Securities Market Infrastructures ALF Conference 2009 Santiago, Chile. October 9 th 2009

Transcription

1 Securities Market Infrastructures ALF Conference 2009 Santiago, Chile October 9 th 2009

2 Definition of SMIs for SWIFT Securities Market Infrastructures (SMIs): institutions, providing utility services to participants in the securities markets facilitating the efficient processing of securities transactions. They include: 1. Stock exchanges, MTFs 2. Matching Utilities 3. Clearing Houses/Central Counterparties 4. Central Securities Depositories 5. Regulators/Financial Authorities 6. Registrars 2

3 Industry Challenges - CSDs Constant demand to increase operational efficiency, CSDs and their communities must embrace best practices and standards in line with the recommendations of the G30. The communities the CSDs serve want to see costs and risks being reduced and service levels rising. They don t want to have to build and maintain multiple connections to different market infrastructures. The CSDs communities are pushing their market infrastructures to offer commoditised services on an outsourced basis, and at the same time competitive pressure is forcing CSDs to rise up the value chain, developing new capabilities in areas such as asset servicing and issuer services. 3

4 SWIFT for CSDs SWIFT provides a complete and proven solution to support communication between central securities depositories (CSDs) and their communities SWIFT s offering spans all the services CSDs provide, including settlement, investor and issuer services, financing and information services CSDs can offer SWIFT as a highly secure and resilient channel for communication not just for cross-border business but for domestic business also With SWIFT CSDs can support their communities adoption of global standards, enabling them to reuse their existing SWIFT infrastructures This helps the communittee to reduce costs, improve operational efficiency and benefit from economies of scale 4

5 Main Services of a CSD Issuer Services: Shareholder/ownership Central registrar Issues/offerings Numbering agency (ISIN) Income/Corporate Actions AGM services Investor Services: Safekeeping of securities CA processing Registration of rights Account transfers Inheritance services Tax reporting Portfolio management Clearing & Settlement: CCP service (optional) Multilateral netting Delivery versus Payment Securities Lending 5

6 Typical CSD workflows Large Medium Small Settlement Management Safekeeping Depository Function Asset Servicing Central Registrar Registrar flows Issuers, issuer agents Shareholder statements asset servicing Asset Servicing flows Custodians Corporate Action notifications, instructions, confirmations, proxy voting Reporting Support Admin 6

7 SWIFT Offering Flows Evolution Offering Clearing From internalized to multi-counterparties ISO (MT54X) on FIN or Proprietary on FileAct or InterAct Settlement Concentration of the flows and internationalization ISO (MT54X) on FIN or Proprietary on FileAct or InterAct and Browse (GUI) Asset Servicing New service required by participants ISO (MT56X) on FIN or Proprietary on FileAct or InterAct) Payments Real DVP ISO (cat 2) on FIN or Proprietary on FileAct or InterAct Registrars Standardization for international players ISO on FIN or Proprietary on FileAct or InterAct) or ISO Regulatory More regulations to come ISO on FileAct(MiFID) 7

8 Securities Market Pre-trade / Trade Post-trade Corporate actions Buyer Presettlement Presettlement Reconciliation Proxy voting Seller Corporate actions Reconciliation Custodian Settlement Reconciliation CSD Settlement Reconciliation Clearing agent 8

9 SWIFT Support for Corporate Actions Messaging ISO global messaging standards with comprehensive coverage of event types Market practice consistency and compliance can boost data quality, increase STP Minimize manual processing steps Reduce risk of claims SWIFT Simulation Testing and Qualification Service (STaQS) Involvement of Issuers in process Investment/Asset Managers moving away from proprietary custodian portals, want to integrate SWIFT messaging Middleware will be critical for migration to ISO MX ISO CA and Issuer Agent MX live in Closed User Group 20 Nov 2010 (ITB activation on 1 May 2010) Coexistence will be reality for larger customers very quickly SWIFT will define interoperability services in coming months

10 Corporate Actions Solution - Market Demographics Traffic 2008 SWIFT 2008 Global CA messaging by sent location YEAR msg M 21% 53M 18% 45M 26% %growth 75M 14.3% 35M 18% 30M 22% 25M 36% 18M Growth traffic growth YTD is about 7% in spite of flat or negative growth in other messaging 10

11 FpML Derivatives Automated trade notifications (IM to custodian / accounting agent) Timely confirmations between dealing institutions All ISDA OTC derivatives products FpML has become the de facto standard in the derivatives business InterAct FpML messaging 11

12 Current Status Release 2.2: live July 09 FpML notificatons & confirmations (versions 4.2 and 4.4) ISO payment and cash reporting messages Live with 4 major IMs (a.o. BGI) and 4 major custodians (BNY Mellon, State Street, BBH, Northern Trust) Release 3.0 FpML 4.6 Additional messages Concurrent with 4.2 & 4.4 Testing:Jan 2010, live: April

13 SWIFT Solution Toolkit for CSDs STaQS Accord for Securities (future) MT-MX ISO ISO Non-ISO (proprietary, FpML,..) Support Partners, Training Integration (BAP) Project management Hosting services Closed user group with centralized billing FIN FileAct InterAct Browse Instructions Confirmations Statements CA reporting Coll Mgmt (ISO only) Putting legacy file transfer on SWIFTNet (proprietary formats or ISO or ISO 20022) Putting legacy messaging on SWIFTNet (proprietary formats or ISO or ISO 20022) Putting legacy screen-based access on SWIFTNet Alliance access Alliance Gateway Messenger, WebStation Connect Silver or Gold SNL, HSM, PKI certificates Integrator + for CSD participants Alliance Entry Starter Set Kits, Lite Connect Bronze Service Bureau Member concentrator 13

14 Alliance Integrator An integration framework for SWIFT Business application Business data Business data Orchestration for Business Process Transform Capture Business validate data and route Dispatch Business Data Transform, validate and route Integration Features Add SWIFTNet Header and send to SWIFTNet Receive from SWIFTNet SWIFT Messaging SWIFT Messaging Alliance Access Integrator Information Reference Data 14

15 Benefits Align with global standards and best practices Enable reuse of existing SWIFT infrastructures Highly secure and resilient channel for communication for cross-border and domestic business Support value-added services Reduce costs and risks Improve straight-through processing 15

16 Success Stories Euroclear UKI (CREST) STRATE EUROCLEAR NL Service Since 1996 Market share: 60% Since 1999 Market share: 98%. Since 2003,new setup Market share: 90% Offering Proprietary formats on InterAct + GUI available on IP ISO on FIN + Strate service bureau for brokers ISO on FIN + GUI available via Browse Success reasons Outsourcing CSD decision Support of key players Complete new customized solution Local support Interest of Strate to implement ISO ahead of the market Support of the Strate community Support of the Necigef community (mainly banks) File solution of Necigef not reliable 16

17 SWIFT Role & Contact Information SWIFT Latin America is here to help the markets evolve towards best practices and international standards that both bring efficiency by making them more attractive for international players and investors. For more information please contact John Taboada: Phone: or

18 Thank you 18