Service Level Agreement for Banks - DOC

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					                                                         SERVICE LEVEL AGREEMENT



                     Service Level Agreement
3
I.     Overview


         Statement of Intent

                      This Investment Advisor and Custodian Bank have agreed to use
                      ISITC standards. This Service Level Agreement (SLA) establishes
                      service standards and a means for resolving issues, as well as a
                      process by which the standards can be measured and monitored.


         Statement of Responsibilities

                      The Custodian Bank provides services as defined in the ISITC User
                      Guide, measures performance against standards, and corrects
                      variances.

                      The Investment Advisor complies with the responsibilities as
                      described in the ISITC User Guide and corrects variances.


         Service Level Indicators/Service Level Measurement Process

                      The Custodian Bank maintains an Activity Log, as mutually agreed
                      to with the Advisor. This Log will be used as a mechanism to review
                      adherence to standards, and to indicate the need for corrective action.
                      A sample Activity Log is presented in the Attachment.


         Standards Amendment/SLA Amendment Process

                      The Custodian Bank and Investment Advisor mutually agree to
                      amend the Service Level Agreement, as may be necessary to
                      accommodate new instruments, data delivery of reconciliation
                      messages from the Custodian to the Advisor, changes in operational
                      procedures, or any other item deemed to impact this agreement.




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Service Level Agreement



II. Custodian Responsibilities


         Operating Hours

                          The Custodian Bank agrees to be able to receive transmissions ___
                          hours per day/__days per week.

                          The Advisor File can be transmitted up to Midnight Custodian Time
                          for incorporation into the Custodian's Core System Processing Cycle.

                          It is the responsibility of the Custodian to inform the Advisor no later
                          than by 9 A.M. Custodian Time, next day, or another time as
                          mutually agreed to by the Advisor and Custodian, as to the status of
                          processing. The method of communication (FAX, Phone, or
                          Electronic) should be mutually agreed to by the Custodian and
                          Advisor prior to implementation. Custodian acknowledgment to
                          vendors must be provided electronically within one hour of
                          transmission receipt.


         Hardware/Software Changes

                          Notification of any hardware and/or software changes that may effect
                          the delivery, receipt, and processing of files to/from the Investment
                          Advisor and/or Custodian Bank will be made in writing at least 30
                          days in advance. The advisor and bank will mutually determine
                          whether a joint testing effort will be required. Examples of types of
                          changes which could impact ISITC processing, include, but are not
                          limited to, changes in Operating System, Application Software,
                          Communications Environment.


         Holiday Scheduling

                          Statement from Bank and IM determining Holiday schedule




         Testing Requirements

                          The Advisor and Bank should develop a mutually-acceptable test
                          sample and test plan prior to implementation. This plan will govern
                          the testing and acceptance process prior to the implementation of new


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                                                      SERVICE LEVEL AGREEMENT


                   formats (Transactions and Reconciliation), as well as whenever
                   system changes are mutually deemed to have an impact on ISITC
                   processing already in place.

                   The ISITC User Guide contains guidelines for testing and
                   implementation.


       Advisor and Custody Bank Contact Sheet

                   The Advisor and Custodian should prepare a Contact Sheet prior to
                   implementation. It is the responsibility of each party to keep the
                   contact sheet current.

                   An example of a contact sheet is attached.


       File Processing

                   The Custodian should process the ISITC transmission received from
                   the Advisor in accordance with the ISITC User Guide. File validation
                   and error-handling, including the handling of invalid files,
                   transmission errors, duplicate or out-of-sequence transmissions,
                   syntactical and structural record errors, etc. are described within the
                   guide.

                   If the Custodian receives more than one file (batch) within a single
                   transmission, each batch will be treated independently from any
                   other.

                   If the Custodian receives a transmission after an End-of Day file has
                   been received, this latter file (s) will be rejected as an invalid
                   transmission, unless the Advisor pre-notifies the Custodian to expect
                   a transmission after the End-of Day transmission.

                   If the Custodian has not received an End-of-Day file by midnight
                   Custodian time, the Custodian must notify the Advisor by no later
                   than 9 A.M Custodian time, next day,


       DTC Eligible Processing

                   The Advisor agrees to continue the affirmation process for items
                   which settle at DTC, as governed by the DTC Standard Letter of
                   Agreement.




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                          It is the responsibility of the Custodian to insure that ID affirmations
                          are correctly matched against the ISITC message to preclude the
                          creation of duplicate transactions on the Custodian's processing
                          system.


         DTC-Ineligible Processing

                          In the event the Advisor affirms DTC-ineligible transactions, the
                          Custodian is to accept the ISITC transaction as the authorized
                          transaction. However, the Custodian is responsible to screen for
                          duplicates.




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                                                      SERVICE LEVEL AGREEMENT



III. Advisor Responsibilities


       Operating Hours

                   The Advisor agrees to generate at least one file each calendar day,
                   even on holidays, since an Advisor holiday may not coincide with a
                   Custodian holiday.

                   The last file from the Advisor is due into the Custodian Bank no later
                   than by midnight, Custodian Time.


       Hardware/Software changes

                   Notification of any hardware and/or software changes that may effect
                   the delivery, receipt, and processing of messages to/from the
                   Investment Advisor and/or Custodian Bank will be made in writing at
                   least 30 days in advance. The advisor and bank will mutually
                   determine whether a joint testing effort will be required.

                   Examples of types of changes which could impact ISITC processing,
                   include, but are not limited to, changes in Operating System,
                   Application Software, Communications Environment.


       Holiday Scheduling

                   Determine by Bank and IM


       Testing Requirements

                   The Advisor and Bank should develop a mutually-acceptable test
                   sample and test plan prior to implementation. This plan will govern
                   the testing and acceptance process prior to the implementation of new
                   formats (Transactions and Reconciliation), as well as whenever
                   system changes are mutually-deemed to have an impact on ISITC
                   processing already in place.

                   The ISITC User Guide contains guidelines for testing and
                   implementation.




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Service Level Agreement


         Advisor and Custody Bank Contact Sheet

                          The Advisor and Custodian should prepare a Contact Sheet prior to
                          implementation. It is the responsibility of each party to keep the
                          contact sheet current.

                          An example of a contact sheet is attached.


         File Processing

                          The Advisor must, at minimum, send a Null File, as defined in the
                          ISITC User Guide, if no other transactions are to be transmitted
                          within any given day.

                          The last file of the day (which could be the null file) must indicate
                          this fact as per the ISITC User Guide.

                          All transactions included on the ISITC messages are considered to be
                          authorized by the Advisor as soon as the messagesis released to the
                          Custodian, with the exception of items affirmed directly through the
                          DTC (See DTC-eligible processing below).


         DTC Eligible Processing

                          The Advisor agrees to continue the affirmation process for those
                          transactions which settle at DTC and operate under a DTC Standard
                          Letter of Agreement. These affirmations will take precedence over
                          the ISITC record for eligible trades.

                          It is the responsibility of the Advisor to insure that trade corrections
                          are processed on a timely basis so that affirmations will have a
                          matching ISITC record on the file.

                          The Advisor and Custodian should agree to one of two procedures for
                          the matching of Affirmations to ISITC transactions: either a
                          tolerance will be agreed to so that the Custodian can "match with
                          tolerance"; or an exact match will be required. In the latter instance,
                          the Advisor will be required to correct the transaction in error.

                          The Advisor and Custodian need to agree on the list of eligible items
                          prior to production.




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                                                      SERVICE LEVEL AGREEMENT


       DTC-Ineligible Transactions

                   DTC-ineligible transactions are authorized by the Advisor upon
                   release of the ISITC message. The Advisor is responsible for
                   processing any corrections and cancellations on a timely basis. In the
                   event that the Advisor affirms DTC-ineligible transactions, the ISITC
                   record will take precedence.




       Cancellation Processing

                   The Advisor agrees to cancel and resubmit any and all incorrect
                   transactions, adhering to the format for a cancellation as described in
                   the ISITC User Guide.

                   In the event that the Advisor can not cancel and resubmit the correct
                   trade by T + 1 is this still true (or by Settlement Date minus 2, except
                   for TBA allocations), the Advisor is responsible for alerting the
                   Custodian to the error and for correcting the transaction via mutually-
                   agreed to alternate means (telephone or fax), in time for the
                   Custodian to meet settlement deadlines.




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Service Level Agreement



IV.   Continuity of Business

                          In the event of a hardware, software, or other operational problem on
                          either the Custodian's site, Advisor's site, or Vendor's site, it is the
                          responsibility of the effected party to notify the contra-party and to
                          agree to alternate methods of communication, as mutually-agreed to
                          prior to live implementation.

                          As part of the test process (refer to the ISITC User Guide), the
                          contingent mode of communication (e.g., FAX) should be tested prior
                          to implementation.

                          When both parties agree that the problem has been resolved,
                          reversion to the primary method of communication can occur.

                          The parties to be notified are documented in the Contact Sheet.


          Sample Daily Activity Log

            Today's Date: MM/DD/YY                                Time of Receipt: HH:MM:SS

            Batch Sequence Number:

            Header Contents

            Trailer Contents

            Time Processed:        Front-end Edits:        HH:MM:SS:

                                   Core System:            HH:MM:SS:

            Processing Status:



            Date and Time of Notification to Advisor:




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                                                                            SERVICE LEVEL AGREEMENT

          INDUSTRY STANDARDIZATION FOR INSTITUTIONAL TRADE COMMUNICATION
                             PARTICIPANT QUESTIONNAIRE


This questionnaire should be completed by all current or new participants in the ISITC initiative and forwarded to the
ISITC Product Management Committee. All changes must be provided in writing and adequately tested according to
the Service Level Agreement (SLA), prior to implementation.

Participant Institution Name
Address 1
Address 2
ISITC Member Name
(Business)
Phone Number
Fax Number
Technical Contact Name
(Applications)
Phone Number
Fax Number
Communications Contact Name
(Comm.)
Phone Number
Fax Number
Effective Date


Briefly describe your computer environment.




                                              System used for ETD

             QUESTIONS                           MAINFRAME                       PC                    OTHER
Processing Hardware (Name and Model)
Modem Brand
Modem Speed
Modem Type
Modem Compression
Line Type (Leased or Dial Up)




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Service Level Agreement


              QUESTIONS                    MAINFRAME            PC             OTHER
Protocol
SNA
Asynch
Bysnch
RJE
NDM
NJE
TRACS
SuperTracs
S.W.I.F.T.



                                        Sender Information


             QUESTIONS                     MAINFRAME            PC             OTHER
Expected Frequency of Transmission
        Multiple Times
        Once a Day
Estimated Time of Transmission(s)



                                         Other Information


Confirmation Notification:

                               None   Dial Out     Fax       Phone   Dial In      Other
Bank to Manager
Manager to Vendor
Bank to Vendor



Vendor Information:

Is a Vendor Used Y/N
Vendor Name
Service Provided
         File Formatting
         File Transfer
Broker Delivery Instructions
Other (describe)




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                                                                 SERVICE LEVEL AGREEMENT


When will you be ready to receive or send transmissions in the current ISITC format?




List all areas in which your file format or process does not conform to current ISITC
specifications and the estimated compliance date.


                              ITEM                                  COMPLIANCE DATE
File Acknowledgment
Required Tags (list, attach additional sheet if needed)




Required Code Words (list, attach additional sheets if needed)




Other




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                                            Eligible Products


Indicate all products that you are able to send or receive in the currently approved 521 and 523 formats.
Items in parenthesis have not been finalized by the ISITC.

        Equities                                                (Equity Options)
        Corporate Bonds                                           (Futures Options)
        Municipal Bonds                                           (Fixed Income Options-OTC)
        US Treasury Bonds & Notes                                 (Financial Futures)
        US Treasury Bills                                         Standard Repo
        Treasury Strips-IO's/PO's                                 (Non-Standard Repo)
        Corporate Bonds                                           (FOREX-Spot)
        GNMA agency pools                                         (FOREX-Forward
        FNMA agency pools                                         (Foreign Bond)
        FHLMC agency pools                                        (Foreign Equity-Euroclear & Cedel)
        FHA Project Loans                                         Turnaround
        CMO and ABS, IO, PO, IOette                               (Eurodollar Bonds)
        Mortgage Private Placement                                (Futures Collateral)
        Pair-off                                                  (Mutual Funds)
        Certificate of Deposit                                    (Options Collateral)
        Bankers Acceptance                                        Cancellations (592)
        Commercial Paper                                          TBA




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                                                                               SERVICE LEVEL AGREEMENT

                                          RELEASES/COMPLIANCE


Inherent in the topics of software releases and compliance with the stated release schedule is the responsibility of all
parties to agree to the operating rules. This document delineates the rules and attempts to address the concerns of all
parties within those rules.


TRADE NOTIFICATION COMPLIANCE

CASE 1:       The investment manager or vendor has made the necessary changes to meet an agreed upon release date,
but the custodian bank has NOT made the changes necessary to systematically process this information within their
applications by the stated release date. In this situation, it is the bank’s responsibility, by the stated release date, to
systematically receive this information such that the investment manager or vendor does NOT have to make
exceptions to the standard for any given bank. This means that the bank must receive all data transmitted by the
sender, but must separate out the transactions that they can process automatically versus those that they must process
manually.

CASE 2:       The custodian bank has made the necessary changes to meet an agreed upon release date, but the
investment manager or vendor is NOT able to make the changes necessary to systematically create and transmit
transactions according to the stated release of the standard. In this case, it is the manager or vendor’s responsibility,
by the stated release date, to transmit ONLY those transactions that adhere to the standard, and provide manual
(phone, fax, etc.) notification for those items that do NOT adhere to the standard.

CASE 3:       The investment manager or vendor has made the agreed upon changes PRIOR to the stated release date,
but the bank is not yet ready to systematically process this information. Until the stated release date the sender must
transmit either these items as “Confirm Only” using the /ACON/ tag, or Fax. See Case 1 for how this situation is
handled after the stated release date.

CASE 4:       The investment manager or vendor has made the agreed upon changes PRIOR to the stated release date,
and one or more banks are ready to systematically receive and process these transaction. The sender may transmit
“pre-release” transactions to those banks ready to process them. However, it is the sender’s responsibility to transmit
these “pre-release” items either as “Confirm Only” using the /ACON/ tag, or Fax, to those banks not ready to process
them. If the sender cannot segregate their transactions, between those banks that are ready to receive the “pre-
release” items, and those that aren’t, then the sender must wait until the stated release date to transmit these items.
See Case 1 for how this situation is handled after the stated release date.




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Service Level Agreement


RECONCILIATION COMPLIANCE

CASE 1:        The custodian bank has made the necessary changes to meet an agreed upon release date, but the
investment manager or vendor has NOT made the changes necessary to systematically process this information within
their applications by the stated release date. In this situation, it is the manager’s or vendor’s responsibility, by the
stated release date, to systematically receive this information such that the custodian bank does NOT have to make
exceptions to the standard for any given manager or vendor.

CASE 2:        The investment manager or vendor has made the necessary changes to meet an agreed upon release date,
but the custodian bank is NOT able to make the changes necessary to systematically create and transmit all
reconciliation messages according to the stated release of the standard. In this case, it is the bank’s responsibility, by
the stated release date, to transmit ONLY those reconciliation messages that adhere to the standard, and provide
manual (hard-copy, manager dial-in, etc.) notification for those items that do NOT adhere to the standard.

CASE 3:       The custodian bank has made the agreed upon changes PRIOR to the stated release date, but the
investment manager or vendor is not yet ready to systematically process this information. Until the stated release date
the bank must provide reconciliation via the current manual method (hard-copy, manager dial-in, etc.). See Case 1
for how this situation is handled after the stated release date.

CASE 4:       The custodian bank has made the agreed upon changes PRIOR to the stated release date, and one or
more investment managers or vendors are ready to systematically receive and process these transactions. The sender
may transmit “pre-release” reconciliation messages to those parties ready to process them. However, it is the sender’s
responsibility to provide reconciliation information via current manual methods to those investment managers or
vendors not ready to process it. If the sender cannot segregate their reconciliation messages, between those managers
or vendors that are ready to receive the “pre-release” items, and those that aren’t, then the sender must wait until the
stated release date to transmit these items. See Case 1 for how this situation is handled after the stated release date.




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