Component of the cleavage and polyadenylation specificity factor (CPSF) complex that play a key role in pre-mRNA 3'-end formation, recognizing the AAUAAA signal sequence and interacting with poly (A) polymerase and other factors to bring about cleavage and poly (A) addition. Has endonuclease activity, and functions as mRNA 3'-end-processing endonuclease. Also involved in the histone 3'-end pre-mRNA processing. U7 snRNP-dependent protein that induces both the 3'-endoribonucleolytic cleavage of histone pre-mRNAs and acts as a 5' to 3' exonuclease for degrading the subsequent downstream cleavage product (DCP) of mature histone mRNAs. Cleavage occurs after the 5'-ACCCA-3' sequence in the histone pre-mRNA leaving a 3'hydroxyl group on the upstream fragment containing the stem loop (SL) and 5' phosphate on the downstream cleavage product (DCP) starting with CU nucleotides. The U7-dependent 5' to 3' exonuclease activity is processive and degrades the DCP RNA substrate even after complete removal of the U7-binding site. Binds to the downstream cleavage product (DCP) of histone pre-mRNAs and the cleaved DCP RNA substrate in a U7 snRNP dependent manner. Required for the selective processing of microRNAs (miRNAs) during embryonic stem cell differentiation via its interaction with ISY1. Required for the biogenesis of all miRNAs from the pri-miR-17-92 primary transcript except miR-92a. Only required for the biogenesis of miR-290 and miR-96 from the pri-miR-290-295 and pri-miR-96-183 primary transcripts, respectively.