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	C O N T E  N T S   Review of 2003 CLS and Citibank New York SSI Settlements Directory CLS for Funds, Custodians and Fund Managers Citibank CLS 2004 Road Map		Dear Citibank® CLS™ Settlement Services Customer, This document will bring you, our customers, up to date with recent events within the Citibank CLS Settlement Services world and exciting 2004 enhancements for both Citibank and CLS. Review of 2003 Citibank CLS achieved a number of major milestones in 2003, the first full year of operations for CLS. New technology enhancements and platform stabilisation has been evident throughout the year. Citibank CLS successfully integrated four new currencies to the foray with ease in September. See the 2004 Road Map for upcoming currencies to reduce your settlement risk even more. CLS Bank volume targets have been achieved with regular frequency since September 2003, and from the current daily average of c.90, 000 trade sides, the projection is that a level of c.180, 000 trade sides each day will be achieved by Q2 in 2004. CLS is averaging $1 trillion settlement daily, with the peak value reaching $2.175 trillion on the 20th January 2004. Citibank processes about 20% of the Third Party market share from its 21 live clients, including the first CLS User Member. The outage that CLS suffered on 25th March 2003 impacted all Third Parties and Settlement Members with trades valued for that day. What this day echoed, was the resilience of CLS community and the agreement of conformity was that balances of unsettled trades were resubmitted for next day value. The experiences from this event have shaped new contingency procedures for CLS and the respective Settlement Members. back to top CLS and Citibank New York Citibank New York has been Operationally Approved by CLS Bank and will bilaterally agree with each of their trading counterparts, prior to settling through CLS. They will begin settling CLS transactions with a number of there counterparts from 1st March 2004. Citibank London, Singapore, Tokyo, Hong Kong and Sydney have been efficiently processing CLS related transactions with many of you for quite some time; the addition of Citibank New York will truly optimise your CLS process. We do appreciate your patience. back to top SSI Settlements Directory The CLS endorsed the SSI Settlements Directory, which has been up since late summer, currently has over 30 Settlement Members and affiliate branches plus 25 Third Parties. Citibank and SSI legal teams have now approved the ‘Agreement’ document and detailed information to follow shortly. You, the customer will have view only rights to the application. back to top CLS for Funds, Custodians and Fund Managers The next wave of CLS participants will be fund managers including custodians, pension funds and asset management divisions of banks and insurance companies. These fund managers will benefit significantly from CLS, and their volumes are expected to be second only to CLS shareholder volumes by 2007. Citibank was Operationally Approved by CLS as a Counterparty in early December and will progress with its operational approval as a Custodian with the next scheduled CLS Bank cycle. The first Custody trades handled by CCSS are expected to settle in Q2 2004. CLS Bank have been testing and trialing the new Custody functionality for over a month with a number of Settlement Members who are both Counterparties and Custodians. back to top Citibank CLS Road Map Citibank will be involved in the Custody Test and Trialling throughout Q1 and Q2 2004 (No customer requirement) The 1.16 CLS gateway will be promoted to the Citibank environment in March (No customer requirement) New CLS Currencies - the Hong Kong Dollar, New Zealand Dollar, Korean Won and the South African Rand - are set to be implemented in November 2004. CCSS will have approximately four application upgrades throughout the coming year; one or two or these upgrades may require some additional testing from the customer but clients will be notified well in advance of any dates. back to top
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