Possibilities of CSD business expansion in Asia and JASDEC s approaches for service diversification

Transcription

1 Possibilities of CSD business expansion in Asia and JASDEC s approaches for service diversification ACG15 Session2: Panel 2 Competing for Collaboration November 3, 2011 Yoshinobu Takeuchi Chairman of Japan Securities Depository Center, Inc.

2 Possibilities of the business expansion under the competitive collaborated landscape 1. Global Environments 1. World economy, regional weight changes > financial flow growth would widen cross-border transactions 2. Requests from (global / regional) players needs 3. Other infrastructures merger and tie-up cause more competition 4. Lehman shock and new sovereign risks Trends 1. Cross-border transaction integration (STP, linkage, network) in Europe & U.S. widen to emerging markets 2. Multi-dimensions among Trade-Clearing-Settlement 3. CSD s activities getting wider 4. New regulations (CPSS-IOSCO) (European Commission) 2. Regional 1) Europe 2) U.S. 3) Asia 1. EU integrations (single market, currency, ECB/T2) 2. Giovannini, MiFID 3. T2S 4. Greek problem 1. Wide & variety needs of global players 2. Exchange & clearing integration with Europe 3. Necessary framework of market soundness (new risk management, new regulation) 1. Different environment other than Europe or U.S. 2. Common global agenda of the market on the stage of each market development 3. As economy develops fast, huge financial needs increasing inflow to the region 4. As wage up, needs for STP come to be realistic 5. Non-core business of CSD s is different among CSDs in Asia 1. Cost reduction 2. CSDs non-core business: competitions between CSDs Custodians, ICSDs originated from custodians, some CSDs are also already custodians. Monopoly? Definitions of CSD role 3. Big CSDs activities going out of Europe 4. Measures for regulations. Influence from new financial turmoil 1. Wider activities of DTCC crossing Atlantic ocean 2. Collaboration with South American CSDs 3. Worldwide surveillance scheme for derivatives (TIW, TD) 1. Each market is keen to develop market infrastructure 2. Initiative to remove barriers for cross-border transaction initiative is undergoing (ABMI-ABMF) 3. Some markets link regionally (ASEAN Trading Link) 4. Common Issues of non-core business in Asia is under analysis and discussion in ACG (Corporate Action, etc.) Two types of CSD account: individual or aggregate investors a/c 4) Other region Some initiatives are undergoing for collaboration between or among CSDs regionally or cross-region WFC (World Forum of CSDs) can follow and analyze these issues worldwide 1

3 Appendix Items of non-core business of CSDs (at random) Common (relatively) 1. Securities lending, collateral management (settlement facilitating) 2. Banking type services 2-1. For settlement (cash account, credit) 2-2. For corporate action (pre-financing for payment, tax reclaim) 3. Corporate action 4. Issuer services (shareholder registration at issuer CSD) 5. Client services (safekeeping, custody-like services at investor CSD) 6. Trade information warehouse / repository (derivatives) * 1 ~ 5: Six categories proposed on the public consultation paper by European Commission Specific 1. Investment fund management 2. Insurance or pension fund management 3. Loan management 4. Tax data management 5. Investor's data or information service 2

4 Service Diversification of JASDEC Tokyo Market Environment 1. Already globalized at volume 2. National economy matured, financial investment abroad will increase Agenda 1. Continue to reform the national market structure (quality upgrade, standardized) 2. Commitment to the regional, global agenda (bilateral, multilateral) 3. Strengthen global competitiveness and collaboration JASDEC 1. Corporate governance structure (userparticipants orientated) 2. Legal framework a) Dematerialization - center of shareholders rights base network b) Non-core business should have no risk to core business 3. Relatively small portion of non-core business (compared to other CSDs) 1. Contribution to the market agenda (efficiency of cross-border transactions) 2. Respond to the potential needs (especially come from cross-border procedures) of market players 3. Soundness of the financial base as CSD 4. Commitment to the regional, worldwide CSD activities 3

5 Expanding the business range of JASDEC Upgrading and expanding the businesses under the user-orientated governance Within the range of governance, flexibly built the framework to streamline the overall market As a CSD, collaborate with participants when their needs and benefits meet the framework Reinforcement of global competitiveness of Japanese markets Competing with Business Pre-Settlement Matching System (2001~) General Shareholders Notice - Shareholders identification service (2009~) DVP Settlement for Stock Lending and Borrowing (2014~) Non-resident transaction & investment support service (matching) for foreign securities (2014~) Promotion of efficiency in CA information collection/distribution (under consideration) Streamline of the cross-border settlement operation (under consideration) Collaboration with business or other CSDs for the efficiency of the market Harmonization through collaboration or role sharing with business world 4

6 CSD Linkage between KSD and JASDEC (200) Features of the KSD-JASDEC linkage (November 2007~) The only linkage which JASDEC builds in the Asia-Pacific region The book-entry transfer of 200 for Japanese financial institutions and investors is available through the account books managed by JASDEC and its participants In accordance with Korea-Japan Tax Treaty, the reduced tax rate will be applied to the Japanese investors when they receive the dividends of 200 Linkage outline Commercial Bank JASDEC A/C (Cash) Participant A A/C KSD Book-entry transfer JASDEC A/C JASDEC Participant A A/C Buy Sell KRX TSE 5

7 Thank You 6