
    46.   Ms. Jean Chin, ING


                                                                                         22
Agency Lending Disclosure Taskforce


Summary:

1. Announcements

   No Action letter
          o This past Monday 8/14 a 2-hr discussion took place with legal and capital
              group representatives; a revised draft letter will be delivered to SEC this
              afternoon
          o Task force will try to get an estimate on when the SEC will respond to the
              group
          o The regulators know the sense of urgency and that the group is anxious to
              receive a copy of the letter.

   Testing readiness
           o Firms should actively communicate with their vendor if they are having
               problems with testing and should not simple wait for the problem to
               resolve itself
           o SunGard (Loanet) will assume that testing is being performed using the
               current date unless informed that you want to use data from the parallel
               testing date
           o Broker-dealers should not wait for agent lenders to send data in production
               to begin their testing. You should be testing now.
           o Broker-dealers must be on the latest release of vendor software to insure
               correct ALD processing and must contact their vendor if they are not using
               the required release of software
           o Questions or issues with vendor software, EquiLend, Loanet, Global One,
               World Lend, etc. should be directed to the vendor for resolution. Global
               One users should ensure that they are using at least release 5.5.1,
               otherwise they will be unable to complete a full test / reconciliation.
           o SunGard has weekly calls on Wednesday to update their user community
           o Some lenders will be sending in their test files daily and it is up to the
               borrowers whether or not they will take in the file. It is the responsibility
               of the borrowers to make sure they are getting everything that is available
               and keep track of which lenders are sending parallel test files vs. daily
               production files.

2. Re-qualification Survey

   The results of the 8th broker-dealer principal re-qualification survey will be
    distributed to regulators today
   Approximately 30,000 additional principals were approved during the last survey
    period; Close to 211,000 principals have been approved to date and the expected
    number of approvals continues to grow
   Progress on completing confidentiality agreements lags expectations and is not
    achieving the same rate of progress as principal approvals.



                                                                                         23
Agency Lending Disclosure Taskforce


3. Testing update

   Group B parallel testing
          o Testing is moving to the third business test date (July 31) tonight
          o Files are being successfully processed between counterparties
          o Counterparties are researching reconciliation issues
          o Some firms are seeing loans containing principals that have been rejected
              and principals that were never sent for re-approval. These inconsistencies
              are being investigated.

   Proposed Group C parallel testing
           o Many agent lenders participating in group A & B testing want to be
              excused from group C participation due to the daily processing demand
              and the need to position resources in preparation for Phase II.
           o Some agent lenders have agreed to send files but do not want to participate
              in daily calls or actively support the inquiries as they will be focusing on
              specific counterparty testing
           o Testing would use the same dates as group B testing, July 27 – Aug. 1
           o The composition of group C will probably include agent lenders and
              broker-dealers that have not participated in groups A or B with limited
              participation from group A & B agent lenders for sending files
           o Northern Trust stated that they will be fully participating in group C
              testing
           o Capco will contact agent lenders that have not participated in groups A or
              B to determine group C participation
           o Broker-dealers should also contact counterparties if they have not received
              test files or believe they should participate in group C
           o Firms should send an e-mail to Capco (Mariana.Kind@capco.com) if they
              want to participate in group C testing


4. Vendor update

   SunGard Update
          o Actively monitoring group B testing
          o Files received after 9 AM are presenting processing issues due to the
             volume of data
          o Files are processed “first in, first out” so sending files earlier would
             benefit testing participants
          o Issues were identified with setting up expected files but are being
             corrected
          o The reconciliation process should be available in production by the end of
             this week
          o The credit and capital components will be deployed over the next two
             weeks with the online user interface changes being followed by the report
             delivery


                                                                                       24
Agency Lending Disclosure Taskforce




5. Other questions

   The relevance of the settlement date check in the SunGard reconciliation was
    questioned by a firm that does not believe it should be performed
           o SunGard replied that this validation check is scheduled to be removed
               from the reconciliation process

   The fact that principals not approved by broker-dealers are being received in ALD
    files from agent lenders was questioned
             o Agent lenders and broker-dealers should determine a plan for reducing
                loans from unapproved principals
             o Broker-dealers should contact agent lenders if they are seeing principals in
                testing that have not been previously sent for approval and request the
                principal be sent for pre-approval
             o Broker-dealers also requested that agent lenders send a master file of
                principals, if possible, for reconciliation. A few agent lenders have
                indicated that they can send a master file if requested




                                                                                        25
Agency Lending Disclosure Taskforce




Testing Working Group Meeting Summary, Tuesday, August 22, 2006

Participants:
1.    Amal Elsaid, Abbey National                  54. Christophe Jammet, JP Morgan
2.    Josh Neto, Abbey National                    55. Meagan Conaty, JP Morgan
3.    Ross Levin, ABN AMRO                         56. Mary Louise Alavarses, JP Morgan
4.    Rob Racaniello, ABN AMRO                     57. Joshua Santana, JP Morgan
5.    Bernie Yannotti, ABN AMRO                    58. Frank Pedreira, JP Morgan
6.    Vanessa Butash, AIG                          59. Robert Chao, JP Morgan
7.    Sharon Fremer, Banc of America Securities    60. Bruce Elliott, JP Morgan Chase
8.    Hiromi Otsuka, Banca IMI Securities          61. Donna Jacobs, Key Bank
9.    Patricia Walsh, Barclay's Capital            62. Charis Yang, Lehman Brothers
10.   Doug Fithian, Barclay's Global Investors     63. Kristina Savicic, M&I Bank
11.   Casey Barton, Barclay's Global Investors     64. Brian Joy, Mellon Bank
12.   Charles DiVuolo, Bear Stearns                65. Andrew Hall, Merrill Lynch
13.   Mr Zakhar Suleymanov, Bear Stearns           66. Meera Pardanani, Merrill Lynch
14.   Joanna Martinez, Bear Sterns                 67. Chris Daskalakis, Merrill Lynch
15.   Michael Mulhall, BNP                         68. David Alavarces, Merrill Lynch
16.   Theresa Auw, BNP Paribas                     69. May Moy, Met Life
17.   Paul Armstrong, Brown Brothers Harriman      70. Michael Blues, MetLife
18.   Linda Leary, Brown Brothers Harriman         71. Mike Tucci, Metropolitan West
19.   Pearce Mcdowell, BBH                         72. Jim Jenkinson, Mizuho Securities
20.   Mariana Kind, Capco                          73. Mary Jo Graffeo, Morgan Stanley
21.   John Surgent, Capco                          74. Xavier Kunukkasseril, Morgan Stanley
22.   Tom Wagner, Capco                            75. Sanjay Patankar, National Financial Services
23.   Victor Lopez, CIBC                           76. Judy Berschadsky, Nomura Securities
24.   Sherry Evans, CIBC                           77. Elaine Stankiewicz, Northern Trust
25.   Louise Li, Citibank                          78. Bill O'Meara, Northern Trust
26.   John Giardina, Citigroup                     79. Amy Werkheiser, Pershing, LLC
27.   William Mascaro, Citigroup                   80. Larry Ogles, PFPC Trust Company
28.   Richard Davies, Citigroup                    81. Jane Palladino, RBC Capital Markets
29.   VJ Gaddameedi, Citigroup                     82. Michael Searle, RBC Capital Markets
30.   Abbas Gilani, Credit Suisse                  83. Jamie Lebowski, RBC Dain Rauscher
31.   Constantine Khodik, Credit Suisse            84. James Glover, RBS Greenwich
32.   Tom O'Keefe, CSFB                            85. Bill Cole, RBS Greenwich Capital
33.   David How, Dresdner                          86. Andre Tutoyan, Securities
34.   Nick Watterson, Dresdner Kleinwort           87. John Panchery, SIA
35.   Margaret Koontz, DTCC                        88. Victor Langella, Societe Generale
36.   Greg McConnell, Equilend                     89. Alexander Brook, Societe Generale
37.   Art Carr, Fimat                              90. Brian Turner, Societe Generale
38.   Brandon Bovey, Fimat USA                     91. Foujoloie Judis, Societe Generale
39.   Bernie Digiulio, First Clearing              92. Kelly Ediz, State Street
40.   Calvin Inge, First Clearing                  93. Nancy Daly, Sumitomo Trust
41.   Bernie Diguilio, First Clearing              94. Scott Wellington, Sungard
42.   Dave Perlzweig, First Clearing               95. James Neumann, UBS
43.   Joe Bruno, Fortis Securities                 96. Amy Marks, UBS Securities
44.   John Tew, Frost Bank                         97. Ken Delecki, US Banc
45.   Susan Kuller, Goldman Sachs                  98. Will Martinez, US Bank
46.   Alden McLellan, Goldman Sachs                99. Colleen McElwee, Vanguard Group
47.   Ray Porzio, HSBC                             100. Alan Maxwell, Wachovia
48.   George Rodriguez, ING                        101. Shane Pringle, Wachovia
49.   Elizabeth Grabowski, ING Financial Markets   102. Chuck Bailey, Wachovia
50.   Roman Brill, ING Financial Markets           103. Larissa Ahlstrand, Wells Fargo
51.   William Tam, Investors Bank & Trust
52.   Tim Hulme, Investor's Bank & Trust
53.   Patricia Daly, IXIS Capital Markets




                                                                                               26
Agency Lending Disclosure Taskforce




Summary:

1. Announcements

   Rosters have been updated on the website. Contact information has been omitted
    from the website data unless a firm has specifically requested that it be published.

   The group C parallel testing participants have been updated on the website

   The website will be updated today with technical specification version 3.9. The
    change to the document is that a Cash collateral amount of zero on the daily loan file
    will now be allowed for collateral types “C” and “M.” A significant volume of
    legitimate zero collateral situations from corporate action events was identified in
    testing and prompted the change. Previously the change was required to force a value
    of $0.01 instead of allowing zero, some agent lenders programmed this change, and
    cannot go back now, and therefore broker-dealers should be prepared to receive either
    zero or $0.01 for these contracts.

2. Escalation procedures

   A meeting was conducted on Monday, August 21, to review problem situations and
    the responsibility for required communication.
   Although the general flows will be identified, each firm must develop detailed
    procedures and specific flows.
   Group e-mail addresses should be developed for communication with counterparties.
   Capco will build on the infrastructure flow to identify the flow for escalation of
    issues.
   The results of the meeting will be published this week.

3. Testing update

   Most firms are now participating in testing.
   Approximately 10 broker-dealers and 6 agent lenders have been identified with no
    testing status.
   Capco will be contacting firms that have not participated in one of the parallel groups
    and have not updated the PMO with their testing status.
   Information collected regarding testing status will be presented to the SEC in
    response to their request.
   Group B parallel testing is in its final 2 days.
   Group C parallel testing begins on Monday, August 28th.
            o Anyone not participating in group C testing can still e-mail Mariana Kind
                to join the test.
            o The group C roster must be finalized this week




                                                                                           27
Agency Lending Disclosure Taskforce


            o A call to kick-off group C will be held on Friday to discuss the schedule
              and expectations. A notification will be sent out with time and call-in
              number information.
            o Daily 4:00 PM calls will continue during the group C testing.

4. Vendor update

   EquiLend
          o Experiencing daily increases in testing volume
          o Currently making validation changes to support the specification change
             to allow a zero cash amount on contracts.
          o Continue testing the daily issue notification process for the various
             possible scenarios.

   SunGard Update
          o Currently making validation changes to support the specification change
             to allow a zero cash amount on contracts. Changes should be
             implemented in the next couple weeks.
          o Settlement date matching will be removed from the reconciliation process
             and implemented also within the next couple weeks.
          o The 8 credit and capital monitoring reports are being delivered this week.
             Two reports are being deployed each night and are being run manually
             during the day. Broker-dealers should look for the new reports in the
             download queues for capital and credit monitoring.
          o The first credit monitoring reports should be available today based on the
             parameters set up for the broker-dealer.
          o Note: The initialization process for new principals is based n the
             parameters of the principal. Once these are initially set, upon receipt of a
             new principal, changes must be made for each individual principal. The
             changes are effective immediately.

5. Go live – October 1, 2006

   Capco is collecting information on firms anticipated production implementation dates
    with a suggested date of September 18th. Firms should notify Capco with their
    anticipated implementation date.
   Firms should attempt to be in production for at least 2 weeks prior to the October 1
    deadline.
   During the September production period, firms should be validating scheduling,
    contact information, escalation procedures and overall communication.
   Some agent lenders are already sending files in production nightly and more are
    schedule within the next couple weeks.
   Capco will be providing information to the SEC regarding the number of firms and
    their intended go live dates. The individual firm names will not be disclosed.
   The ALD steering committee will also discuss determining a date to decide if October
    1st is an achievable go live date.


                                                                                          28
Agency Lending Disclosure Taskforce




                                      29
    Agency Lending Disclosure Taskforce



    Testing Working Group Meeting Summary, Tuesday, August 29, 2006

    Participants:
        1.    Josh Neto, Abbey National           44.   Michael Doyle, Goldman Sachs
        2.    Amal Elsaid, Abby National          45.   Anna Havard, ING
        3.    Kevin Galvin, ABN Amro              46.   George Rodriguez, ING
        4.    Ross Levin, ABN Amro                47.   Tim Hulme, Investors Bank & Trust
        5.    Bernie Yannotti, ABN Amro           48.   William Tam, Investors Bank & Trust
        6.    Anisa Butash, AIG                   49.   Patricia Daly, IXIS Capital Markets
        7.    Kristina Savicic, AMI               50.   Meagan Conaty, JP Morgan
        8.    Jim Ray, Bank of America            51.   Mary Alavarces, JP Morgan
        9.    Maria Cadorniga, Bank of Tokyo      52.   Robert Chao, JP Morgan
              Mitsubishi USJ                      53.   Frank Pedreira, JP Morgan
        10.   Doug Fithan, Barclays               54.   Joshua Santana, JP Morgan
        11.   Patricia Walsh, Barclay's Capital   55.   Bruce Elliot, JP Morgan Chase
        12.   Casie Barton, Barclay's Global      56.   Donna Jacobs, Key Bank
              Investors                           57.   Charis Yang, Lehman Brothers
        13.   Joanna Martinez, Bear Stearns       58.   Steve Kinney, M&I bank
        14.   Charles DiVuolo, Bear Stearns       59.   Steve Kenney, M&I Bank
        15.   Mr. Azir Sulumarov, Bear Stearns    60.   Gil Esqivel, Merrill Lynch
        16.   Jeremy Kaber, BMO Capital Markets   61.   Meera Pardanani, Merrill Lynch
        17.   Michael Mohall, BNP Paribas         62.   Hanna Zielinska, Merrill Lynch
        18.   Pierce McDowell, Brown Bros.        63.   Mike Tucci, Metropolitan West
        19.   Linda Leary, Brown Brothers         64.   Frank Souder, Mizuho Securities
        20.   John Langley, Calyon Securities     65.   Jim Jenkinson, Mizuho Securities
        21.   Mariana Kind, Capco                 66.   Ahmet Hatiogou, National Financial
        22.   Stephen Bies, CIBC                  67.   Sanjay Partinker, Nat'l Fin. Services
        23.   Mary Evans, CIBC                    68.   Mike Farrell, Nomura Securities
        24.   Erica Granger, Citadel              69.    Jim Happaney, Nomura Securities
        25.   Eric Levine, Citigroup              70.   Elaine Stankiewicz, Northern Trust
        26.   Bill Mascaro, Citigroup             71.   Mike Dunn, Paloma Securities
        27.   Ann Klein, Citigroup                72.   Kate Kuras, Paloma Securities
        28.   John Giardina, Citigroup            73.   Summer Hinton, Paloma Securities
        29.   Richard Davies, Citigroup           74.   Amy Werkheiser, Pershing, LLC
        30.   Abbas Gilani, Credit Suisse         75.   Steve Bartalo, Raymond James
        31.   Nancy Byrne, Deutsche Bank          76.   Barbara Masoot, Raymond James
        32.   Tom Magnavita, Deutsche Bank        77.   Jane Paladino, RBC
        33.   Francis So, Dresdner                78.   Michael Searle, RBC Capital Markets
        34.   Nick Waterson, Dresdner,            79.   Bill Cole, RBS Capital
        35.   Greg McConnell, EquiLend            80.   Brian Turner, SG
        36.   Brandon Bovay, Fimat                81.   Keith Yokoyama, Sumitomo Trust
        37.   Damion Sim, Fimat                   82.   Brenda Fisher, SunGard
        38.   Bill Bodnar, First Clearing         83.   Scott Wellington, SunGard
        39.   Joe Bruno, Fortis Securities        84.   Amy Marks, UBS Securities
        40.   John Tew, Frost Bank                85.   Will Martinez, US Bank
        41.   Alden McLellan, Goldman Sachs       86.   Patty Rice, Wachovia
        42.   Mr. Cheng-ha Chen, Goldman Sachs    87.   Shane Pringle, Wachovia
        43.   Peter Lasaga, Goldman Sachs

Summary:

Announcements


                                                                                            30
Agency Lending Disclosure Taskforce


1. No Action Letter

   There has been no feedback or an update from the regulators regarding the latest draft of
    the No-Action letter. We are awaiting a response by the end of this week. Tere is still no
    draft that can be distributed to the taskforce.

2. Re-qualification Surveys

   The group was reminded that re-qualification surveys have been sent out to both borrowers
    and agent lenders. If someone has not received the link, they can contact Thomas Wagner
    at Capco.
   The 9th borrower survey has been answered by approximately 54%. There are still 16
    missing responses. If any BD is at 100% complete they will not receive a notification to
    answer this survey
   The 8th Agent Lender survey has been answered by only 45%. There are still 17 lenders
    that need to respond.

3. Testing update

   The Group B parallel test group has been completed; the last parallel test group, Group C,
    was initiated yesterday.
   Group B went well and several firms are following up on their outstanding issues.
   One agent lender, Northern Trust experienced an issue with reporting collateral. It was
    being reported as a cash pool. This has been fixed and should be effective with today’s file
   There is still though the open issue with the Borrower Settlement Location field for Global
    One and EquiLend. Global One has communicated this should be resolved by 9/6, while
    EquiLend does not have an estimated due date for resolution.
   For Group C, agent lenders and non-Loanet borrowers users of SSF, should have submitted
    their files last night after 8pm EST and this morning (8/29) before 9am ET.

4. Vendor update

   EquiLend
          o Are working on implementations for two new changes with
                1. Some new validations
                2. A failing file notification process
          o Both are being tested internally at this time
          o There are no issues with sending and receiving test files and all is going well
             with testing

   SunGard
         o Has noticed that many files have been submitted early and there is nothing
            sitting in the queue.
         o A transmission was run at 9:45 am ET and they have processed the
            reconciliation reports.



                                                                                         31
Agency Lending Disclosure Taskforce


            o Reports are available and if you have not received any, users should check their
              setups and for borrowers confirm they have added to the expected file option.
            o Loanet users need to confirm they have added their tax-ids for correct data
              extraction
            o Due to some confusion with the Capital and Credit procedures SunGard will be
              attempting to copy the Phase1 credit and capital data and move it into test.
              Within the test environment SunGard users can gain the familiarity and add the
              necessary limits and parameters in order to create the necessary reports for
              capital and credit testing.
            o With this application change by SunGard it will give their users added
              flexibility when entering credit limits for their principals.
            o The cash collateral validation fix is in QA and should be deployed this week.
            o Based on this morning’s activity with Group C files all is going well. It was
              reiterated that nothing is sitting in the queue and throughout testing there will be
              three batch cycles processed to push out files. They are at:

                            1. Batch 1 – From 8-9am ET – beginning of the day process
                            2. Batch 2 – At 12pm ET – middle of the day process
                            3. Batch 3 - At 4pm ET – end of day process

            o Northern Trust warned SunGard and the group that they are experiencing
              internal test region problems and can’t submit a test file.
            o Currently there is no established cut-off time for late files. Scott Wellington did
              say they will assist NT at any time today when their files are ready to be pushed
              through.

   Other SunGard issues

            o SunGard will not disregard disclosed principals on a file. They will push files
              through including disclosed principals.
            o A fix is in and needs to be deployed for multiple lines for a lender.

   102% - 105% Over collateralization issue inquiry

            o In anticipation of “mark to markets”, BGI is looking to get a feel from other
              BD’s on what type of action needs to be taken for collateralizations over 105%
              for international securities. Is there any different treatment of international
              securities versus domestic securities? Domestic securities have the 102%-105%
              range while international are set at 105%.
            o SunGard does not treat each security differently as the 105% rule applies to
              both.
            o This will vary by broker-dealer and it was mentioned that taking a sample of
              open loans to see where the tolerance is at can be a good approach.

5. Production Readiness Assessment




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Agency Lending Disclosure Taskforce


   The group was reminded that last Friday, August 25th an email went out requesting the day
    when firms will be ready to send and receive files in production.
   Capco needs to provide the regulators several updates with the progress of testing and what
    is going on in testing inside and out of the parallel test group.

6. Future taskforce calls update

   A weekly “All taskforce” call will now occur every Thursday and replace the “Credit and
    Capital” call, as many of the credit and capital issues have been resolved and the focus is
    on testing and addressing other issues leading up to October 1st
   The group will be notified in mid-September whether the weekly calls will continue




                                                                                         33
Agency Lending Disclosure Taskforce




Testing Working Group Meeting Summary, Tuesday, September 5, 2006

Participants:
      1.    Josh Neto, Abbey National                    21.   Greg McConnell, Equilend
      2.    Ingnacio Ammendola, ABN AMRO                 22.   Dave Perlzweig, FCC
      3.    Ross Levin, ABN AMRO                         23.   Art Carr, Fimat
      4.    Anisa Butash, AIG                            24.   Brandon Bovat, Fimat, USA
      5.    Hiromi Otsuka, Banca IMI Securities          25.   Calvin Inge, First Clearing
      6.    Casey Barton, Barclays Global Investors      26.   Tom Fan, First Clearing
      7.    Charles DiVullo, Bear Stearns                27.   John Tew, Frost Bank
      8.    Zakhar Suleymonef, Bear Stearns              28.   Alden McClelland, Goldman Sachs
      9.    Jeremy Kaber, BMO Capital Markets            29.   Susan Kuller, Goldman Sachs
      10.   Lynn Mackey, BMO Capital Markets             30.   Les Nelson, Goldman Sachs
      11.   Michael Mulhall, BNP Paribas                 31.   Michael Doil, Goldman Sachs
      12.   Paul Armstrong, Brown Brothers               32.   Becky Frayer, HBK Global
      13.   Mariana Kind, Capco                          33.   George Rodriguez, ING
      14.   John Surgent, Capco                          34.   Anna Habbard, ING
      15.   Satish Monuswami, Citigroup                  35.   William Pan, Investor Bank and Trust
      16.   Constantine Khodik, Credit Suisse            36.   Tim Hulme, Investor's Bank & Trust
      17.   Abbas Gilani, CSFB                           37.   Patricia Daley, IXIS Capital Markets
      18.   Tom Magnavita, Deutsche Bank                 38.   Joshua Santana, JP Morgan
      19.   David Howe, Dresdner Kleinwort               39.   Kristoff Jammet, JP Morgan
      20.   Margaret Koontz, DTCC                        40.   Megan Conaty, JP Morgan

      Summary:

      1. Announcements

           A status update was sent to the SEC last week that contained a summary of Phase I
            progress and the status of Phase II testing and readiness.
           No feedback has been received from regulators on the no action letter delivered in
            August. A draft still cannot be released.
           The All Task Force call will be conducted every Thursday during September. The
            Credit and Capital Groups call has stopped.
           Daily Group C parallel testing calls are being conducted at 4:00 PM through the end
            of the test, scheduled for September 13th. All firms are welcome to dial in and listen
            to the status update.

      2. Testing update

           Group C parallel testing is experiencing more routine issues that are being resolve
            bilaterally.
           SunGard broker-dealers in Group C experienced some confusion with the testing set-
            up of capital and credit reporting parameters. The process was revised and testing is
            progressing.




                                                                                                34
Agency Lending Disclosure Taskforce


   Communication problems developed between EquiLend and DTCC due to increased
    volume. A time spacer was added to the EquiLend data transfer to correct the
    problem.

3. Vendor update

   EquiLend Update
          o A problem developed during parallel testing that prevented files from
             being transferred to DTCC due to volume. A delay was added to the
             EquiLend transmission in test to correct the problem. The correction will
             be moved to production. EquiLend was able to resend files that were
             affected by the bug.
          o Problem handling processes and alerts are being fine tuned for production

   SunGard Update
          o Credit and capital reporting was added to the test environment and is
             experiencing some performance problems that are being researched.
          o The Credit Monitor Exception report is taking “hours” to complete.
          o The performance issues should be resolved in the next couple days.
          o SunGard is working through issues with client sign-up to the ALD
             process.
          o Clients are beginning to provide feedback on the reports.
          o Lenders are beginning to send data in production but the reporting is
             currently only available in test. SunGard may promote the reporting to
             production later this week.

4. Escalation procedures

   Capco developed a group of decision trees and flows, based on the meeting conducted
    on August 21.
   The documents were sent to a smaller group for initial comments and will be
    distributed and posted to the website after feedback is received from the working
    group.
   The flows and descriptions provide a high level framework as a starting point for
    firms to add their specific details.
   Individual firms must determine their requirements for:
            o How information will flow
            o Who will be involved with the process
            o What is the communication path with each counterparty
   Anyone interested in receiving a working copy and providing feedback, please
    contact Capco.

5. Questions




                                                                                      35
Agency Lending Disclosure Taskforce


   A broker-dealer raised the following question regarding the deadline for Friday close
    of business file transfer – Is the deadline for receiving Friday close of business files
    3:00 AM on Saturday or 3:00 AM Monday?
            o The broker-dealer questioning the deadline prefers to get Friday files by
               3:00 AM on Saturday.
            o SunGard noted that any file received before noon on Saturday will be
               passed through to the broker-dealer. Their system comes down at noon on
               Saturday which would delay later files until Sunday afternoon.
            o Two agent lenders stated the intention to provide files before 3:00 AM on
               Saturday and to attempt to resolve any issues in the same timeframe.




                                                                                         36
      Agency Lending Disclosure Taskforce




      Testing Working Group Meeting Summary, Tuesday, September 12, 2006

      Participants:
1.    Josh Neto, Abbey National                       45.   Anna Havard, ING
2.    Ross Levin, ABN Amro                            46.   George Rodrigues, ING
3.    Rob Racaniello, ABN Amro                        47.   Tim Hulme, Investors Bank & Trust
4.    Bernie Yannotti, ABN Amro                       48.   William Tam, Investors Bank & Trust
5.    Anisa Butash, AIG                               49.   Joshua Santana, JP Morgan
6.    Hiromi Otsuka, Banca Imi Securities             50.   Meagan Conaty, JP Morgan
7.    Jim Ray, Bank of America                        51.   Frank Pedreira, JP Morgan
8.    Suresh Joseph, Bank of NY                       52.   Christophe Jammet, JP Morgan
9.    Maria Cadorniga, Bank of Tokyo Mitsubishi USJ   53.   Mary Alavarces, JP Morgan
10.   Patricia Walsh, Barclay's Capital               54.   Amy Kwong, JP Morgan Chase
11.   Doug Fithian, Barclay's Global Investors        55.   Bruce Elliott, JP Morgan Chase
12.   Zakhar Suleymanov, Bear Stearns                 56.   Robert Chao, JP Morgan Securities
13.   Lynn Maki, BMO Capital Markets                  57.   Donna Jacobs, Key Bank
14.   Michael Mulhall, BNP Paribas                    58.   Debbie Minors, Maryland Investment Managers
15.   Jim Pasqualoni, Boston Global Advisors          59.   Meera Pardanani, Merrill Lynch
16.   Paul Armstrong, Brown Brothers Harriman         60.   David Alavarcez, Merrill Lynch
17.   John Langley, Calyon Securities                 61.   Michael Bluze, Met Life
18.   Mariana Kind, Capco                             62.   Richard Cai, Mitsubishi Trust
19.   John Surgent, Capco                             63.   Jim Jenkinson, Mizuho
20.   Tom Wagner, Capco                               64.   Xavier Kunukkasseril, Morgan Stanley
21.   Steve Bies, CIBC                                65.   Sanjay Patankar, National Financial Services
22.   Andre Tutuyan, Countrywide Securities           66.   Elaine Stankiewicz, Northern Trust
23.   Desi Aldenese, Credit Suisse                    67.   Christina Royer, PC Trust
24.   Constantine Khodik, Credit Suisse               68.   Amy Werkheiser, Pershing, LLC
25.   Abbas Gilani, Credit Suisse                     69.   Barbara Masut, Raymond James
26.   Keith Okeese, Credit Swiss                      70.   Steve Bartalo, Raymond James
27.   Suresh Kabakam, Credit Swisse                   71.   Jane Paladino, RBC Capital Markets
28.   Donald Kopanz, Deutsche                         72.   Michael Searle, RBC Capital Markets
29.   Tom Magnavita, Deutsche Bank                    73.   Bill Cole, RBS Greenwich Capital
30.   Doug Keyser, Dresdner                           74.   Alexander Bruk, SG
31.   Nick Waterson, Dresdner Kleinwort               75.   Victor Lengella, Societe General
32.   Margaret Koontz, DTCC                           76.   Michael Walsh, Societe General
33.   Greg McConnell, Equilend                        77.   Brian McLoone, State Street
34.   Dave Perlzweig, FCC                             78.   Jeff Mailman, State Street
35.   Bill Cousins, FIMAT                             79.   Keith Yokoyama, Sumitomo
36.   Art Carr, Fimat                                 80.   Scott Wellington, Sungard
37.   Tom Fan, First Clearing                         81.   Will Martinez, US Bank
38.   Calvin Inge, First Clearing                     82.   Colleen McElwee, Vanguard
39.   John Tew, Frost Bank                            83.   Imelda Carandang, Vanguard
40.   Susan Kuller, Goldman Sachs                     84.   Alan Maxwell, Wachovia
41.   Peter Lasaga, Goldman Sachs                     85.   Teresa Shorter, Wachovia
42.   Linda Spiewha, Greenwich Capital                86.   Laurissa Alhstrand, Wells Fargo
43.   Alden McClelland, GS                            87.   Kate Kuras, Paloma Securities
44.   Becky Freyer, HBK Global




                                                                                                  37
Agency Lending Disclosure Taskforce




Summary:

1. Announcements

   Group C parallel testing ends tomorrow, Sept 13, with the last files being transferred
    tonight.
   All agent lenders and broker-dealers are being encouraged to begin sending daily
    production data either through the production or test environment after Sept. 13th.
            o Counterparties should coordinate bilaterally on how they are sending
                production data, either through test or production
            o Processing will match the correct files only if both parties are sending
                their data in the same environment
   The ALD website contains the phase II testing and production readiness matrix
    (under the testing working group documents section).
            o Broker-dealers should coordinate their efforts based on the expected dates
                of agents lenders moving to daily production, and
            o Agent lenders looking for validation of production processing should
                check with broker-dealers based on the counterparty’s planned production
                date
            o Broker-dealers sending their own files to SunGard through test and
                receiving agent lender files in production will not see clean report. Data
                cannot be compared across systems. Both sides have to be sending data
                through the same system in order for a report to show both the “we know”
                and the “they know” side of the transactions.

   Based on current readiness information, 36 broker-dealers and 25 agent lenders firms
    will be in production by Monday, Sept. 18th.
   Producing the credit survey results is almost finished. Capco needed to follow up
    with key firms to get complete data required to produce accurate results. This will
    probably be the last credit survey since new principals and principals being deleted
    are now being mixed into the survey results.
   All new principals should be added through the ALD process. Re-approval of
    existing principals should complete by October 1.
    Broker-dealers must decide on their course of action regarding outstanding loans
    from unapproved principals after the ALD deadline and should notify their agent-
    lenders.

2. Vendor update
 EquiLend
          o Some issues were identified last week exchanging files with DTCC. The
             firms are working on new error codes and timing to deal with the problem.
             DTCC believes this issue will only occur in test but is preparing for it in
             production also.
          o User alerts and e-mail notification to support nightly processing continue
             to be tested and enhanced


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Agency Lending Disclosure Taskforce


            o The escalation process rules are being developed
            o User interface changes are also being validated
            o Next weekend there will be a production push which will include new
              resend functionalities

   DTCC
            o Data transmission issues experienced last week with EquiLend should
              only occur in the test environment
            o New error codes have been added by DTCC to identify files coming in too
              fast and alert the sender

   SunGard Update
          o All files received today in the test environment have been processed on
             schedule and no backlog exists
          o Reconciliation and capital reports were successfully produced
          o All reports will begin running in production on Wednesday morning, Sept
             13th based on data received from agent lenders and broker-dealers in the
             production environment
          o Customer support continues to work on individual issues with clients
          o Both environments will still be open for testing
          o The fix for removing the validation on settlement date is being tested in
             QA today and will be pushed to production tomorrow

3. Questions

   An agent lender asked if inquiries or notices regarding no file transmissions could
    come from multiple sources for the same file.
           o Yes, situations exist where notices may be received from both vendors or
                a vendor and a broker-dealer for the same missing file.
           o The escalation process is being reviewed.
   A series of questions was directed to SunGard:
     Will 8 digit tax ID numbers be rejected?
           o Yes 8 digit tax ID numbers will be rejected. A 9 digit tax ID is required.
           o The rejection will show up on the hub log.
     When will the settlement date check be removed from the reconciliation matching
       criteria?
           o Change is currently in testing and should be moved to production on
                Wednesday.
     Will files received before 8:00PM for the next business day be rejected?
           o Processing depends on when SunGard performs its date roll. The date roll
                occurs between 6 PM and 8PM EST.
           o If the next day files are received before the system date rolls then they will
                be rejected.
           o If current day files are received after the date rolls then they will also be
                rejected.



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Agency Lending Disclosure Taskforce


       If un-priced securities need to be updated after the 8 AM capital report run, will
        the next run at 12 PM run give the capital group enough time to evaluate results
        and effect cures?
             o The process currently runs at 8 AM and 12 PM for testing.
             o The timing will be adjusted with experience in production and may differ
                 from the current schedule in testing
       If files a broker-dealer sets up expected files in the management application as
        optional, how will they be processed?
             o Processing will be triggered when the broker-dealer and agent lender
                 submit their files.
             o If only the agent lender or broker-dealer submits files then the process will
                 wait until the matching counterparty information is received without
                 producing any late file notification.
             o If both parties do not submit files then the reconciliation (one sided) will
                 be triggered at 4:00 PM.




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Agency Lending Disclosure Taskforce




Testing Working Group Meeting Summary, Tuesday, September 19, 2006


Participants:
                                                    41.   Susan Cullar, Goldman Sachs
    1.    Mr. Blair Wolk, Abbey                     42.   LInda Spewack, Greenwich Capital
    2.    Josh Neto, Abbey National                 43.   Melanie Wexler, ING
    3.    Kevin Galvin et. al., ABN AMRO            44.   Anna Havard, ING
    4.    Anisa Butash, AIG                         45.   William Tam, Investors Bank & Trust
    5.    Hiromi Otsuaka, Banca IMI Securities      46.   Tim Hulme, Investor's Bank & Trust
    6.    Casey Barton, Barclays                    47.   Patrica Daly, IXIS Capital Markets
    7.    Doug Fithian, Barclays Global Investors   48.   Mary Alabar, J.P. Morgan
    8.    Pierce McDowell, BBH                      49.   Frank Pedreira, JP Morgan
    9.    Zakhar Suleymanov, Bear Stearns           50.   Meghan Conaty, JP Morgan
    10.   Charles DiVuolo, Bear Stearns             51.   Donna Jacobs, Key Bank
    11.   Johanna Martinez, Bear Stearns            52.   Steve Kenney, M&I Bank
    12.   Lynn Mackey, BMO Capital Markets          53.   Mira Pardanani, Merrill Lynch
    13.   Jim Pasqualoni, Boston Global             54.   May Moy, Met Life
          Advisors                                  55.   Michael Bluez, MetLife
    14.   Paul Armstrong, Brown Brothers            56.   Jim Jenkinson, Mizuho Securities
          Harriman                                  57.   Xavier Kunukkasseril, Morgan Stanley
    15.   C/Mariana Kind, Capco                     58.   Sanjay Patankar, National Financial
    16.   Steven Bies, CIBC                               Services
    17.   Victor Lopez, CIBC                        59.   Bill O'Meara, Northern Trust
    18.   Erica Granger, Citadel Investment         60.   Kate Kuras, Paloma Securities
          Group                                     61.   Summer Hinton, Paloma Securities
    19.   Tom O'Keefe, Credit Suisse                62.   Amy Werkheiser, Pershing
    20.   Suresh Kabakam, Credit Suisse             63.   Larry O'Goost, PFC Trust
    21.   Constantine Khodik, Credit Suisse         64.   Michael Searle, RBC Capital Markets
    22.   Mr. Abbas Gilani, CSFB                    65.   Jane Taladino, RBC Capital Markets
    23.   Donald Copans, Deutsche Bank              66.   Mr. Jamie Lebowski, RBC Dain
    24.   Francis So, Dresdner                      67.   Bill Cole, RBS Greenwich Capital
    25.   David How, Dresdner                       68.   Larry Patrizio, Sanford Bernstein
    26.   Nick Waterson, Dresdner Kleinwort         69.   Kelly Ediz, State Street
          Wasserstein                               70.   Nancy Daly, Sumitomo Trust
    27.   David Moss, Dresdner Kleinwort            71.   Scott Wellington, SunGard
          Wasserstein                               72.   Bhushan Kulkarnin, UBS
    28.   Doug Keyser, Dresdner Kleinwort           73.   Amy Marks, UBS Securities
          Wasserstein                               74.   Will Martinez, US Bank
    29.   Margaret Koontz, DTCC                     75.   Colleen McElwee, Vanguard
    30.   Greg McConnell, EquiLend                  76.   Mr. Gentry van Glick, V-Net
    31.   Monica Krzyszczyk, Fimat                  77.   Stephen Smith, Wachovia
    32.   Brandon Bovey, Fimat                      78.   Patti Rice, Wachovia
    33.   Bill Cousins, FIMAT USA                   79.   Laurissa Alstrand, Wells Fargo
    34.   Calvin Inge, First Clearing
    35.   Tom Fan, First Clearing
    36.   Bernie DeJulio, First Clearing
    37.   Joe Bruno, Fortis Securities
    38.   John Tew, Frost Bank
    39.   Les Nelson, Goldman Sachs
    40.   Alden McLellan, Goldman Sachs



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Agency Lending Disclosure Taskforce




Summary:

1. Announcements

   The testing group was reminded that if any firms have created a group email contact
    list for production that they can send to Capco and they will update the current ALD
    contact sheet. Besides sending these lists to Capco firms should forward these to their
    counterparties as well
   Currently there are 9-firms that have sent in contact details for production and beyond
    and an updated contact list has been added to the ALD website
   The production readiness table has also been updated on the ALD website so firms
    can observe which day their counterparties will be switching over into a production
    environment. Firms are encouraged to move into production this week as well as
    taking a more production processing approach
   Monday, September 18th many firms have made the move into production and from a
    volume standpoint vendors are seeing these increases
   The daily 4pmET production prep calls will continue to the end of this week and
    perhaps longer if they are necessary. These calls continue to bring attention to the
    group any issues or concerns that are discovered during daily testing.
   This call is open to any firm that feels they need to attend


2. No-Action Letter
 Last Friday, September 15th the latest DRAFT version of the No-Action letter was
    finally ready for distribution and was posted to the ALD website. Even though this
    version does not have final approval it was ready to be distributed to the ALD
    community containing important disclosures
 A final version should be set forth as soon as today following some conversation
    between market regulation, Mike Macchiaroli , outside council and other higher-ups

3. Testing and Vendor update
 DTCC
           o There have been no issues or problems communicated by DTCC
           o Regarding a recent NDN transmission problem in the test environment,
              this is still being followed up on. There have been though no other
              reported problems since last weeks occurrence in test
           o DTCC is also unable to provide a numeric amount of files that they are
              seeing in the production environment. DTCC was only able to confirm
              that they have seen an increase in volume
 EquiLend
           o Are still ironing out a few relationship issues and are working on their
              escalation procedures
           o A production push is set for this weekend where several alerts and
              notifications will be added. There have also been some browser
              functionality additions such as a reset tool that will be new


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Agency Lending Disclosure Taskforce


            o EquiLend has no system set up to monitor the amount of files that are
              being processed but is going to be creating some sort of monitor to count
              the amount of files being processed. This should be fairly simple and will
              be addressed ASAP

   SunGard
          o SunGard has been able to figure there have been about 950,000 files
            processed in production and about 725,000 files coming through test based
            on last nights / early morning processing. These number include both daily
            and incremental files
          o From a timing standpoint over 80%-90+% have been sent in before 3am
          o During Group C, the greatest amount of files that were processed in a day
            was 1.6 million files
          o SunGard will be planning on breaking down the amount of files that are
            recorded in the hourly batches in order to provide further statistics
          o There is also some security validation logic that has been added that
            should greatly reduce the number of invalid asset id’s that show on the
            reconciliation reports and this should be effective now
          o SunGard and EquiLend will communicate with each other to figure the
            amount of time it takes to pass a file from an end-to-end basis based on
            their different relationships. This will be figured out this week.

3. Questions

   Sumitomo Trust & Banking Co. (USA) told the group that they did not send out a file
    in production last night because of some internal problems. They were also unable to
    send out any Master Files. Sumitomo hopes to have this production issue fixed today

   UBS Securities posed the question on what will be the approach for a new lender or
    borrower that will be entering this business in post production. Besides taking the
    necessary steps and approving principals what will be the extent of testing that can be
    completed between a new firm and its counterparty in addition to their vendors in a
    test environment? SunGard (ALDOP) and EquiLend will continue to have their
    testing environments up and running for new users but there will be some limitations
   There will have to be some additional discussion on this topic and some
    documentation stating expectations and limitations by the vendors of what processes /
    scenarios they will be able provide when a new firm joins ALD needs to be set




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Agency Lending Disclosure Taskforce




Testing Working Group Meeting Summary, Tuesday, September 26, 2006

Participants:
    1.    Josh Neto, Abbey National              46. Charles Presho, Investors Bank and
    2.    Blair Wolke, Abbey National                Trust
    3.    Bernie Yannotti, ABN Amro              47. Patricia Daly, IXIS Capital Markets
    4.    Ignacio Ammendola, ABN Amro            48. Meghan Conaty, JP Morgan
    5.    Rob Racaniello, ABN Amro               49. Frank Pedreira, JP Morgan
    6.    Maria Cadorniga, Bank of Tokyo         50. Bruce Elliott, JP Morgan Chase
          Mitsubishi USJ                         51. Donna Jacobs, Key Bank
    7.    Patricia Walsh, Barclay's Capital      52. Charys Yang, Lehman Bros.
    8.    Doug Fithian, Barclay's Global         53. Patrick Hannon, M&I
          Investors                              54. Steve Kenney, M&I Bank
    9.    Zakhar Suleymanov, Bear Stearns        55. Gil Esquivel, Merrill Lynch
    10.   Jeremy Kaber, BMO Capital Markets      56. Chris Daskalikas, Merrill Lynch
    11.   Theresa Auw, BNP Paribas               57. Mr. Chris Torre, Merrill Lynch
    12.   Joanna Baruc, BNP Paribas              58. Meera Pardanani, Merrill Lynch
    13.   Michael Mulvhill, BNP Paribas          59. Jim Jenkinson, Mizuho Securities
    14.   Pierce McDowell, Brown Bros.           60. Mary Jo Graffeo, Morgan Stanley
    15.   Linda Leary, Brown Brothers Harriman   61. Sanjay Patankar, National Financial
    16.   Paul Armstrong, Brown Brothers             Services
          Harriman                               62. Judy Berschadsky, Nomura Securities
    17.   Tom Wagner , Capco                     63. Bill O'Meara, Northern Trust
    18.   Victor Lopez, CIBC                     64. Kate Kuras, Paloma Securities
    19.   Steven Bies, CIBC                      65. Irving Klubeck, Pershing
    20.   Sherry Evans, CIBC                     66. Amy Werkheiser, Pershing LLC
    21.   John Giardina, Citigroup               67. Christina Royer, PFPC Trust
    22.   Ann Klein, Citigroup                   68. Steve Bartalo, Raymond James
    23.   Richard Davis, Citigroup               69. Michael Searle, RBC Capital Markets
    24.   Abbas Gilani, Credit Suisse            70. Jane Palomino, RBC Capital Markets
    25.   Desi Aldenese, Credit Suisse           71. Jaime Lebowsky, RBC Dan Rauscher
    26.   Suresh Jacakam, Credit Suisse          72. Linda Spiewak, RBS Greenwich Capital
    27.   Constantine Kodis, CSFB                73. Bill Cole, RBS Greenwich Capital
    28.   Donald Copans, Deutsche Bank           74. Larry Petrizio, Sanford Bernstein
    29.   Doug Keyser, Dresdner                  75. Brian McLoone, State Street
    30.   Nick Waterson, Dresdner Kleinwort      76. Kelly Ediz, State Street
    31.   Margaret Koontz, DTCC                  77. Nancy Bailey, Sumitomo Trust
    32.   Greg McConnell, EquiLend               78. John Grimaldi, SunGard
    33.   Monica Krzyszczyk, Fimat               79. Emecka Agwu, Timber Hill LLC
    34.   Art Carr, Fimat                        80. Amy Marks, UBS
    35.   Tom Fan, First Clearing                81. Bhushan Kulkarni, UBS
    36.   Bernie Digiulio, First Clearing        82. Will Martinez, US Bank
    37.   Joe Bruno, Fortis Securities           83. Imelda Carandang, Vanguard Group
    38.   John Tew, Frost Bank                   84. Laurissa Ahlstrand, Wells Fargo
    39.   Susan Kuller, Goldman Sachs
    40.   Alden McLellan, Goldman Sachs
    41.   Becky Frayer, HBK Global
    42.   Anna Havard, ING
    43.   Melanie Wexler, ING
    44.   William Tam, Investors Bank & Trust
    45.   Tim Hulme, Investors' Bank & Trust



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Agency Lending Disclosure Taskforce


Summary:

1. Announcements
 The testing group was reminded that the ALD website has been updated with a few
    additional firms’ contacts. Capco is receiving calls looking for production and
    escalation contact information we haven’t had too many firms send in their contacts
 If firms have not sent in anything to be posted to the Capco website they should at
    least be sending their counterparties their contact lists
 EquiLend and SunGard have been monitoring the amount of time it takes for a file to
    be received and sent in an end to end process
 Currently it takes about 70-75 minutes for a file to be received by SunGard from
    EquiLend and approximately 15 minutes from SunGard to EquiLend.
 The 70-75 minutes timing does not reflect the production push that EquiLend put in
    over the weekend. This time should be much shorter but since no files were received
    after the production push these times were pre-prod push
 Last week an email was distributed and again today for firms to confirm which
    vendor platform they are using. As of this morning there were 2-agent lenders and 9
    broker-dealers that we were still awaiting response
 Once all these have been confirmed the complete list will be added to the ALD
    website

2. No-Action Letter
 Yesterday there was a No-Action letter call to discuss a few raised questions and
    some language around this letter.
 As a result from this meeting it was agreed upon that footnotes 9 and 15 should be
    amended
 A question was brought up about the relevance and application of the Customer
    Protection rule, 15c3-3, which is found in Part III, section 3 of the No-Action Letter
    draft. The discussion concluded that the rule was applicable, the calculation would be
    performed at the agent lender level and a provision should be made to apply a credit
    to principal level calculation related to ALD if the agent lender is under
    collateralized.


3. Testing and Vendor update
 DTCC / EquiLend
           o EquiLend experienced another contention problem while attempting to
              retrieve files. The process was automatically retried and was successful.
           o There was a file contention error with Citibank (BD) when trying to pick
              up files at 3 AM. At 4 AM the process ran fine.
           o Citibank (BD) was looking for some more information but DTCC /
              EquiLend could not provide any further details
           o DTCC & EquiLend will follow up on this and hope to have an update on
              the 4 PM call




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Agency Lending Disclosure Taskforce


   EquiLend
          o Several hundred files containing a total of about 2 million records were
             successfully processed.
          o EquiLend is initiating processes to retrieve and send files once every: 10
             minutes
          o EquiLend is working on identifying the cause and resolving the contention
             problem with DTCC.
          o The contention problem is not causing any significant delay since the
             retrieval is immediately retried.
          o SunGard and EquiLend have been working on developing statistics and
             timing for files exchanges.
          o A production implementation was completed last weekend to increase
             performance and speed up file transfer.
   SunGard
          o SunGard experienced an issue where a job was kicked off late. This had to
             due with their reporting functionality, but this was quickly noticed and
             then fixed. It did not present any delays or reporting issues
          o File processing continues to receive about 2 million records a night and
             the file delivery process of sending in files continues to improve
          o Additional on-line screens have been rolled out to enhance processing.


3. Questions
Pershing, LLC
 There was some concern regarding the “Customer Protection Rule” and a request for
    explanation of the determination from the no action letter discussion. This question
    could not be satisfactorily answered among the testing call participants.

Key Bank
 Key Bank told the group that some enhancements were added to their system and
   wanted to confirm with three of their broker-dealers, JP Morgan Securities, Citibank,
   and Goldman Sachs that these enhancements / fixes were incorporated in their
   production files
 These three firms will look to confirm this and discuss bilaterally any issue


4. Production: Feelings and Thoughts
 It was brought to the group’s attention with three days left before the “Go-Live” date:
    based on the amount of testing that has been completed, the issues at hand and the
    uncertainty of how things will play out, how comfortable are firms as they approach
    October 2nd?
 The answers to this question were mixed varying between just being comfortable,
    looking for another month, not 100% confident based on not completing enough
    testing




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Agency Lending Disclosure Taskforce


   There are still concerns with existing principals, continuing issues with the non-cash
    collateral file, escalation procedures and concerns with the collateral allocation
    process
   It was expressed that the quality of data and the loan files, and the processing of files
    has been much improved
   SunGard mentioned that the testing process has come a long was over the last 30-40
    days, that the data quality has been better. They are still working through issues and
    answering questions daily. Firms have been sending in production and escalation
    contacts to their operations group which will begin calling on Thursday, 9/28 those
    firms which are having problems with their files.
   Addressing problems in a non-live environment would allow proper time to evaluate
    the issue in detail and take the necessary steps that all avenues have been covered.
    Dealing with an issue or error in a live- real-time environment will be in a fire-drill
    mode. It is felt that solving some problem will take more than a day especially if they
    make it to the trading desk. With each day that goes by additional documentation will
    need to be captured to keep a proper audit trail(s)
   An agent lender expressed concern that broker-dealers may begin to return loans if
    problems can not be fixed fast enough.




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