The OCC would provide clearinghouse services for all securities lending transactions submitted through Quadriserv's AQS securities lending platform, bringing market structure, transparency and efficiency to borrowers and lenders of securities.

AQS will operate an electronic, centralized securities lending platform for domestic equities, for which OCC would act as the central counterparty to all securities lending transactions matched on the AQS platform. AQS will match lenders and borrowers using a hybrid auction and continuous price discovery mechanism. The resulting matched loans would then be processed through the OCC, which would provide central counterparty guarantees and anonymity. Post-transaction reporting capabilities would include real-time reporting of executed transactions, stock and cash movements through the Depository Trust Company (``DTC''), as well as record keeping and reporting via industry standard formats.

Gregory W. DePetris, Co-Founder of Quadriserv, commented, "Recent market events have focused attention on the complexities and deficiencies of the over-the-counter securities lending market and short selling. As part of this process, a broad consensus has emerged that the securities lending market must evolve toward a more transparent, efficient, and centralized model. To that end, our extensive work with the OCC to operate as a central counterparty promises to transform the industry. As the world's largest equity derivatives clearing organization, OCC has earned the confidence of market participants globally, and we look forward to growing our securities lending platform in partnership with them. On behalf of the entire Quadriserv organization, I want to thank OCC, as well as DTC, for their cooperation, guidance, and tireless commitment to the launch of this important capital markets innovation."

"AQS's two-year development effort was accomplished in collaboration with industry participants including custodial lenders, agent lenders, prime brokers, traditional broker/dealers, hedge funds, market makers, regulators, academics and industry leaders," added Bruce Turner, Quadriserv's Chief Operating Officer. "This work is culminating in what we believe to be the best possible model to service the future of the securities lending business by reducing systemic risk and enhancing transparency and marketplace efficiency. We look forward to commencing initial operations of this industry utility in early 2009, with market-wide testing beginning imminently."