Sample Policies and Procedures Document

Sample Policies & Procedures document with placeholders showing how it was used as a working draft.
[Redacted] Financial Services [Redacted] Policy & Procedural Changes International Fixed Income
DOCUMENT VERSION 3.1 Written by: Virginia Lynch Business Writing Group
[REDACTED] Policy & Procedural Changes International Fixed Income
TABLE OF CONTENTS PREFACE ............................................................................................................................................IV
1. OVERVIEW.........................................................................................................................................1 1.1 TRADE FLOW.....................................................................................................................................1 1.2 DOCUMENT MAINTENANCE.................................................................................................................5 2. PROCESSES AND PROCEDURES (FIXED INCOME EUROCLEAR SETTLEMENTS)........6 2.1 REPORT GENERATION PROCEDURES......................................................................................................6 2.2 EUROCLEAR UNMATCHED DAILY ACTIVITIES........................................................................................11 2.3 CANCELS, CORRECTIONS AND REVERSALS OF TRADES...........................................................................14 2.4 CLEAN-UPS AND EXCEPTIONS.............................................................................................................16 2.5 FAIL MANAGEMENT..........................................................................................................................18 2.6 SETTLEMENT OF NON DOLLAR/CURRENCY TRADES ..............................................................................20 2.8 FUNDING.........................................................................................................................................21 2.9 ACATS.........................................................................................................................................24 2.10 SETTING UP NEW BROKER-DEALER ..................................................................................................25 2.11 DEPOT MOVEMENT.........................................................................................................................25 3. DMS PROCEDURES........................................................................................................................27
4. RECONCILIATIONS.......................................................................................................................31 4.1 DEPOT RECONCILIATION....................................................................................................................31 4.2 NOSTRO RECONCILIATION..................................................................................................................32 4.3 FX WASH ACCOUNT RECONCILIATIONS..............................................................................................33 4.4 SETTLEMENT DAY AND TRADE DATE OMNIBUS RECONCILIATIONS.....................................................33 5. PROCESSES AND PROCEDURES (NON-EUROCLEAR).........................................................36 5.1 LOCAL MARKETS.............................................................................................................................36 APPENDIX A: [REDACTED] CASE PROCEDURES.....................................................................37
APPENDIX B: ADP ACCOUNTS FOR SECURITIES AND CASH...............................................43
DOCUMENT VERSION 3.1
ii
[REDACTED].......................................................................................................................................43
APPENDIX C: ACAT RESPONSIBILITIES AND FLOW.............................................................44
APPENDIX D: TRADE FLOWS FOR NON-USD, [REDACTED] AND PB..................................46
APPENDIX E: GLOSSARY................................................................................................................49
APPENDIX F: TABLE OF FIGURES...............................................................................................51
...............................................................................................................................................................51
iii
Preface
Purpose of this document
This document outlines the processes and procedures to handle clearance and settlement of [REDACTED] Wealth Management Financial Services International Equities products by [REDACTED] Securities LLC Investment Bank.
Conventions Used in the Document Convention

[REDACTED] Double brackets WM only IB only PLACEHOLDER #
Purpose
In the document reworked as a sample for the business writers portfolio, [REDACTED] has been used to replace confidential company-specific information. Used to identify text which must be reviewed in terms of accuracy and completeness [[Example]] Represents Wealth Management. Indicates that the procedure is used for [REDACTED] Financial Services only. Presents Investment Bank. Indicates that the procedure is used for [REDACTED] Securities LLC only. Indicates that the process does not currently exist but is recommended or required. Indicates that process or procedure is still outstanding and requires additional discussion among project group. The number is maintained in the Business Writing Groups master list of open issues for [REDACTED] project. Short name for International Fixed Income Operations.
Intl FI Ops
Document Version Control Version

1.00 2.0 2.01 2.02 2.03
Date Completed
9/12 10/06 10/24 10/28 11/07
Author
Virginia Lynch Virginia Lynch Virginia Lynch Virginia Lynch Virginia Lynch
Update description
Final update for signoff by [REDACTED] as Captain. Updated with close-outs from some placeholders. Updated with write-off account info, Updated after review of SLAs & placeholders with [REDACTED]. Updated with (1) changed procedure for Depot Movement, (2) open issue in Fail Mgmt section on how fails for non-contractual trades are going to be monitored, (3) new screen short for currency funding screen (4) updated trade flow, (5) additional reports. Removed redundant screen for currency funding procedure. Added initial Draft of DMS procedure from [REDACTED]. Updated with changes from 11/16 meeting with [REDACTED]. Updated as result of meeting with [REDACTED]. Removed additional redundant pages after DMS Procedures section. Updated with additional details from Walkthrough. Also included DMS procedure from Intl Equities document so it can be reviewed in context. Updated with changes after meeting with [REDACTED].
2.03.1 2.0.4. 2.0.4.1 2.0.5 2.0.5.1 3.00
11/15 11/16 11/16 11/22 11/23 12/20
Virginia Lynch Virginia Lynch Virginia Lynch Virginia Lynch Virginia Lynch Virginia Lynch
3.1
01/05
Virginia Lynch
Related Documents Document Name

International Trade Processing Business Requirements, Version 1.5
Document Description
BRD for International Equities and Fixed Income. Written by [REDACTED].
iv
Document Name
[REDACTED] International Model International Settlements Euroclear Process & Procedures International Fixed Income Process International Settlements: Automated Clean-up Technical Design Specification [REDACTED] International Fixed Income Euroclear Settlements Process Model, November 200 ACATS Process and Procedure Document.
Document Description
Model for International Equities and Fixed Income. Written by [REDACTED]. Document written by [REDACTED]. Describes current IB procedures. Provided by [REDACTED]. Business requirements and Design specification. Defines and describes many of the applications. Walkthrough for International Fixed Income Settlements group. Describes the current and projected process for handling ACATS. Provided by [REDACTED].
Contact Information
Role
Workstream Captain Workstream Co-Captain SME / International Settlements Process and Controls Analyst SME & Testing Execution and Validation Process Co-ordinator
Name
[REDACTED] [REDACTED] [REDACTED] [REDACTED] Virginia Lynch
Phone Number
[REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED]
1. Overview
This section provides an overview to the document and the [REDACTED] requirement. Purpose of this Document The major focus in this document is the description of new and modified settlement and clearance processes in the [REDACTED] environment to accommodate products for [REDACTED] Financial Services (referred to as WM in this document). Note that settlement processes and procedures for [REDACTED] Securities LLC (referred to as IB in this document) are not changing in the [REDACTED] environment. Since the WM processes are being modelled after IB processes, these processes and procedures will apply to both WM and IB in the [REDACTED] environment. Daily Responsibilities The Euroclear International Settlements Group is primarily responsible for the cost effective and accurate settlement of activity generated by the WM divisions. These responsibilities include: Clearance and settlement of Retail (Fail) Trades, SCOD trades, ACATS and [REDACTED] Cases Identification of pre-settlement discrepancies (i.e.-mismatches, one-sided transactions) Fail Reporting and Execution Funding projections for Currency Trades
1.1 Trade Flow

Trade Flow Diagram [REDACTED]
Figure 1: End to End Trade flow for WM International Euroclear trades
Trade Booking and Feeds for USD Trades

Trade Date:
WM trading desk fills client orders, as follows: Retail and SCOD Trades Prime Broker Trades WM Sales team books all Retail and WM Prime Brokerage books PB trades into SCOD trades into [REDACTED] PBAS EC is indicated in trailer field 2 for EC is indicated in trailer field 2 for Euroclear Settlement Euroclear Settlement [REDACTED] feeds trade details into PBAS feeds trade details into OET OET OET routes trade details through WM P&S to SBD. [REDACTED], on the IB platform, receives trade details from OET. [REDACTED] generates a tag number for the trade. [REDACTED] feeds Euroclear with settlement instructions. Euroclear sends an acknowledgement to Noahs Ark confirming receipt of instructions. For retail trades, [REDACTED] feeds ADP by booking the trade in the Omni account (200-YY500). The FTR/FTD will be created for the trade on SD-1. For SCOD trades, [REDACTED] feeds ADP by booking the trade in the Omni account (200-YY500) and the corresponding client account. COR/COD will be created for the trade on TD (Trade Date). ADP will send an acknowledgement to [REDACTED] confirming receipt of trades. ADP will feed [REDACTED] with the trade details.
Trade Blotters:
PAINE WEBBER [REDACTED] IB Retail & Prime Brokerage Trades 86 blotter SCOD Trades 8Z blotter ACATS blotter Trade Date + 1: 91 blotter 97 blotter AC blotter AC
IB P&S will carry out reconciliation between WM Omni and the IB Omni (200YY500) on TD + 1. IB P&S will distribute a listing of exceptions to WM C&S Support and B Intl FI Ops settlements. IB P&S will book any missing trades into the IB Omni account (200-YY500). IB P&S will notify Intl FI Ops Settlements via email of any manual bookings. Intl FI Ops Settlements will manually instruct trade in Euroclear.
Intl FI Ops Settlements will review the International Omni (200-YY730) to capture any International Fixed Income trades that are settling in the local market. Further discussion/consideration is needed to determine the correct process to rectify trades missing from the WM Omni account. [[PLACEHOLDER # 383]] IB Intl FI Ops will review any RVP/DVP trades in Euclid from our 92980 against our 92770 account. Any RVP/DVP trades instructed to our 92770 account will require investigation by IB Intl FI Ops, as it may be an indication of missing settlement instructions for the intended counterparty. IB Intl FI Ops will review any RVP/DVP trades in Euclid from our 92980 against our 92770 account. Any RVP/DVP trades instructed to our 92770 account will require investigation by IB Intl FI Ops, as it may be an indication of missing settlement instructions for the intended counterparty.
Trade Date + 2
The following process is in place to handle Urgent Unmatched Trades (UNM1) by T+2: Intl FI Ops Settlements group will report urgent unmatched trades (UNM1 status) to relevant WM trade support via an Excel report on a daily basis. Any large trade allegements will be escalated to WM trade support immediately.
Settlement Date
In In
WM Systems: All RETAIL trades will clean up based on contractual settlement. All SCOD trades will clean up in the client account, based on actual settlement. IB Systems: All RETAIL FTR/FTDs will clean up on actual settlement. RETAIL trades will be funded on contractual settlement. All SCOD trades will clean up in the client account on actual settlement. SCOD trades will be funded on contractual settlement.
Settlement Cycles
This is discussed on page 6.
Flow of Settlement Transactions
Retail/Fail Trades: Trade settles in E/C [REDACTED] retrieves settled trade data from Euclid [REDACTED] feeds settled trades into ADP ADP cleans up the FTR/FTD in the OMNI account [REDACTED] pulls the settled trade data from ADP (BPSA) DVP/SCOD Trades: Trade settles in E/C [REDACTED] retrieves settled trade data from Euclid [REDACTED] feeds settled trades into ADP ADP cleans up the trade in the corresponding client account [REDACTED] pulls settled trade data from ADP (BPSA) QUARKS transmits clean up from ADP into SBD for USD trades Notes regarding all settlement transactions: 1. ADP will feed STORM with settled security movements. 2. ADP will feed TLM with settled cash movements.
Cleanup Balancing
Settled trades are cleaned up in ADP to reflect movement of securities and cash in Euroclear. Daily, IB Intl FI Ops review that all settled trades reported on the Euroclear Overnight and Daylight Settlements report are captured in the automatic cleanup process. Any exceptions are addressed on a daily basis. Exceptions may occur for the following reasons: trades with duplicate tags trades which were manually instructed in Euroclear IB Intl FI Ops will receive the following reports daily via email from [REDACTED], as described on page 8: - Trade Cleanup Report - Currency Balance Report - Exception Report IB Intl FI Ops will download the Overnight Settlements report and the Daylight Settlements Report from Euroclear on a daily basis. IB Intl FI Ops will compare the currency totals on the Euroclear settlement reports vs. the [REDACTED] currency balance report in order to ensure Euroclear and ADP are in balance. IB Intl FI Ops will compare the settlement movements from the Euroclear reports to the [REDACTED] trade cleanup report. IB Intl FI Ops will isolate [REDACTED] CASE settlements by comparing the Euroclear settlement report to the [REDACTED] trade cleanup report. Ops will back out the [REDACTED] CASE settlements as these will be handled under a different process.
IB Intl FI Ops will research those trades which are reported on the [REDACTED] Exception report to confirm that the trade settled in Euroclear. Identify ADP tag numbers from the [REDACTED] exception report which attribute to the out of balance. If settlement occurred, IB Intl FI Ops will manually cleanup the trade. If the ADP tag number is not found on the [REDACTED] exception report, we will go into ADP MRGI to confirm that the trade is booked in the OMNI account. If the trade is found in the OMNI but the fail did not set up, IB Intl FI Ops will purge on the fail in ADP CAGE and proceed with cleaning up the trade. IB Intl FI Ops will manually cleanup these trades in ADP CAGE. We expect to have a population of settlements which will require manual intervention due to security and cash movements from [REDACTED] CASES.
1.2
Document Maintenance
Documents relating to daily settlement activity are maintained in-house for a six month period. After that time, they are archived for seven years.
2. Processes and Procedures (Fixed Income Euroclear Settlements)

This section identifies processes and procedures that will be used for Fixed Income Euroclear Settlement. The Euroclear Settlements Department processes the instructions necessary to settle purchases and sales via the following domestic Euroclear accounts: WM Clearance 92980 WM SEG 92770 Products supported include: Corporate Bonds Convertible Bonds MBS Securities Custody Trades Government Trades Emerging Market Trades Settlement Cycles, Timing Issues and Prioritization
Overnight Settlement
Euroclear Cutoff time is 1:45 PM on SD-1 for transactions to feed and settle in the overnight batch
Real Time Settlement
Amendments or additions from 1:45 pm (EST) on SD-1 until 8:30am on SD will automatically settle as part of the real time settlement as long as our instructions match our counterparty. Note: Real Time settlement is only available to Euroclear participants.
Daylight Settlement
A small window, from 8:30 to11:30 a.m on SD (Settlement Date) is available to settle unmatched trades in the Daylight settlement cycle. Amendments or additions can settle as part of this cycle as long as both buyer and seller manually flag the daylight indicator on the instruction in Euroclear. Note: Euroclear in Belgium is 6 hrs ahead of our time zone. Prioritizing is very important while working on Urgent unmatched items. Look at the trades for settlement and prioritize according to dollar value of the trade.
2.1 Report Generation Procedures

This section describes procedures for producing daily reports. Status Changed procedure.
Required Reports Report Name Euroclear Reports R20A Security and Cash Related Movements R23A Daylight Settlement Reports When Generated Start of Day Report Description Generation Procedure See page 10.
After 11:30 AM
R23U Securities and Related Cash Movements (Euroclear) Daily Settlement Report R30A Securities Balances (Trade Settlement Report)
Start of Day
After 11:30 AM
Overnight movements of securities and related cash on a daily basis. Final daylight movement of securities and related cash. Report is produced after all daylight operations are completed. Runs prior to the Final (R23 report). Includes some daylights that are already finalized. Shows all trades settled for that day. Settlement is displayed in ISIN order with the description, nominal amount of bonds, money, reference number, currency, status, Euroclear / Clearstream number and buy/sell code. On Clearstream account trades, there will be PROVISIONAL and FINAL statuses due to transfer and verification of data required between Euroclear and Clearstream via the bridge.
See page 10.
See page 10.
See page 10.
Report Name Euroclear Reports R20A Security and Cash Related Movements R23A Daylight Settlement Reports
When Generated Start of Day
Report Description
Generation Procedure See page 10.
After 11:30 AM
R70 ALL Unsettled Urgent Unmatched, Other Unmatched and Unsettled Report
Start of Day
Overnight movements of securities and related cash on a daily basis. Final daylight movement of securities and related cash. Report is produced after all daylight operations are completed. Euroclear report showing all Urgent (past value and value the next day) trades which have not matched i.e., details of these trades (ISIN, money, TD, SD, currency, etc.) do not match or no instructions are present. The clients and our instructions will remain on the report until both match.
See page 10.
See page 10.
BBSA reports (from ADP) FX Wash Funding Report for Settlement Day (Actuals) FX Wash Funding Report for S-2 (Projections) FX Wash Funding Report for S-1 (Projections) Reports from [REDACTED]
Between 8 & 9 AM Between 8 & 9 AM Between 8 & 9 AM
Used to provide currency actuals on Settlement day. Used to provide currency projections for S-2. Used to provide currency projections for S-2.
Emailed from [[REDACTED]] Emailed from [[REDACTED]] Emailed from [[REDACTED]]
Report Description
After 11:30 AM
Daily Fail Report
Start of Day
Overnight movements of securities and related cash on a daily basis. Final daylight movement of securities and related cash. Report is produced after all daylight operations are completed. Includes trades which were updated with a fail reason and still remain unsettled. Also includes trades listed as fails with no fail reason. Lists trades cleaned up in the auto process. Summary of currency balances for trades cleaned up in auto process. Summary of trades not cleaned up in auto process. Lists each instruction generated by DMS and whether that instruction was released to Euclid, as well as whether Euclid received it successfully. [[PLACEHOLDER # 421.]]
See page 10.
[REDACTED] Trade Cleanup Report Currency Balance Report
12 1 PM 12 1 PM
This trade is emailed to the Euroclear Settlements group by [REDACTED]in Fail C&S Support Emailed from [REDACTED]. Emailed from [REDACTED].
Exception Report
12 1 PM
Emailed from [REDACTED].
DMS Reports DMS Instructions WM (Euclid) Report
[[PLACEHOLDE R # 421.]]
Mapping DMS Reference vs. Individual Trades WM (Euclid) Report SEG Deficit Report
Lists any securities where we have an insufficient position in our segregation account on ADP to cover our customer positions.
Report Description
After 11:30 AM
SEG Move List
Overnight movements of securities and related cash on a daily basis. Final daylight movement of securities and related cash. Report is produced after all daylight operations are completed. Lists those securities which moved successfully from Seg to Clearance or vice versa.
See page 10.
Required Applications and External Vendors EUCLID [REDACTED] Groups involved International Euroclear Settlements Cash Management has access to EUCLID Corporate Actions has access to EUCLID C&S Support has access to EUCLID
Type of Capital Markets Euroclear Procedures used to complete the process

Euroclear Reports
Automated procedures to generate Euroclear Reports
Task 1 2 3
Action An automated script is run daily to produce these reports. Open the EUCLID script application. Run scripts at designated times: 7:40 AM 1st part of script 1 PM 2nd part of script for the updated Daily Settlement report. The Euroclear Settlement group reviews these reports daily.
10
Procedures to generate Euroclear reports on demand
Task 1
2 3 4 5 6
Action Log on Euclid PC with the following steps: [REDACTED]t-Programs-Business Apps-Euclid PC-Euclid PC main application Enter USER ID, PIN, PASSWORD Click OK Double click Settlement Click on Reports Choose New from Reports from Drop Down Menu Select Report Type from New Report Menu and click OK Select accounts for which report is to be run and click OK.
Procedures to generate [REDACTED] Reports
Task 1
Action IB Intl FI Ops will receive the following reports daily via email from [REDACTED],:
Trade Cleanup Report Currency Balance Report Exception Report
Procedures to generate DMS Reports
Task 1
Action [[PLACEHOLDER # 421]] How are these reports generated for Intl Fixed Income?
2.2 Euroclear Unmatched Daily Activities

This process involves reviewing matched and unmatched trade instructions which involve Euroclear. Status Changed procedure. Process Description Review unmatched reports and handle daylights. Also, resolve issues with fails. Unmatched daily activities involve matching where we are instructing and dont have instructions to match. Common unmatched problems include the following: No instructions by client (or us) Incorrect Euroclear/Clearstream account numbers TD (trade date) or SD (settlement date) discrepancy Difference of net money or price Type instructions not matching - 01, 02, 01c, 02c, 03, 03c, etc. Security discrepancy Nominal discrepancy Euroclear Instruction Type Codes include the following:
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Code
Explanation
Our Instructions to Match
01 Our buy (receive) 02 Our sell (delivery) 01C Counterparty buy 02 02C Counterparty sell 01 03 Our buy via Clearstream 07 Our sell via Clearstream 03M Counterparty buy via Clearstream 03C 07M Counterparty sell via Clearstream 07C Unsettled daily activities include resolving issues with trades that remain unmatched past Settlement Date. The same procedure is used as for unmatched trades. Required Reports R70 All Unsettled Urgent Unmatched, Other Unmatched & Unsettled Report on page 7. Settlement Report, described on page 7.
Required Applications Euroclear (EUCLID) [REDACTED] Monitor [REDACTED] ADP (BPSA) TLM STORM Groups Involved Euroclear Settlements Department Settlements, Reconciliation and Control (Fail C&S Support) for Nostro and Depot controls Type of Capital Markets Euroclear Procedures Used to Complete the Process Intl FI Ops Settlements group will report urgent unmatched trades (UNM1 status) to relevant WM trade support via an Excel report on a daily basis. Common unmatched problems include the following: No instructions by counterparty or [REDACTED] IB Incorrect Euroclear/Clearstream account numbers TD (trade date) or SD (settlement date) discrepancy Difference of net money or price
12
Type of instructions not matching - 01, 02, 01c, 02c, 03, 03c, etc. Security discrepancy
- Nominal discrepancy Intl FI Ops Settlements group will report all counterparty trade allegements which we do not recognize to WM trade support via an Excel report on a weekly basis. Any large trade allegements will be escalated to WM trade support immediately.
Review Unmatched Reports
In this instance, we are instructing and dont have instructions to match. Step 1. Import the R71 Euroclear Reports into Excel. Step 2. Use the Excel macro which reformats the report into columns. Step 3. Review the reformatted report and note, for each item on the report, the Contrabroker IDs and desk contacts. Step 4. Check for the Omnibus account in Euroclear, DTC and International Equity OMNI. Go to ADP. Type in 200YY500 as the WM Euroclear Omnibus account number. Type in 200YY290 as the valid DTC OMNI account number. Type in 2000YY730 as the valid International Equity OMNI. Validate currency quantity and other instructions. Step 5. Check [REDACTED] (only for Exceptions). Step 6. If Contrabroker is alleging trade: 1. Look up in ADP/BPSA to determine if it is a valid trade. a. Ensure they are instructing to correct EC account. (92980 for WM) b. Verify it isnt a dupe. c. Is it Future Matched? 2. Advise WM desk by email that there is a trade outstanding which does not have the above information. Step 7. Review Other Unmatched Report in the same fashion as the Urgent Unmatched. This report contains information about future trades (two days out).
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Review Daylights
Preliminaries: A small window is available on SD to settle unmatched trades in the Daylight settlement cycle. Daylight settlements are only possible between Euroclear participants. Daylight matching and settlement occurs between 8:30 AM and 11:30 AM in Euroclear. Request comes from client/countrabroker or from branch. It is not initiated by the Euroclear Settlement group. The following steps are performed by International Fixed Income Settlements. Step 1: Adjust trades manually on SD by flagging trades with a daylight indicator in Euclid. Note: The counterparty must have instructions flagged with the Daylight indicator as well. Step 2: Instruct via Euclid for daylight settlement. If the customer matches us via daylight, then the trade will settle as long as no one is short the bonds. Step 3: Send email of daylight settlements to IB Cash Management, the IB C&S Support and the WM C&S Support for adjustments and additional funding. Note: If the trade is not settled via the Daylight process, the trade will settle in the overnight batch. This could result in interest charges.
2.3 Cancels, Corrections and Reversals of Trades

Status Changed procedure
Process Description Resolve trade discrepancies due to: Cancellation and corrections for trade discrepancies issued from the front office systems ([REDACTED] or PBAS) Reversals relating to duplicate booking of a settled trade. The following are results of corrections: If trade is cancelled prior to SD, the original trade booking in ADP and trade instruction in Euroclear will be automatically cancelled. The correction will automatically create a new trade booking in ADP and a new market correction in Euroclear Required Reports Settlement Report Required Applications EUCLID (Euroclear)
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ADP DTC [REDACTED] [REDACTED] (for Trading Desks only) PBAS (for Trading Desks only) [REDACTED] Exception Monitor Quarks (part of [REDACTED] infrastructure). See trade flow diagram on page 1.
Groups Involved Euroclear Settlements Department WM - Desks (include Contrabrokers or DVP Custodial Agent)
Type of Capital Markets Euroclear Time Restrictions Trades can be cancelled and corrected by WM up to 2:30 p.m. on SD 1. Settlement Day -1 Cancel and Rebook: If it is SD-1and past 2:30 p.m., WM Trading Desks cannot cancel and rebook any trade unless they call the International Fixed Income Settlements group in order to confirm the status of the trade in the market. This SLA is required as it is a market restriction to cancel any matched trades past 2:30 p.m. on SD -1. Failure to perform this notification could result in duplication of settlement. If it is determined that a matched trade needs to be cancelled on SD-1 after 2:30 PM, the WM trading desk doing this cancellation needs to send an email to International Fixed Income Settlements group to advise that the trade is being cancelled. Post Settlement Day Cancel and Rebook If trade is cancelled and rebooked after settlement day, the trading desk must provide email notification to Euroclear Settlements. If this is not done, risk duplication in settlement. Note: This email must also be sent to the IB P&S Group. Procedures Used to Complete the Process
Procedures for Cancels and Corrections
If there are discrepancies: Step 1. Advise Sales Desk of difference (Desk can view in [REDACTED] and Settlement group can view in EUCLID) Step 2. Desk can do cancel/correct in [REDACTED]. They need to cancel the trade and rebook a new trade. Note: If a trade is matched to settle tomorrow, trade can be cancelled and corrected by the trading desk up to 2:30 PM on Settlement Day 1. If this is not done by 2:30 PM, the Euroclear Settlements group is only responsible for best efforts. Step 3. If trade is cancelled post Settlement, breaks will occur in TLM and STORM.
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Procedures for Reversals
Step 1. In order to reverse a trade which has settled mistakenly, or settled in duplicate, first verify the trade indeed settled twice or incorrectly. Step 2. Verify the trade ticket /trader on the settlement report and on ADP. Step 3. Inform the trader/updater of problem. Step 4. Inform counterparty of duplicate settlement and request they reinstruct to reverse. Step 5. Instruct the reversal in Euclid by entering the opposite instructions. (i.e.: 01 for 02, 03 for 07 etc.) Step 6. If the trade has settled twice and there is a dupe, use STORM to track security break and TLM to track cash break.
2.4 Clean-Ups and Exceptions

Status Changed Procedure Process Description Settled trades are cleaned up in ADP to reflect movement of securities and cash in Euroclear. Exceptions are done to review manual entries that did not pass through [REDACTED]. Some examples of exceptions include: Trades with duplicate tags Manual amendments to be instructed in Euroclear Required Reports The following reports are used during this process. Euroclear Settlement Report Euroclear Daylight Report (R23) Euclid Cleanup Balance Report Euclid Exception Report Euclid Totals Report Required Applications Euroclear (EUCLID) [REDACTED] ADP ADP CAGE [REDACTED] [REDACTED] Exception Monitor SBD (aka WM mainframe - [REDACTED]) Quarks
Groups Involved Euroclear Settlements Department
16
Type of Capital Markets Euroclear Procedures Used to Complete the Process Preliminaries: Clean-ups are done automatically in ADP, via [REDACTED]. [REDACTED] uploads settled trades for Euroclear and downloads settlement information into ADP. The following steps are done by IB International Fixed Income Operations Settlement group: Step 1. Receive daily the following reports from [REDACTED]: Trade Cleanup Report - trades which have been cleaned up automatically Currency Balance Report - total currency balances of trades cleaned up automatically Exception Report - an exception listing of trades not automatically cleaned up Step 2. Download from Euroclear daily the Overnight Settlements Report and the Daylight Settlements Report. Step 3. Compare the currency totals on the Euroclear Settlement Reports vs. the [REDACTED] Currency Balance Report in order to ensure Euroclear and ADP are in balance. Step 4. Compare the settlement movements from the Euroclear reports to the [REDACTED] Trade Cleanup Report. Step 5. Isolate [REDACTED] CASE settlements by comparing the Euroclear Settlement Report to the [REDACTED] Trade Cleanup Report. Step 6. Back out [REDACTED] CASE settlements as these will be handled under a different process. Step 7. Research those trades which are reported on the [REDACTED] Exception Report to confirm that they settled in Euroclear. Step 8. Identify the ADP tag numbers from the [REDACTED] Exception Report which attribute to the out of balance. Step 9. If settlement occurred, manually cleanup the trade. Step 10. If the ADP tag number is not found on the [REDACTED] exception report, go into ADP MRGI to confirm that the trade is booked in the OMNI account. Step 11. If the trade is found in the OMNI but the fail did not set up, purge on the fail in ADP CAGE and proceed with cleaning up the trade. Step 12. Manually cleanup these trades in ADP CAGE. Notes: [REDACTED] communicates only trade settlement information for free and USD (SCOD) trades to SBD. International Fixed Income Settlements expects to have a population of settlements requiring manual intervention due to security and cash movements from [REDACTED] CASES.
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2.5 Fail Management

Status Changed procedure for WM. Process Description This process involves the resolution and reporting of fails. Required Reports [REDACTED] Daily Fail Report Required Applications [REDACTED] ADP BTS1 EUCLID JETWEB
Groups Involved Euroclear Settlements Department Desks for TFI, RIS ACS and PB WM C&S Support WM Branch WM Helpdesk Reconciliation group
Type of Capital Markets Euroclear Procedures Used to Complete the Process The following steps are done by IB International Fixed Income Operations: Step 1. Receive an electronic copy of the [REDACTED] Daily Fail Report from the IB Fail C&S Support. Step 2. Review and update the [REDACTED] Daily Fail Report as follows: Export the following reports from Euroclear: the Overnight Settlement (R20), the Daylight Settlement (R23A and R23U) and the Urgent Unmatched and Unsettled (R70). Compare those trades on the [REDACTED] Fail Report to the Overnight and Daylight settlement reports. This is done in order to identify those trades which have settled. Note: Settled trades will be highlighted in yellow. Identify the fail reason from the Urgent Unmatched and Unsettled Report for those trades which remain outstanding. The fail reason is determined by manually looking up the specific trade on the Euroclear Unsettled Report.
18
Update fail reason in [REDACTED]: - Login on to [REDACTED] using the following URL: [REDACTED]] - Highlight the row of the trade which needs to be updated. - Click the EDIT button. - Select the appropriate fail reason from the drop down menu. - Save the reason. Fail Reason
Figure 2: [REDACTED] screen Advising Fail Reason
Step 3. IB Intl FI Ops will distribute one fail report via email spreadsheet format to all desks at WM (TFI, RIS, ACS and PB) by 1 PM daily. Step 4. Each desk is responsible to assist in the resolution of failing trades and liaising with counterparties to resolve differences. Step 5. Desk is to provide feedback on actions being taken to resolve the fail by COB. Applies to contractual trades only. Step 6. If a trade is cancelled and rebooked after settlement date, the WM trading desk (TFI, RIS, ACS, [REDACTED]I and PB) must provide email notification to IB Intl FI Ops so we can ensure all the necessary adjustments are reflected on the sub-ledger correctly. If this is not done, there is a risk of duplicating settlement.
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2.6 Settlement of Non Dollar/Currency Trades

This involves Currency trades (non-Dollar) which are held for review to examine the accuracy of the currency amount. This is necessary since the Front Desk enters the currency in a Comments field, as described below. To reduce exposure in case the currency is entered incorrectly, this special format is required. Status Changed procedure Process Description Release Currency Trades from [REDACTED] Exception Monitor after review. If a problem occurs, call Desk. Desk is responsible for cancelling and rebooking the trade. Required Reports Display via [REDACTED] Exception Monitor Required Applications [REDACTED] ADP EUCLID Groups Involved Euroclear Settlements Department Desks for TFI, RIS and ACS Type of Capital Markets
Euroclear
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Procedures Used to Complete the Process This includes everything that is not Dollars. Step 1. Front Office will enter currency value in Comments field. The format is:
ICC, immediately followed by an asterisk, followed by currency type, a space and settlement amount. Example: ICC*EUR 202007.09
Currency value
Figure 3: Currency value in Comments field NOTE: Do not include comma separators for the currency value.
After trade entry, the following is the sequence of events for entry of a Currency Transaction: Step 2. Each currency transaction is listed as an exception in the [REDACTED] Exception Monitor. Step 3. If the WM Trading Desk has populated the trade details and Trailer 1 field correctly, it will be given a 508 code which is visible in the [REDACTED] Exception Monitor. This indicates that the transaction is correct but must be approved by Settlement Operations. Step 4. After approval, the trade can be released at the [REDACTED] Exception Monitor. CONTROL PROCEDURE: This will be put in place to reduce problems with Exposure in case a trade was entered incorrectly
2.8 Funding
Euclid Money Transfer Reporting is available
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Note: For contractual settlement, funding requirement will match the sum of transactions recorded in the Omnibus Account. COD activity is separate from contractual activity Status Changed procedure Process Description Projection Reports are required by each International workstream. 1. For USD SCOD (Settled Cash On Delivery) trades, the client does not get paid until settlement. In the WM world, it is necessary to Buy or Sell on Settlement Day. The Reconciliation group will fund SCOD trades in ADP for client accounts. 2. For Retail clients, settlement is not required before these clients get paid. Note: This doesnt usually affect Ops because money is not passed until Settlement day. Changed process. Retail trades will be booked through the OMNI account. SCOD (Settled Cash On Delivery) trades will hit OMNI and Special client account in ADP. The Reconciliation group will handle projections for SCOD trades. FX Trade Bookings: - Retail FX Trades booked on 86 blotter in FX Wash Account (450-73324) - SCOD FX Trades booked on 8Z blotter in FX Wash Account (450-73324) Required Reports The following reports are used during this process. Projection Reports [[PLACEHOLDER # 333 additional detailed report may be required.]] Required Applications BPSA Groups Involved Euroclear Settlements Department WM Cash Management IB Treasury Type of Capital Markets Euroclear
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Procedures Used to Complete the Process

Clean-Up of Non-Dollar Trades
Step 1. On contractual SD, IB Intl FI Ops will manually journal the USD between the FX Wash account and the Euroclear Omni account on ADP. Step 2. On actual SD, the FTR/FTD or SCOD trade will automatically be cleaned up on ADP vs. the Nostro account and Depot account. Step 3. On actual SD, IB Cash Management will journal the currency between the FX Wash account and the Nostro account on ADP when funds are received/paid to WM. Step 4. On actual SD (for SCOD currency trades), WM will need to make entries to adjust their books and records upon notification of settlement. Step 5. Notification of settlement will be reported in the daily projection report for ACTUAL settlements which will be distributed by IB Intl FI Ops to WM C&S Support, IB Reconciliations and IB Cash Management.
Clean-Up of Non-Dollar Trades
Step 1. On a daily basis, IB Intl FI Ops will provide funding projections for currencies only. Step 2. IB Intl FI Ops will receive an email from [REDACTED] with funding projections encompassing settlement date, SD 1, and SD 2. Step 3. IB Intl FI Ops will provide both currency and USD cash values on the Funding Projection Report. [[PLACEHOLDER # 459 - confirm timings]] USD Cash Values will be sent to IB Reconciliations by following times: S-1 Projection by 2:45 PM 1 Settlement Day 1st Projection by 8:45 AM Settlement Day Actual by 3:45 PM USD Backout of Settlement Projections will be sent to IB Reconciliations by the following times: Settlement Day Actual due by 3:45 PM Currency cash values will be sent to C&S Support by the following times: S-2 Projection by 8:15 AM S-1 Projection, including adjustments to S-1 projection, by 8:15 AM Settlement Day Actual, by 7:30 AM Notes: For the SD-1 and SD 2 projections, IB Intl FI Ops will ensure [REDACTED] reports are in agreement with the FX Wash Account bookings (450-73324). IB Intl FI Ops will ensure the SD1 and SD-2 projections are in agreement with instructions in Euroclear. Settlement of [REDACTED] CASES vs. PAYMENT will impact funding needs. This issue will be addressed in further detail under [REDACTED] CASE processing on page 37.
1
For all the timings listed in Step 3, reports are due to the Funding group by 45 minutes after this time. Therefore, since funding numbers must be consolidated by either IB Reconciliation) or WM C&S Support. all hours listed here are 45 minutes prior to the times shown on the Funding Projection Report.
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2.9 ACATS
Refer to the Appendix on page 44 for a description of ACAT Responsibilities and Flow. Status New procedure Processing Description Setting up ACATS from NSCC with No Security Identifier (ISIN: NSCC will leave the security identifier field blank in the ACAT when the security identifier is not found in their glossary. The security identifier (ISIN) is included only in the description field. The ISIN is used to settle in the International Local Markets and Euroclear. As a result, the set up for settlement, at WM and books and records at ADP will need to be processed manually. This issue will be dealt with in the following procedure. Note: This procedure is also available in the ACAT Process & Procedures document described in Related Documents Required Reports NA Required Applications and External Vendors NSCC ADP (CAGE) Groups Involved WM ACAT Group Reconciliation Group International Settlements - Fixed Income (Euroclear) Type of Capital Markets Euroclear l Fixed Income Procedures used to complete the process
Setting Up ACATS from NSCC with No Security Identifier (ISIN)
1. Acts transfers may come over NSCC with the security identifier field as a blank and be included in the description field instead. Thus, the transfer cannot go through the regular process and must be set up manually. 2. Upon receipt of the ACAT, the WM ACAT group is responsible for sending an email to the following recipients simultaneously: Reconciliation group to set up the ACAT on ADP Cage International Settlements to set up the settlement instructions in EUCLID. International Settlements will use this information to send settlement instructions. 3. International Settlements will use this information to send settlement instructions.
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2.10 Setting up new Broker-Dealer

Status New procedure [[PLACEHOLDER #363 depends on outcome of meeting with [REDACTED]]] Processing Description When a new Broker-Dealer is being set up at WM, the information should immediately be passed on to IB Data Management for such broker in order to set it up at IB; otherwise the trades will fail if such broker is only set up at WM. This is a process that will impact both Domestic and International. Required Reports NA Required Applications and External Vendors [PLACEHOLDER #363 confirm that all vendors are included]] Groups Involved International Fixed Income Euroclear Type of Capital Markets Euroclear l Fixed Income Procedures used to complete the process 1. If trade is not set up with the broker-dealer account, the trade will come to Int'l Fixed Income group as a fail. 2. The trader's assistant at the trading desk is responsible for adding this to the Account Workflow (AW), and must get approval from the trader. 3. Upon approval, notification is provided to the following groups (DMAC) Data Management Accounts, Tax and Compliance by the Trader's Assistant. 4. Notification is also provided to Int'l Settlements that the trade now has the correct information.
2.11 Depot Movement

Status Changed process for WM. Process Description There will be instances when securities must be moved between two clearing houses, Euroclear and DTC. This is a manual process to effect the movement.
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Required Reports Urgent Unsettled Report Settlement Report Required Applications DTC EUCLID ADP Groups Involved Euroclear Settlements Group DTC Settlements group Type of Capital Markets Euroclear Procedures Used to Complete the Process Step 1. Euroclear Settlements actions movement of securities from DTC to Euroclear in the event that DMS indicates insufficient position in Euroclear for dually eligible securities. Step 2. International Fixed Income Operations sends a report to internal DTC Settlements group advising them of the transaction. Step 3. DTC Settlements group contacts Euroclear Settlements Group to request a transfer.
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3. DMS Procedures
This section describes procedures for use of DMS (Delivery Management System) which manages movement between Segregation and Clearance accounts at agent banks for Retail activity. [[PLACEHOLDER # 421 Report names, exception processing and name/illustration of DMS error monitor will not be available until after Mock.]] Status This is a new procedure to handle WM products. Process Overview: Flow Diagram [REDACTED]
Figure 4: SEG Analysis
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Processing Description Two accounts are maintained in Euroclear: 1. Safekeeping account (92770) - Client assets are held in this account to ensure that they are held in good control location separate from any firm assets. 2. Clearance account (92980) - All trades are settled in this account. Instructions must be sent to Euroclear to move shares from one account to the other. Each movement that takes place at Euroclear must be reflected in our Depot accounts on ADP. The Delivery Management System (DMS) is designed to generate instructions to move shares between our safekeeping accounts and our clearance accounts at the agent banks and to issue journal entries to ADP to mirror those movements.
Seg Movement Example
Customer Customer 11/1 Customer Customer
buy of 1500 Shares of XS0184740420 (Rabo Australia) SD 10/31 sell of 2000 Shares of XS0191400679 (Societe Generale Note) SD sell of 1000 Shares of XS0184740420 (Rabo Australia) SD 11/1 buy of 5000 Shares of XS0128741898(John Hancock) SD 11/1
DMS Activity on 10/31:
1 set of instructions to move 2000 shares of XS0191400679 from safekeeping to clearance for SD 11/1. 1 set of instructions to move 500 of shares of XS0184740420 from clearance to safekeeping for SD 11/1. 1 set of instructions to move 5000 shares of XS0128741898 from clearance to safekeeping for SD 11/1. ADP journals 500 of shares of XS0184740420 debiting our Euroclear clearance account and crediting our Euroclear safekeeping account. ADP journals 2000 shares of XS0191400679 debiting our Euroclear safekeeping acct and crediting our Euroclear clearance account. ADP journals 5000 shares of XS0128741898 debiting our Euroclear clearance account and crediting our Euroclear safekeeping account.
DMS Activity on 11/1:
ADP Activity on 11/1:
Required Reports DMS Instructions WM (Euclid) Report Mapping DMS Reference vs. Individual Trades WM (Euclid) Report SEG Deficit Report SEG Move List
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Required Applications and External Vendors Euclid ADP [REDACTED] Exception Monitor (displays DMS activity) Groups Involved International Settlements Types of Capital Markets International Local Markets - Euroclear Procedure Used to Complete the Process DMS functions: DMS determines delivery requirements based on trade bookings received in [REDACTED] for all customer long sales. Calculations are done on SD 1. DMS calculates intra-day receipts into our clearance account resulting from customer buy trades. DMS then determines the net share movement (either from safekeeping to clearance or clearance to safekeeping) based on delivery requirements and receipts. DMS generates two instructions based on those calculations, one free receipt and one free delivery, to move securities between accounts at Euroclear. DMS queries BPSA to determine if sufficient securities are held in the delivering account. If not, the instructions are sent to an error monitor. Step 1. If the delivering account holds insufficient securities, review and research those items in the DMS error monitor. Insufficient positions may result from: a position that is held at DTC an open fail to receive depot break Note: If sufficient position is held, [REDACTED] sends instructions to Euroclear. Step 2. Upon settlement in Euroclear and notification via [REDACTED], journals are posted in ADP to reflect the movement of shares on WM books. DMS Exception Review Procedures The [REDACTED] Exception Monitor reports the status of each instruction generated and sent to [REDACTED]. [[PLACEHOLDER # 421]] Step Action 1 Open [REDACTED] Tuner 4.6 on your computers Start menu. 2 Right click on [REDACTED] Exception Monitor 2.0 3 Click on [REDACTED]t. 4 Enter your user name and password. 5 Select Production from the drop down menu. 6 Click OK. DOCUMENT VERSION 3.1 29
Step 7 8 9 10
Action Click on DMS. Errors will appear on the view for the day. [[PLACEHOLDER # 421]] Click on the instruction you want to review. Use the Out Error Code field to determine why the instruction did not go to Euclid. If the instruction failed because DMS has determined that there is insufficient position, open ADP stock record and determine why DMS was unable to find enough shares. 10.1 If we do not have a position in the security at all: First, confirm that there is no position in Euclid. If there is none, determine the reason why we are short. We may have an open fail to receive the security or the customer may have sold short. Do not resend the instruction to Euclid. If you have determined the instruction should not be sent, close it in [REDACTED] Exception Monitor. 10.2 If we hold the position under a different currency from what DMS determined as the correct currency: Resend instruction to Euclid; this closes it in [REDACTED] Exception Monitor. Create journals in ADP to change the currency in the stock record before the instructions settle and are cleaned up by DMS. 10.3 If we hold the security under a different ADP number: Confirm the correct ADP number. Either releases the instruction and make correcting entries in ADP or close the instruction in [REDACTED] Exception Monitor. 10.4 If we have only a partial position in the security at ADP: Determine the reason. At that point, you may resend the instruction to Euclid. You may either release the instruction for the total amount or you may change the quantity in [REDACTED] before you release it.
NOTE: DMS is designed to create instructions only for trades that are booked via [REDACTED]. If a trade is booked manually, no DMS activity will occur for that trade. Any position transfers for that trade must be done manually. SEG Deficit Report Procedures Each morning you will receive Seg Deficit Report, via email, from the Reconciliation group listing any securities where we have an insufficient position in our segregation account on ADP to cover our customer positions. We need to ensure that we have resolved these deficits prior to close of business. You will also receive SEG Move List Report listing securities which moved successfully. Step Action 1 For any deficits that will be covered by the previous days DMS instructions, monitor those instructions and confirm that they settle by the end of the day. 2 For any deficits that will not be covered by the previous days DMS instructions, manually generate instructions in Euclid. 3 When those instructions settle, make corresponding journal entries in ADP.
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4. Reconciliations
This section describes how the International Fixed Income Settlement group handles daily reconciliations.
4.1 Depot Reconciliation

This process allows modifications to be made during Depot movement process described on page 25. Related Topics: ADP Accounts used for Depot Reconciliation are found in the Appendix on page 43. Status Changed procedure. Process Description IB Intl FI Ops will use Storm to reconcile its Euroclear depot accounts. Review exceptions in STORM application and correct in Euroclear and ADP. Depot balances in our ADP accounts will feed Storm. - 097-81067 = 92980 Clearance Account - 097-81066 = 92770 Safekeeping Account Storm will receive a daily statement from Euroclear for all security balances in our 92980 and 92770 accounts. Storm will report any depot breaks between ADP and Euroclear. IB Intl FI Ops will investigate all depot breaks, as described in the procedure below. IB Intl FI Ops will liaise with the appropriate department based on the nature of the break. Some breaks will result from: - Corporate Action events - Technical breaks due to security ID discrepancies - Cancellations and corrections of transactions already settled in Euroclear
Required Reports NA Required Applications Euroclear (EUCLID) DTC ADP STORM
Groups Involved Euroclear Settlements Department
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DTC Settlements group
Type of Capital Markets Euroclear Procedures Used to Complete the Process Step 1. Review exceptions in STORM. Step 2. Investigate breaks. Step 3. Make corrections in EUCLID and ADP.
4.2 Nostro Reconciliation

Status Changed procedure Process Description Related Topics: ADP Accounts used for Nostro Reconciliation are found in the Appendix on page 43. This process allows cash modifications to be made. IB International Fixed Income Operations will use TLM to reconcile its Euroclear Nostro accounts for all currencies Cleanups made to Intl Fixed Income Operations Nostro accounts on ADP will feed TLM IB Intl FI Ops will use TLM to identify and research differences between Euroclear and ADP.
TLM will receive a daily statement from Euroclear for cash activity in 92980 and 92770 accounts
TLM will match debit/credit activity at Euroclear vs. debit/credit activity posted to ADP sub-ledger TLM will provide a listing of exceptions
Required Reports NA Required Applications Euroclear (EUCLID) ADP
Groups Involved Euroclear Settlements Department Cash Management Reorg Department Dividends group
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Type of Capital Markets Euroclear Procedures Used to Complete the Process The following steps are done for Cash items. Preliminaries: Via batch, ADP cash debits and Euroclear debits and credits are transmitted to TLM. TLM compares debits and credits for Euroclear and ADP. Only the exceptions are visible in TLM. Step 1. The next morning, Euroclear Settlement group accesses TLM to identify differences between Euroclear and ADP. Differences are generally caused by:
Fees Corporate actions Dividends FX trades Miscellaneous Cash Management bookings Tax With-holdings Incorrect settlements in Euroclear Erroneous payments / receipt of cash Cancellations and corrections of transactions already settled in Euroclear.
Step 2. Inform the department responsible for entries (usually Cash Management, Reorg Department, Dividends Group) that monies need to be journaled to or from the Euroclear account and carry a difference until their journal hits. (Example: The Dividend Department would be responsible for principal payments from a corporate action.) Step 3. Reverse entries in ADP that youve made that cause bad differences. Step 4. The next day, these entries would be paired off in TLM. TLM breaks attributed to small differences (less than $25.00 USD) will be journaled to the Write-off account [REDACTED].
4.3 FX Wash Account Reconciliations

IB International Fixed Income Operations will use TLM to reconcile the FX Wash Account.
4.4 Settlement Day and Trade Date OMNIBUS Reconciliations

Status Changed procedure. Process Description [[PLACEHOLDER # 351 - FROM REC WORKSTREAM]] Omnibus reconciliation is conducted by Euroclear Settlements Group to ensure cash and position data reflects equal and opposite balances between Omnibus Accounts for IB and WM. DOCUMENT VERSION 3.1 33
This activity takes place following posting of clean-up entries based on Euroclear activity on S+1. The following accounts are used in this processing.
Euroclear: [REDACTED] [REDACTED]
External Accounts
COD Accounts: 1-AE
[REDACTED] [REDACTED]
Internal Accounts
[REDACTED]
Internal Accounts
Required Reports The following reports are used during this process. Online report from [REDACTED] Required Applications Euclid Groups Involved Euroclear Settlements Reconciliation Group C&S Support Type of Capital Markets Euroclear Procedures Used to Complete the Process
Setttlement Day OMNI
[[PLACEHOLDER # 383]I Step 1. Reconciliation Group reports all breaks between WM OMNI vs. IB OMNI to either. Step 2. If break on IB side, communicate to International Fixed Income Settlement group. Step 3. If break on WM side, communicate to WM C&S Support. Step 4. To resolve break on IB side, Settlement group will add narrations in [REDACTED] for breaks that are their responsibility. Step 5. To resolve break on WM side, [[PLACEHOLDER # 383]]
Trade Date OMNI
Step 1. P&S will report breaks to IB (International Fixed Income Settlement) and WM C&S Support. DOCUMENT VERSION 3.1 34
Step 2. For IB side, P&S will rebook the trades affected by the break. Step 3. P&S will then notify Fixed Income Settlement group that they have booked the trades so the Settlement Group can manually instruct. Step 4. For WM side, [[PLACEHOLDER # 379]]
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5. Processes and Procedures (Non-Euroclear)

This includes the processing of securities for Local Markets.
5.1 Local Markets

These processes are described in the [REDACTED] Securities LLCInternational Equities Processes and Procedures document. Status Changed procedure Processing Description Instruct on bonds which are settling in the Local Market. Required Reports NA Required Applications Euclid [REDACTED] Groups Involved Euroclear Settlements International Settlements - Equity Procedure to Settle Bonds Settling in the Local Market Step 1. Scope International Equity OMNI to determine whether there is anything open for bonds. Step 2. Settle in [REDACTED] using the Local Market.
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Appendix A: [REDACTED] CASE Procedures

This section describes processes and procedures for [REDACTED] Cases. Status Changed process (due to maintenance of [REDACTED] CASE Tracking Report) Processing Description [REDACTED] is the primary on-line vehicle for the branch offices to: Request operations and services support for designated tasks Submit actions for request Branches will be required to open a [REDACTED] case before IB Intl FI Ops will action any branch requests to receive/deliver securities as a straight transfer. If a branch wishes to transfer securities via Euroclear, [REDACTED] case is sent to the service center: International Ops. REC/DEL Euroclear Each task is assigned a benchmark. The benchmark to receive/deliver bonds via Euroclear is five business days.
Required Reports NA Required Applications and External Vendors SBD (aka WM mainframe - [REDACTED]) used in [REDACTED] process [REDACTED] (Service Track Application Request system) EUCLID
Groups involved International Settlements Branches
Type of Capital Markets Euroclear Procedures used to complete the process

Preliminaries
A. When a [REDACTED] case is opened by the International Operations Receive and Deliver Bonds group which is part of the Euroclear Settlements group, the Service Rep must ensure that the following is part of the [REDACTED] Case. Failure to do so will delay the transfer since instructions to receive/deliver shares cannot be completed without the following: (1) The following information is required before instructions can be created. Matching Security number and ISIN Trade Date (TD) and Settlement Date (SD) Share Amount DOCUMENT VERSION 3.1 37
Money amount (if required for this transaction) Euroclear or Clearstream/Cedel # (2) Margin approval is required for the following before instructing: Delivery Free of Payments Receive vs. Payments Delivery vs. Payments Note: If Margin approval has not been received, reroute [REDACTED] Case to WM Treasury and request approval. (3) Margin approval is not required for the following before instructing: Receive Free of Payments (4) FX approval is required for the following: RVP or DVP in Currency Note: If FX approval has not been received, reroute [REDACTED] Case to WM Treasury and request approval. (5) If all the above criteria has been satisfied, input instructions in Euroclear.
Special Notes
[REDACTED] CASE TRACKING REPORT: Since [REDACTED] Cases will not be booked on the IB ADP ledger, IB International Fixed Income will manually maintain a [REDACTED] Case Tracking Report which lists the details of each case. This will be helpful to maintain flow of [REDACTED] Cases. On a daily basis, International Fixed Income will manually reconcile the [REDACTED] Case Tracking Report to the [REDACTED] Case worksheet on the WM system. SEG ANALYSIS: Intl FI Ops will handle the SEG analysis, through a manual process, to ensure that securities are moved from the safekeeping to clearance account for all DVP transactions. DMS will not consider [REDACTED] CASES in its calculations. MEMO THE CASE: Upon successful transmission of instructions, IB Intl FI Ops will memo the case to advise that instructions have been sent to Euroclear.
Steps Involved
Step 1. Use a WM password to access the [REDACTED] (Service Track Application Request) system. Step 2. Select the [REDACTED] case from the Worksheet screen. Step 3. The individual [REDACTED] Case can be viewed on the Details for Case screen with the following information, as illustrated in Figure 5 below. Client account Client short name Financial Advisor Who input the case Brief description of the case [SCREEN IMAGE REDACTED]
Figure 5: Individual [REDACTED] Case page
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Step 4. On the second page of the Details for Case screen, check that the security number is the same as the ISIN number (see Figure 6 below). Note: This screen also illustrates that this [REDACTED] Case was approved by Margin. [Screen Image REDACTED]
Figure 6: [REDACTED] Case Detail page 2
Step 5. Access the [REDACTED] application to check that the Security number and ISIN on the static data records matches the information in the [REDACTED] Case. Step 6. If any required information from Preliminaries on page 37 is missing: Memo the case back to the Branch, using the [REDACTED] Memo screen. The case is then pended at the Pending screen. This screen provides room for comments. A case can be pended in two ways: 1. Waiting for Settlement. (If no reply in 15 days, case cancels and cannot be reopened.) 2. Waiting for Branch Reply. (If no reply in 15 days, case cancels and cannot be reopened.) Step 7. If the preliminaries were set up correctly, instructions can be created in EUCLID. Step 8. Login to EUCLID and access instruction screen illustrated in Figures Figure 7 and Figure 8 Step 9. State whether this item is a Receive or a Deliver.
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Figure 7: EUCLID Instruction screen 1st screen
Figure 8: Euclid Instruction screen - EUCLID Instruction screen 2nd screen
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Step 10. In most cases (except ACATS), do not put information in the Comments field. Note: When the ACATS department opens a case they can only put information in the Comments field. Step 11. After instruction, memo the case to the branch. All cases must be memod after they are instructed. Upon successful transmission of the memo, you will be advised that: Instructions have been sent to Euroclear. Step 12. Every case is updated with a memo in the morning. Common memos include the following: Counterparty has no instructions in Euroclear This item is matched for settlement. This item is matched but counterparty is short the securities (CSEC). Counterparty is instructing a different (TD/SD/isin/$Amount/Euroclear Account #) than what was given on this case. Step 13. After the trade settles, close the case, as described below. This is done in the morning.
Closing Out Cases
To close out Receive Free and vs. Payment, enter the following in [REDACTED]S: 001: Problem code 001: Resolution code You receive the following response: This item has settled. To close out Delivery Free, enter the following in [REDACTED]S: 001: Problem code 777: Delivery Free of Payment You receive the following response: Your Delivery vs. Payment has been processed. To close out Delivery vs. Payment, enter the following in [REDACTED]S: 001: Problem code 777: Delivery vs. Payment You receive the following response: Your Delivery has been processed.
Step 14. Later in the day, pass [REDACTED] entries from box account to client account. Put entries into a spreadsheet, as illustrated in Figure 9. Upload entries into [REDACTED], as illustrated in Error: Reference source not found.
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[REDACTED]CASES JOURNALS LN ACCT-NO/ NO DESC-1 STMT CODE NO DESC-2 HOW A DELIVERY VS PAYMENT [REDACTED]CASE IS JOURNALED AND PASTED IN [REDACTED] YYDB1500000 UT17415 UT174151 [REDACTED] 18372240 HOW A RECEIVE FREE OF PAYMENT [REDACTED]CASE IS JOURNALED AND PASTED IN [REDACTED] YYDB0500700 AE05115 AE051151 [REDACTED] 18382860 DEL1 635BH6 3700 REC1 635BH6 -3700 REC7 -252992.87 638D12 -305000 DEL7 252992.87 638D12 305000 DOLLAR-AMT/ SEC-NO QUANTITY AS OF DATE
Figure 9: [REDACTED] Case Journals
Step 15.
Advise the branch that the shares have settled: Access the [REDACTED] application Bring up the case by case number: Close the [REDACTED] case. This advises that the shares have settled. Step 16. For any delivery problems in [REDACTED] Case settlement: Press F2 to bring up the line. Press F3 to memo the case. Review the following codes: Problem code 001 used for both Shares Received and Delivered Resolution code 018 Used for Shares Received Resolution code 777 Used for Shares Delivered Step 17. At completion of Step 10, Branch receives a memo stating that pending is closed. Step 18. Intercompany [REDACTED] is passed. This will pass entries into ADP and through WM via SBD (aka WM mainframe - [REDACTED]) application. As a result, International OMNIs will be booked on either side (WM and IB), Client account on the WM side, and the Depot account.
Reroute Transfers to Other Internal Groups
Occasionally transfers will come in that dont belong to International Equities. These include Bonds, Corporate Actions, Domestic Transfers, etc. Step 1. Go to the case, as instructed in earlier steps. Step 2. Go to the second sub-screen of the menu. Step 3. Select Route. This will bring up a list of service centers. Step 4. Choose the Route, type code 901 and hit ENTER. This transfers the request to the selected route.
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APPENDIX B: ADP Accounts for Securities and Cash

These accounts are used for Nostro and Depo Reconciliations. [REDACTED]
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Appendix C: ACAT Responsibilities and Flow

An ACAT (Automated Customer Account Transfer) is a client request to transfer assets to a contra firm. All ACATS are initiated by the receiving firm. RESPONSIBILITIES
WM ACAT Responsibilities
The WM ACAT department will be responsible for the following: Accepting the ACAT request. Gathering rejects. Uploading NSCC ACAT file to Launch Pad. Liaising with appropriate branches to provide resolution to Euroclear settlement issues. ACAT Reversals - Approving reversals - Entering ACAT reversals on NSCC - Advising IB C&S Support (ACAT Group) of ACAT reversal so that IB can reflect the reversal on ADP - Advising IB Intl FI Ops of ACAT reversal so the instruction can be removed from Euroclear - Blocking accounts on reversed ACATS
IB International Fixed Income Responsibilities
IB Intl FI Ops is responsible for: Monitoring the pending receipt/delivery of ACAT transfers in Euroclear. Liaising with contra firms regarding unmatched transactions to determine reason for the delay. Escalating unmatched transaction to WM ACAT department for the following reasons: - Contra firm does not recognize the ACAT transfer - Movement of securities is restricted to specific lot sizes Reporting the outstanding ACAT fails to WM ACAT department on a daily basis. Maintaining the accuracy of settlement data in the ACAT broker table in [REDACTED]. Notifying [REDACTED] IT (support) with new/updated settlement instructions to be entered into ACAT broker table. ACAT FLOWS WM receives the ACAT instruction from the client and notifies NSCC. NSCC sends an acknowledgement to the WM ACAT group. WM sends the ACAT file to Launchpad. Launchpad sends the ACAT transfer details to ADP. Launchpad sends the instructions to [REDACTED]. [REDACTED] sends instructions to Euroclear. Upon settlement, Euroclear sends a settlement confirmation to [REDACTED].
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[REDACTED] queries ADP CAGE to locate the tag number for the ACAT. If a tag number is found, the ACAT is cleaned up in ADP. If a tag is not found, the ACAT settlement is reported on the [REDACTED] exception report. IB Intl FI Ops will manually cleanup the trade in ADP.
EXCEPTIONS If the ACAT comes over with the security ID field blank, it will require manual setup by WM ACAT dept and IB C&S Support (ACAT Group). WM ACAT will notify IB C&S Support (ACAT Group) via email so the fail can be set up manually in ADP. IB C&S Support (ACAT Group) will notify IB Intl FI Ops so that instructions can be manually set up in Euroclear. With regard to ACATS which are manually instructed in Euroclear, when settlement occurs, IB Intl FI Ops will manually clean up the trade, as this transaction should appear on the [REDACTED] exception report.
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REDACTED] Policy & Procedural Changes International Fixed Income
Appendix D: Trade Flows for non-USD, [REDACTED] and PB

[REDACTED]
Figure 10: Trade Flow of Non-USD
On Trade Date, the following occurs: (1) WM trades for Non-USD are entered through [REDACTED] front-end system. (1) WM Prime Brokerage trades are entered through [REDACTED]. (2) WM trades are fed to [REDACTED] on a real-time basis. (3) WM Trades are fed to [REDACTED]. (4) [REDACTED] examines Master Files for static data set-up. (5) WM Blotter 91 (Agency) and 97 (Principle) are converted to IB Blotter 86 and 8Z. (6) Trade date postings, settlement postings, cleanups and journals are sent from [REDACTED] to ADP. ADP matches up positions and returns notification to Noahs Arc. (7) OMNI Postings are made in [REDACTED] and (8) [REDACTED] forwards instructions to EUCLID. On Settlement Date, the following occurs: (9) An acknowledgement of Settlement is available in EUCLID. (10) [REDACTED] grabs the settlement information. (11) Cleanup is performed at ADP. On Settlement Date + 1, the following occurs: (12) The ADP stock record is updated. (13) [[Stock record information is transmitted to EUCLID.]]
46
Figure 11: Trade flow of [REDACTED]
[REDACTED]
[REDACTED] Procedure changes: 1. 2. 3. 4. OET, Bookkeeping and Blotters will stay with WM. People dealing with Clearance and Settlement are going to [REDACTED]. Fails Report is coming from [REDACTED] Reconciliation performed between Clearance and Settlement in a C&S Support (take Omnibus on both sides). Blotter 91 and 96 convert to Blotter 86 and 97.
5.
Trade Flow on Trade Date:
1) TFI enters trades into [REDACTED] (1).

2) The Trade is sent to P&S via an overnight batch process. (1a) TFI is able to review the trade information on various bookkeeping systems the next day (1b).
3) The OET (2) routes the Trade to [REDACTED] (3). 4) [REDACTED] sends the trade to ADP (6), where it is
executed, confirmed with Noahs Arc and instructions are send to EUCLID (7).
5) A fail report (8) is sent by ADP to [REDACTED] .
47
Figure 12: Trade Flow of [REDACTED]
[REDACTED] changes: No changes for [REDACTED] except of usage of [REDACTED] by [REDACTED] personnel instead of WM.
Business is identical to TFI. Trade Flow on Trade Date: [REDACTED] Trade Desk uses Bloomberg and Martini Systems and enters trades into [REDACTED]. The trade is entered into [REDACTED] (1). The Trade is sent to P&S via an overnight batch process (2). The [REDACTED] Routes the Trade to [REDACTED] (3) [REDACTED] sends the trade to ADP (6), where it is executed, confirmed with Noahs Ark and instructions are send to EUCLID (7). A fail report is sent by ADP to [REDACTED].
48
Appendix E: Glossary
Term ACAT ACS ADP BTS ADP Cage BPSA COD (in ADP) COR (in ADP) Euroclear Definition Automated Customer Account Transfer Advisory Consultant Services Front-end trade processing system for ADP. Sets up tags for Receives and Delivers. ADP application. Cash On Receipt. Cash On Delivery. The world's largest settlement system for domestic and international securities transactions, covering both bonds and equities. Market owned and market governed, Euroclear provides securities services to major financial institutions located in more than 80 countries worldwide. Fixed Income Trading Application Foreign accounts. Foreign Securities Settlement System Journal Entry System Global Time Deposit Investment Bank. See also IB only on page 4. International Securities Identification Number which uniquely identifies a specific security issue. SWIFT Message Processor Application for feeding information to ADP, EC and [REDACTED] Trade Router Fail Monitoring Tool Purchase & Sales department. Prime Brokerage Securities where ownership is represented by paper certificates Product Reference Data Base (Static Data) Non-ACATS Movement System for WM Regional Institutional Sales See SBD. Settlement Account Reporting System Bookkeeping Daily. WM system for books and records. In this document, also referred to as WM Mainframe [REDACTED]. Settled Cash On Delivery trade.
[REDACTED] FO accounts [REDACTED] [REDACTED] GTD IB ISIN [REDACTED] [REDACTED] OET [REDACTED] P&S PB Physicals [REDACTED] RETA RIS [REDACTED] SAR SBD
SCOD
49
Term [REDACTED]
TFI WM WM Mainframe [REDACTED]
Definition Service Track Application Request system. This is a Notification (Case routing) system used for transactions from [REDACTED] branches involving a straight transfer. Taxable Fixed Income Wealth Management. See also WM only. See SBD on page 4.
50
Appendix F: Table of Figures

FIGURE 1: END TO END TRADE FLOW FOR WM INTERNATIONAL EUROCLEAR TRADES...................................................................................................................................................1
FIGURE 2: [REDACTED] SCREEN ADVISING FAIL REASON...............................................19
FIGURE 3: CURRENCY VALUE IN COMMENTS FIELD............................................................21
FIGURE 4: SEG ANALYSIS...............................................................................................................27
FIGURE 5: INDIVIDUAL [REDACTED] CASE PAGE...................................................................38
FIGURE 6: [REDACTED] CASE DETAIL PAGE 2.........................................................................39
FIGURE 7: EUCLID INSTRUCTION SCREEN 1ST SCREEN...................................................40
FIGURE 8: EUCLID INSTRUCTION SCREEN - EUCLID INSTRUCTION SCREEN 2ND SCREEN.................................................................................................................................................40
FIGURE 9: [REDACTED] CASE JOURNALS..................................................................................42
FIGURE 10: TRADE FLOW OF NON-USD......................................................................................46
FIGURE 11: TRADE FLOW OF [REDACTED]...............................................................................47
FIGURE 12: TRADE FLOW OF [REDACTED]...............................................................................48
51
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[REDACTED] Policy & Procedural Changes International Fixed Income

TABLE OF CONTENTS PREFACE ............................................................................................................................................IV

APPENDIX B: ADP ACCOUNTS FOR SECURITIES AND CASH...............................................43

DOCUMENT VERSION 3.1

[REDACTED] Policy & Procedural Changes International Fixed Income

APPENDIX C: ACAT RESPONSIBILITIES AND FLOW.............................................................44

APPENDIX D: TRADE FLOWS FOR NON-USD, [REDACTED] AND PB..................................46

APPENDIX F: TABLE OF FIGURES...............................................................................................51

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Conventions Used in the Document Convention

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1.1 Trade Flow

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Trade Booking and Feeds for USD Trades

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This is discussed on page 6.

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Flow of Settlement Transactions

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2. Processes and Procedures (Fixed Income Euroclear Settlements)

2.1 Report Generation Procedures

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See page 10.

See page 10.

See page 10.

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When Generated Start of Day

Generation Procedure See page 10.

See page 10.

See page 10.

Between 8 & 9 AM Between 8 & 9 AM Between 8 & 9 AM

Emailed from [[REDACTED]] Emailed from [[REDACTED]] Emailed from [[REDACTED]]

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When Generated Start of Day

Generation Procedure See page 10.

Daily Fail Report

See page 10.

[REDACTED] Trade Cleanup Report Currency Balance Report

Emailed from [REDACTED].

DMS Reports DMS Instructions WM (Euclid) Report

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When Generated Start of Day

Generation Procedure See page 10.

SEG Move List