WAMZ Business Forum
Securities Worksession
Ian Bessarabia
WAMZ Regional Country Manager
Accord
Asset Servicing
Standards
Our choice for today
Funds
SWIFT services for
Securities Markets
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".
WAMZ Business Forum -August 2011
Financial Times 18 May 2011
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?”
• Investor comfort is increased
• Investor risk is reduced
• Your market meets
International Standards
Create an
environment
• 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 WAMZ Business Forum -August 2011
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 / pre-settlement 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) Cash management Payments Cash reporting Cash settlement Cash reporting Cash settlement
Cash reporting Cash reporting Cash reporting Cash reporting Cash reporting Exception Management
Asset servicing & Administration
Data distribution Data distribution
Agent notices (FpML - EOC CUG,
DTCC) Corp. Action Corp. Action (Corp. Action)
Proxy voting
Portfolio
Administration Total Portfolio Valuation (TPV) – New! Collateral
management
Collateral Management
Collateral Management – New! Portfolio Reconciliation – New! Securities Financing Securities
Financing – New!
Securities Financing – New! Regulatory Reporting Transaction
Reporting Transaction Reporting Transaction Reporting Transaction Reporting
Planned solutions Available Solution
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 / pre-settlement 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) Cash management Payments Cash reporting Cash settlement Cash reporting Cash settlement
Cash reporting Cash reporting Cash reporting Cash reporting Cash reporting Exception Management
Asset servicing & Administration
Data distribution Data distribution
Agent notices (FpML - EOC CUG,
DTCC) Corp. Action Corp. Action (Corp. Action)
Proxy voting
Portfolio
Administration Total Portfolio Valuation (TPV) – New! Collateral
management
Collateral Management
Collateral Management – New! Portfolio Reconciliation – New! Securities Financing Securities
Financing – New!
Standards
Do
you
No standards or many standards
• Cost
• Errors
• Risk
• Poor service
–Unhappy customers
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)
Increase market practice
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
WAMZ Business Forum -August 2011
SWIFT Reach: > 9300 financial institutions
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
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 HK Exchange and Clearing
Romania
Depozitarul Central
HK Monetary Authority (CMU)
WAMZ Business Forum -August 2011
Single Window using SWIFT
Same Standards, Messaging and Connectivity
SMI Participant
Securities Market
Citi’s Global Footprint for SWIFT Connectivity
Asia Pacific
Australia
Japan
Malaysia
New Zealand
Singapore
South Korea
Thailand
China
Hong Kong
Indonesia
India
Philippines
Taiwan
Vietnam
Sri Lanka
Bangladesh
Brunei
North America
USA
Canada
Mexico
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
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
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
WAMZ Business Forum -August 2011
Securities market: equities and fixed income
SWIFTNet FIN:
Settlement & Reconciliation Process
CSD business using every SWIFT channel
Application-to-Application
One by one messaging (store & forward and query & response)
Human-to-Application
Browser-based access and manual FT & message GUIs
File Transfer (push or pull)
Typical usage by Securities Market
Infrastructures of SWIFTNet Messaging services
FIN
FileAct
InterAct
Browse
Example of a divider slide
Asset Servicing
What can go wrong with a corporate action?
Stock Available
Pari Passu
Unconditional
Registration
Instruction Deadline
Decision Deadline
Acceptance
Record Date
Ex Date
Record Date
(Pre) Notification
Research
Pre-Decision Processing
Decision
Processing
Post-Decision Processing
No Notification
from counterpart
Incorrect
Information
No Diary Entry
Positions Disagree
Host System not
Updated
Position Taken
Late
Missed Deadlines
Incorrect decision
applied
Trading shares not
available
Trading shares not
owned
Host system(s) not
updated/updated
incorrectly
Positions not
protected
Courtesy Checkfree & Celent
Institutional investors
Distributor
Transfer Agent
Fund accounting
agent
End
investors
Cash agents
Distributor-side
Cash agents
Fund -side
Platforms & fund
supermarkets
Portfolio managers
(I)CSD (when applicable)
Order placement & settlement, reconciliation, price report, transfer, account opening,
cash forecast, corporate actions & fund-related payments
Order placement
(core fund business)
Price report
Settlement
Payments
What flows can you automate on SWIFT?
Accord: a SaaS family
Same infrastructure – different service structure
Treasury (=Cat 3, 600)
Securities (MT 515)
Flow model
Messages exchanged between the
parties, are
copied to Accord
.
Both parties submit messages
directly to Accord
.
Choice
Individual: each party takes own
decision as to how matching is done
(Manually, on Accord, or on local
application)
Collective: both parties must
be Accord users, to obtain a
match.
Reporting
/integration
Exclusively Real-Time, in pull mode
• GUI for operators
• InterAct based API, for integration
• Real time towards GUI
• FIN-based reports at 15
minutes intervals for integration
in back-office applications
(push mode)
WAMZ Business Forum -August 2011
37 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
Labeled integration
•
Approach: install a Financial EAI
labeled package (all have EAI)
•
Tools:
– B2B features
– Adapters
– Transformation tools
– Orchestration tools
– Access/Gateway Connectivity
Generic integration
•
Approach: install an enterprise
application integration (EAI) package
•
Tools:
– Adapters
– Transformation tools
– Orchestration tools
SWIFT Alliance Integrator
•
Approach: license Alliance Integrator
•
Tools:
– Adapters
– Transformation tools
– Orchestration tools
– Access Connectivity
– SWIFT Support
– SWIFT Expertise
SWIFT Integration - Four Areas to address
Business Applications
SWIFTNet
Technical
Adapters
Linking heterogeneous systems
and reliably managing critical data
Data
Formats
(Standards)
SWIFT’s MT and XML message formats
and usage rules are largely paper based
(SWIFT User Handbook and Rules book)
Business
Processes
Starting to work with SWIFT or a new SWIFTSolution
affects existing business processes. It changes the
behaviour of applications AND people
WAMZ Business Forum -August 2011
What does it do?
• Interfaces to
Benefits
• Faster Time to Market
• Minimise the impact on business applications
• Reduce risk
• Reduce maintenance cost
WAMZ Business Forum -August 2011
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
WAMZ Business Forum -August 2011
