July 26, 2001

Market data vendors and institutional users are looking to the ANNA Service Bureau (ASB) to assist with the licensing, redistribution, customer support and contractual administrative issues associated with access to and usage of primary security identifiers. The purpose of the meeting was to review the role of the ASB as a commercial facilitator for the NNAs and to review the commercial terms and conditions proposed in the draft ANNA/ISIN Electronic Distribution Agreement (joint licensing agreement).

Core Operating Principles

FISD members have proposed a number of commercial operating principles for consideration by the ASB including:

1. The importance of the ASB acting as a centralized administrator for all NNA contracts regardless of their individual terms and conditions. The overall objective is to avoid complex or non-available bilateral agreements -- but with terms that are (at a minimum) no worse than those associated with existing agreements.
    
2. The importance of pricing, data usage and commercial transparency as well as the maintenance of a level playing field among all recipients of primary security identifiers.
    
3. The importance of a business model that simplifies the acquisition, redistribution and usage of primary identifiers and supports the objectives of T+1 and straight-through processing. In essence, FISD members are supporting the implementation of commercial terms and conditions for core identification that promotes, rather than impedes commerce. Early in this process, FISD members proposed, and continue to support, levels of commercial terms based on the use of the data:

• Level 1: The identification component of the ASB feed (the ISIN) should be unrestricted and the core ISIN should contain all data elements required for unique identification.
   
• Level 2: ISIN plus the additional data elements incorporated into the ASB feed. Members maintain they will continue to get direct feeds from many of the NNAs and will use the ASB feed primarily for validation of unique identification.
   
• Level 3: Full ASB data set including cross-reference data and any other value-added information added in the future.

Draft ASB Distribution Agreement

Market data vendors appreciate the challenges and difficulties associated with the creation of a single licensing agreement incorporating the various bilateral requirements of 65 National Numbering Agencies.

The ASB initial approach was to use a modification of the existing S&P/CUSIP license agreement -- under the assumption that because it incorporated the most stringent commercial requirements of any NNA, it would be acceptable to all NNA's. And while that approach was satisfactory to the NNA's, it was not supportable by market data vendors or other redistributors.

Vendors were extremely clear that they would not be able to support a "global licensing solution" that conflicted with existing agreements or one that imposed more restrictive terms and conditions on the use of primary security identifiers.

Next Steps

The vendor community proposed the following approach for consideration by the ASB Advisory Committee:

1. Maintain the current bilateral licensing structure in the short-run. Continuation of the contractual status quo would allow ANNA to make the transition from GIAM 2 to the ASB feed and would not disrupt the migration process or timetable.
    
2. Provide clarification and a definitive list outlining (a) which NNA's currently accept and use the GIAM 2 form agreement, (b) which NNA's require bilateral agreements, and (c) which NNA's are still in the process of deciding their licensing requirements.
    
3. Have the ASB immediately act as a central facilitator and single point of contract negotiation for the NNA's that require bilateral license agreements.
    
4. Allow the vendors to propose a consolidated license agreement for consideration by ANNA and the NNA's. The vendors would like the opportunity to evaluate the full range of existing license agreements with the expectation that they could recommend a single form agreement, with addenda, that would:

• Incorporate the existing commercial requirements of the NNA's,
• Address the licensing requirements of new redistributors,
• Be extensible for additional NNA's requiring a license agreement and
• Accomplish the objectives of administrative simplification.

The vendors further suggested the critical importance of promoting and maintaining an ongoing dialogue with the ASB and the NNA's on licensing terms and conditions. The hope is that a new business model could be established that would both recognize and protect the commercial requirements of the NNA's and promote open redistribution that supports global commerce in the new age of business process automation.