Securities Worksession

Transcription

1 Securities Worksession WAMZ Business Forum Ian Bessarabia WAMZ Regional Country Manager August 2011

2 Our choice for today Accord SWIFT services for Securities Markets Funds Standards Asset Servicing Services for CSD's

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4 Africa: Ripe for reappraisal "With many of its 48 economies rebounding from the crisis faster than the rest of the world, sub-saharan Africa is increasingly viewed as an opportunity rather than a burden. It is rising rapidly up the agenda for global investment managers and is talked about as never before in almost every big financial centre". Financial Times 18 May 2011

5 Africa accounts for about 5% of global foreign direct investment flows. The mood and meetings are all about what is causing blockages for further investment Where are the best models in the world for getting customs to work, how do we improve our competitiveness? Maria Ramos, chief executive of ABSA Financial Times 18 May 2011

6 Create an environment where: Investor comfort is increased Investor risk is reduced Your market meets International Standards 6

7 Needs Meet G30 requirements (and shortly CPSS/IOSCO requirements) A market which meets the standards that foreign investors expect Infrastructure which is better suited to regional integration Risk reduction Cost reductions with automation 7

8 Business Flows and Market Participants from an Investment Managers perspective

9 Asset Class SWIFT Equities, FI Forex is Money Markets only Listed derivatives for OTC derivatives payments? Commodities Repos Syndicated Loans Cash Transaction cycle Trading (FIX Trade Capture Trading (FIX Pre-trade / trade and FIN) New! and FIN) Post-trade / presettlement Trade confirms Trade notification Trade confirms Trade notification, Affirmation Trade confirms Trade notification, Affirmation Trade confirms Trade notification Trade confirms Trade notification (FIN+FpML), Affirmation Trade confirms Trade confirms Pre-settlement matching Allocation processing as well as confirmation matching, SSI New! Clearing & Settlement Settlement & Reconciliation Settlement & Reconciliation CLS 3rd Party service Settlement & Reconciliation Settlement & Reconciliation (FIN+FpML) Settlement & Reconciliation Settlement & Reconciliation Agent notices, Credit agreement, Rollover (FpML) Payments Cash management Cash reporting Cash settlement Cash reporting Cash settlement Cash reporting Cash reporting Cash reporting Cash reporting Cash reporting Exception Management Asset servicing & Administration Portfolio Administration Collateral management Data distribution Data distribution Corp. Action Corp. Action (Corp. Action) Proxy voting Total Portfolio Valuation (TPV) New! Collateral Management Collateral Management New! Portfolio Reconciliation New! Agent notices (FpML - EOC CUG, DTCC) Securities Financing Securities Financing New! Securities Financing New! Regulatory Reporting Transaction Reporting Transaction Reporting Transaction Reporting Transaction Reporting Planned solutions Available Solution

10 Asset Class Transaction cycle Equities, FI Forex Money Markets Listed derivatives OTC derivatives Commodities Repos Syndicated Loans Cash Pre-trade / trade Trading (FIX and FIN) Trade Capture New! Trading (FIX and FIN) Post-trade / presettlement Trade confirms Trade notification Trade confirms Trade notification, Affirmation Trade confirms Trade notification, Affirmation Trade confirms Trade notification Trade confirms Trade notification (FIN+FpML), Affirmation Trade confirms Trade confirms Pre-settlement matching Allocation processing as well as confirmation matching, SSI New! Clearing & Settlement Settlement & Reconciliation Settlement & Reconciliation CLS 3rd Party service Settlement & Reconciliation Settlement & Reconciliation (FIN+FpML) Settlement & Reconciliation Settlement & Reconciliation Agent notices, Credit agreement, Rollover (FpML) Payments Cash management Cash reporting Cash settlement Cash reporting Cash settlement Cash reporting Cash reporting Cash reporting Cash reporting Cash reporting Exception Management Asset servicing & Administration Portfolio Administration Collateral management Data distribution Data distribution Corp. Action Corp. Action (Corp. Action) Proxy voting Total Portfolio Valuation (TPV) New! Collateral Management Collateral Management New! Portfolio Reconciliation New! Agent notices (FpML - EOC CUG, DTCC) Securities Financing Securities Financing New! Securities Financing New! Regulatory Reporting Transaction Reporting Transaction Reporting Transaction Reporting Transaction Reporting Planned solutions Available Solution

11 Messaging Standards for the Securities Markets

12 Standards Do you care?

13 No standards or many standards Cost Errors Risk Poor service Unhappy customers

14 SWIFT standards SWIFT sets standards to create a common language for international financial transactions To Improve automation Reduce risk Reduce errors Generate cost savings SWIFT message standards are recognised by the International Organisation for Standardisation (ISO) SWIFT works with the financial community to coordinate standards convergence worldwide and avoid unnecessary duplication

15 Increase market practice

16 Why does it matter - Market practice consistency and compliance improves data quality and STP Market practice, integrated with standards, is essential for STP Securities Market Practice Group (SMPG) 39 Countries participating with national market practice groups Provides guidance to improve message quality Market Practice documents Event Interpretation Grid (EIG) Guidelines for placement and usage of dates, periods, prices and rates Event message examples Unique Event Reference approach More at::

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18 Securities Market Infrastructures

19 SWIFT Reach: > 9300 financial institutions Pension providers Banks Custodians Investment Managers Brokers-dealers Fund Administrators / Registries SWIFT Securities Market Infrastructures Insurance Companies ETC Providers Corporates Payment Market Infrastructures Fund Supermarkets

20 What are SMIs for SWIFT? Securities Market Infrastructures (SMI) Institutions, providing utility services to their participants in the securities markets facilitating the efficient processing of securities transactions. They include: Stock exchanges Matching Utilities Clearing Houses / Central Counterparties Central Securities Depositories Regulators / Financial Authorities Registrars

21 Securities Market Infrastructures on SWIFT >80 institutions from 50 countries Argentina Caja de Valores Hungary Keler Russian National Clearing Centre Armenia Central Depository of Armenia Indonesia KSEI Federation Depository Clearing Company Australia Australian Securities Exchange Ireland Euroclear UK&Ireland The National Depository Center Austraclear Israel Tel Aviv Stock Exchange Singapore The Central Depository (pte) Ltd Austria OeKB Italy MTS Monetary Authority of Singapore Belgium Euroclear Belgium CCG Slovakia CDCP Euroclear Bank Monte Titoli Bank of Slovakia MTS Japan Jasdec Slovenia KDD National Bank of Belgium Bank of Japan South Africa JSE Ltd Brazil CBLC Kazakhstan Kazakhstan Stock Exchange Strate Bulgaria CDAD Central Securities Depository Spain MTS Bulgaria National Bank of Bulgaria Kenya Central Bank of Kenya MEFF Canada CDS Korea Korea Securities Depository Iberclear Chile Deposito Centrale de Valores S.A. Kuwait Kuwait Clearing Company Sri Lanka Central Bank of Sri Lanka Croatia SKDD Latvia NASDAQ OMX (LankaSecure) Czech CSD Prague Central Depository Sweden NASDAQ OMX Republic Bank of Latvia Euroclear Sweden Denmark NASDAQ OMX Lebanon Midclear Central Depository Switzerland SIX x-clear VP Lithuania NASDAQ OMX SIX SIS Estonia NASDAQ OMX Luxemburg Clearstream Banking SA Taiwan TDCC Estonian Securities Depository LuxCSD Thailand Thailand Securities Dep Co Ltd Egypt MCSD MISR Mexico SD Indeval Turkey Takas Bank Finland NASDAQ OMX Netherlands MTS United ICE Futures europe Euroclear Finland EMCF Kingdom London Stock Exchange France Euronext Paris Euroclear Nederland EuroCCP MTS LCH.Clearnet LCH.Clearnet New Zealand NZX Ltd Euroclear UK&Ireland Euroclear France NZClear USA Chicago Mercantile Exchange Germany MTS Norway VPS Option Clearing Corporation Eurex Clearing Poland KDPW OMGEO Clearstream Banking AG Portugal Interbolsa DTCC Greece Hellenic Exchange SA Banco de Portugal Federal Reserve Bank Bank of Greece Qatar Doha Securities Market Zimbabwe Reserve Bank of Zimbabwe Hong Kong WAMZ HK Exchange Business Forum and Clearing -August 2011 Romania Depozitarul Central HK Monetary Authority (CMU)

22 CSD business conducted over SWIFT Core functionality: Instructions Status reporting Confirmations Statements Corporate Actions Link with NCB Borrowing/Lending Non-core functionality General payments CSD-CSD links Funds processing

23 Single Window using SWIFT Same Standards, Messaging and Connectivity SMI Participant Securities Market Infrastructures

24 Citi s Global Footprint for SWIFT Connectivity North America USA Canada Mexico South America Argentina Bahamas Brazil Chile Dominican Rep. Guatemala Colombia Costa Rica Ecuador El Salvador Haiti Honduras Jamaica Panama Paraguay Peru Puerto Rico Trinidad & Tobago Uruguay Venezuela Europe Austria Belgium Bulgaria Channel Islands Czech Republic Denmark Finland France Germany Greece Hungary Ireland Italy Kazakhstan Luxembourg Netherlands Norway Poland Portugal Romania Russia Spain Sweden Turkey Ukraine United Kingdom Slovakia 24 Middle East and Africa Bahrain Cameroon Algeria Congo Egypt Gabon Israel Ivory coast Jordan Kenya Kuwait Lebanon Morocco Nigeria Pakistan Senegal South Africa Tanzania Tunisia UAE Uganda Zambia Asia Pacific Australia Japan Malaysia New Zealand Singapore South Korea Thailand China Hong Kong Indonesia India Philippines Taiwan Vietnam Sri Lanka Bangladesh Brunei

25 Securities market: equities and fixed income Pre-trade / Trade Post-trade Corporate actions Buyer Presettlement Presettlement Reconciliation Proxy voting Seller Corporate actions Reconciliation Settlement Settlement Custodian Reconciliation CSD Reconciliation Clearing agent

26 SWIFTNet FIN: Settlement & Reconciliation Process CSD Trade Date Settlement Date MT Settlement Instruction MT 548 Status of Instruction MT 537 Pending Transactions CSD participant MT Confirmation of Settlement MT 535 Statement of Holdings MT 536 Statement of Transactions

27 CSD business using every SWIFT channel Application-to-Application One by one messaging (store & forward and query & response) File Transfer (push or pull) Human-to-Application Browser-based access and manual FT & message GUIs

28 Typical usage by Securities Market Infrastructures of SWIFTNet Messaging services FIN FileAct InterAct Browse Instructions Confirmations Status Statements CA reporting CA confirms Collateral Mgmt ISO only Putting new or legacy file transfer on SWIFTNet Proprietary formats, ISO or ISO Putting new or legacy messaging on SWIFTNet Proprietary formats, ISO or ISO Putting new or legacy screenbased access on SWIFTNET

29 Asset Example Servicing of a divider slide

30 Asset Servicing cycle Issuer XBRL Aligned w/iso Agent Investment or Fund Manager CSD ISO CA MX (DTCC) Proxy Voting MX ISO Global Custodian Sub-Custodian

31 What can go wrong with a corporate action? No Notification from counterpart Host System not Updated Positions not protected Pre-Decision Processing Missed Deadlines Trading shares not available Post-Decision Processing (Pre) Notification Record Date Record Date Instruction Deadline Registration Stock Available Research Ex Date Decision Deadline Acceptance Unconditional Pari Passu No Diary Entry Incorrect Information Positions Disagree Position Taken Late Decision Processing Incorrect decision applied Host system(s) not updated/updated incorrectly Trading shares not owned Courtesy Checkfree & Celent

32 Funds

33 What flows can you automate on SWIFT? End investors Platforms & fund supermarkets Portfolio managers Price report Institutional investors Distributor Transfer Agent Fund accounting agent (I)CSD (when applicable) Cash agents Distributor-side Payments Cash agents Fund -side Order placement (core fund business) Settlement Order placement & settlement, reconciliation, price report, transfer, account opening, cash forecast, corporate actions & fund-related payments

34 Accord

35 Accord: a SaaS family Same infrastructure different service structure Treasury (=Cat 3, 600) Securities (MT 515) Accord family Flow model Messages exchanged between the parties, are copied to Accord. Both parties submit messages directly to Accord. Choice Reporting /integration Individual: each party takes own decision as to how matching is done (Manually, on Accord, or on local application) Exclusively Real-Time, in pull mode GUI for operators InterAct based API, for integration Collective: both parties must be Accord users, to obtain a match. Real time towards GUI FIN-based reports at 15 minutes intervals for integration in back-office applications (push mode)

36 SWIFT Alliance Integrator

37 Choices for integrating SWIFT into the business application environment Do-It-Yourself Approach: change and maintain your application Tools: Alliance Access Adapters and Interfaces: MQSA/MQHA AFT SOAP CASmf Generic integration Approach: install an enterprise application integration (EAI) package Tools: Adapters Transformation tools Orchestration tools Labeled integration Approach: install a Financial EAI labeled package (all have EAI) Tools: B2B features Adapters Transformation tools Orchestration tools Access/Gateway Connectivity SWIFT Alliance Integrator Approach: license Alliance Integrator Tools: Adapters Transformation tools Orchestration tools Access Connectivity SWIFT Support SWIFT Expertise 37

38 SWIFT Integration - Four Areas to address Starting to work with SWIFT or a new SWIFTSolution affects existing business processes. It changes the behaviour of applications AND people SWIFT s MT and XML message formats and usage rules are largely paper based (SWIFT User Handbook and Rules book) Data Formats (Standards) Business Processes SWIFTNet Messaging interface End To End Message flows Technical Adapters Business Applications Requires deep SWIFT expertise Linking heterogeneous systems and reliably managing critical data is a very technical activity

39 What does it do? Interfaces to business applications Interface to Alliance Access Event notifications (SNMP, ) Transformations Validations Standards support Bespoke processing SWIFTSolution collaborations Reconciliation Monitoring

40 Benefits Faster Time to Market Minimise the impact on business applications Reduce risk Reduce maintenance cost Improves your business case for SWIFT Services

41 Professional Services

42 SWIFT Professional Services Who we are Cross-divisional teams of SWIFT professionals that have: Expertise in business or technical analysis of your operational flows, vendor applications, technology and infrastructure Comprehensive understanding of message standards, and end to end processing Access to a large Knowledge Base and competitive benchmarking data Project or Service Management experience Extensive knowledge of financial markets, SWIFT infrastructure and/or latest technological developments

43 SWIFT Professional Services Portfolio of services covering your needs Technical and Business Consulting Implementation and Integration Services SWIFT Support and Training The experts are chosen from various teams as appropriate

44 SWIFT Training

45 Training solutions for everyone Classroom courses On-site training SWIFT etraining SWIFT Web class General knowledge Payments Securities Trade Treasury Connectivity

46 Security 47

47 Reliability 48

48 Standards 49

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50 Thank you Ian Bessarabia SWIFT Unit 18 2nd Floor 1 Melrose Boulevard South Africa T D F E W ian.bessarabia@swift.com 51