No.	444
Date:	January 6, 2005
To:	All Members
From:	Jeffrey F. Ingber
Subject:	Closure of EMCC

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This Important Notice is to formally communicate DTCC’s decision to discontinue the operation of the Emerging Market Clearing Corporation (EMCC) by the end of the first quarter of 2005.

This decision follows extensive discussions with the participants of EMCC as well as with EMTA and our regulators over the last year. It also follows an exhaustive effort to determine if there were alternatives to closure, including adding new members and the extension of new services that would make EMCC more economically viable and self-sustaining. Regrettably, market conditions have changed, and EMCC has experienced a steady and sustained decline in its trade volumes. Today, EMCC’s volume is down to an average of approximately 300 trades (600 sides) daily.

Since its inception, EMCC has provided significant benefits to its members through straight through processing and reduction of risk associated with post-trade processing of Brady Bonds and other emerging market debt instruments. EMCC also demonstrated our ability to quickly bring a solution to a unique market segment, by focusing on the emerging markets our expertise and technology as a central counterparty (CCP) serving the equities and fixed income markets. Despite these benefits, however, EMCC was never able to capture a sufficient part of the market to sustain itself.

The decision to discontinue EMCC operations was reviewed and approved by DTCC’s Board of Directors late last year. DTCC has worked with EMTA to provide time to find an alternative CCP. Following the closure of EMCC, DTCC management will continue to support the efforts of EMTA in the selection of an alternate central counterparty for emerging markets debt transactions, and in the implementation of such CCP services.

Below is a timeline of critical dates between now and the final close of EMCC on March 31. EMCC members should begin their planning process to make any required operational, risk management, or credit changes to meet these dates:

Date	Action
February 15, 2005	Last trade input date.
February 23, 2005	Final date for settlement of transactions. (Note: Any transactions that remain open will be exited by EMCC, and re-assigned to the original counterparties to the trade.)
February 24, 2005	EMCC exits any remaining failing positions. (Note: EMCC will exit the fail positions by submitting cancel instructions to Euroclear. The fail transactions will be re-assigned to the original counterparties to the trade, who will then need to take such actions as are appropriate to settle the transactions.)
March 20, 2005	Last EMCC billing date. (Note: EMCC will debit members’ Euroclear accounts for the final bill amount.)

EMCC anticipates that members’ clearing fund deposits will be returned by March 31, 2005.

Questions or comments concerning this notice may be directed to Loretta Stack at +1 212-855-1681, or lstack@dtcc.com.

Jeffrey F. Ingber
Chief Operating Officer