1

Straight Through Straight Through ProcessingProcessing

The Success Story in The Success Story in TSDTSD

2

Force Driving for STPTSD Success Story & Current State

STP Processing FlowFuture Development Paths

AGENDAAGENDA AGENDAAGENDA

Centralized securities depository

Drivers Changes Outcome

OTC Transaction

/RTGS

Pre-Settlement Matching

Corporate Action

STPSTP

Pre

sen

tFu

ture

Force Driving of ChangeForce Driving of Change Force Driving of ChangeForce Driving of Change

Elimination of manual intervention

Lack of standard

Reduced Operational Costs & Risks

TSD Success Story & Current TSD Success Story & Current StateState TSD Success Story & Current TSD Success Story & Current StateState

Since 15 May 2006, the depository of public debt securities has been migrated from the BOT to TSD

Clearing of government bonds has been done at the BOT whereas for corporate bonds at the TSD

The centralization of the securities depository and the clearing and settlement system will help improve efficiency and reduce the cost of securities clearing and settlement

Befo

reP

resen

tB

en

efi

ts

5

TSD Success Story & TSD Success Story & Current State (Continued)Current State (Continued) TSD Success Story & TSD Success Story & Current State (Continued)Current State (Continued)

Clearing & Clearing & Settlement Settlement

from Tradingfrom Trading (Gross (Gross

Settlement)Settlement)

OTC OTC TransactionTransaction

(With/Without (With/Without Payment)Payment)

TSD adopted STP for TSD adopted STP for 1) OTC Transaction for 1) OTC Transaction for

Government Bond Government Bond 2) RTGS in Bond & Equity2) RTGS in Bond & Equity

Way o

f S

uccess

Way o

f S

uccess

6

STP for OTC TransactionSTP for OTC Transaction STP for OTC TransactionSTP for OTC Transaction Transfer Without Payment (Delivery Free)Transfer Without Payment (Delivery Free)

Member A(Transferor)

Member B(Transferee)

MT 542 (DF) MT 540 (RF)1 1

MT 546 (DF Confirm ) MT 544 (RF Confirm )4 4

Match DF & RF

2

Debit Member A

A/C

Credit Member B

A/C

3 3

End-to-EndIntegrated Front to BackAutomatedValue AddedValue Added

7

STP for OTC TransactionSTP for OTC Transaction STP for OTC TransactionSTP for OTC Transaction Transfer With Payment (Delivery Against Payment)Transfer With Payment (Delivery Against Payment)

Member A

(Transferor)

Member B(Transferee)

MT 541 (RVP)MT 543 (DVP)1 1

MT 298/103 (Payment Request)

BOT

4 MT 298/107 (Response Message)

5

2Match DVP &RVP3 Hold

Bond 6Debit Member A A/CCredit Member B A/C

MT 545 (RVP Confirm)

MT 547 (DVP Confirm)

77

Clearing & Settlement from Clearing & Settlement from TradingTradingClearing & Settlement from Clearing & Settlement from TradingTrading

BOT

Payment(Cash)

BOT

Payment(Cash)

Payment Request

TSD

Clearing & Settlement

TSD

Clearing & Settlement

Execution

Confirm/Reject

Settlement

Bank

Payment Request

Confirm/Reject

ExchangeExchange

Member A

Member B

Confirm

Confirm

Automated Processing from Trade Inception to Settlement(Gross Settlement)

9

Benefits for Improving Benefits for Improving Market LiquidityMarket LiquidityBenefits for Improving Benefits for Improving Market LiquidityMarket Liquidity

Minimize Processing Time for Members (Sellers & Buyers) to Increase Trading Turnover

Pave the way for possible regional central securities depository or clearing and settlement linkage in the future.

Enhance Efficient and Reliable Clearing & Settlement system to increase investors confidence

10

Future Development PathsFuture Development PathsFuture Development PathsFuture Development Paths Pre-Matching : SWIFT Message (Q2 2009)

Corporate Action: SWIFT Message (Q3 2009)

Value Proposit

ion

Elimination of

manual activities

Reduce

operational risk

Shorten

Settlement Cycle

Value Proposit

ion

Elimination of

manual activities

Reduce

operational cost

Shorten Time

Future Development: Pre- Future Development: Pre- MatchingMatchingFuture Development: Pre- Future Development: Pre- MatchingMatching

Pre-Matching : SWIFT Message for Matching instructions between custodian and broker/ custodian and custodian

TSD

Manual key- In2 Steps

Manual key- In2 Steps

TSDMatch

SWIFT

SWIFT

Investors

Investors

Current Future

Future Development: Future Development: Corporate ActionCorporate ActionFuture Development: Future Development: Corporate ActionCorporate Action

Members will receive Corporate Action via SWIFT Message

TSD

Text File

MembersRe-key/SWIFT

Download

Stakeholders

CurrentTSD

Members

Stakeholders

Future

SWIFT

SWIFT

SET Issuer SET Issuer

13

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