nybf 2014 - spotlight on latin america

Latin America Fund World – Growing

Market with a need for Automation

Thomas Trépanier

Commercial Manager, SWIFT Americas

4 March 2014

SWIFT Business Forum New York

SWIFT Business Forum New York

2 SWIFT Business Forum New York - March 4, 2014

Thomas Trépanier

Commercial Manager

Latin America

Agenda

SWIFT Business Forum New York - March 4, 2014

• Fund Business development in Latin America

• Mandated management and implementation of regulatory change

• The impact of legislature and market change

• Moving from manual to automated environments

• How is SWIFT helping?

• SWIFT automation

• SWIFT Accord

• Overall value add of SWIFT

3

Evolution of Processes for Funds in LATAM

• Inefficient and inconsistent pricing

• Lack of consistency and transparency into the net asset value (NAV)

• High risk and lack of automation

• Inconsistent methods of meeting statutory and regulatory requirements

Stage 1

Manual

Processes

• Automation efforts gain importance

• Focus on System Liquidity

• Focus on Cross -Border

• Focus on cost efficiency

Stage 3

Post 2013

• Local market crises abound

• Regulatory easing allowing for global reach

• Focus on speed of settlement

• Readiness for automation

Stage 2

Economic

Crisises/Global

Focus

MIs MIs

SWIFT Business Forum New York - March 4, 2014 4

Ultimately…

Processing costs rise as volumes increase, while margins continue to fall

Presentation title – dd month yyyy – Confidentiality: xxx 5

On top of this - mandated management and

implementation of regulatory change

– Mexico and Colombia - regulation driving higher level confirmation closer to the point of execution – a process not undertaken by custodians

– In Colombia – regulation 1242, and move split of custodian bank duties – a change mandated in law

– Chile - pension funds looking to extend their reach direct to funds in US/Europe. More accountability, transparency, visibility and reporting of underlying funds

– Brazil, Colombia and Mexico - Increased need for control of investment activity post crisis most of which mandate reporting, or automated affirmation, with at minimum punitive resultant fines for non compliance

Presentation title – dd month yyyy – Confidentiality: xxx 6

The Impacts of Legislature and Market

Change

• Matching timeframe consistency is considered desirable, in what is presently a disjointed ‘by market’ approach to settlement instruction and matching (examples Latin America to Europe and USA).

• An efficient fails process for trades that have failed to settle is required, these fails could be reduced by increased capture in affirmation.

• Minimising fails, will minimise financial fines, buy in penalties and collateral/margin requirements.

• Further downstream impact to Corporate Actions, Stock Lending, Associated FX transactions.

Presentation title – dd month yyyy – Confidentiality: xxx 7

Moving from manual to automated

environments

• Funds are becoming a Global Business, requiring Global connectivity. Funds are getting bigger and more sophisticated

• Around 50% of most institutions trades are not positively affirmed, and industry statistics show that a positively affirmed, or matched trade is 37 times less likely to fail – hence a lessor requirement for Collateral sourcing, Margin and Funding.

• Continual focus on cost forces institutions to find better priced, resilient solutions

Presentation title – dd month yyyy – Confidentiality: xxx 8

How is SWIFT supporting the Latin

American region?

Presentation title – dd month yyyy – Confidentiality: xxx 9

Co

nce

rns

- Manual processes & lack of resilience

- Multi-Format Challenges

- Counterparty Risk

- Costs SW

IFT

solu

tion

- Alliance Lite2

- SWIFT translation

- GETC & Accord

- Cost savings and reduced fees

SWIFT increases the value proposition of a FM to their own clients

10

Continuous Focus on Adding Value to Our Community…..

Latin American Interest in SWIFT and Accord

Software as

a service

(SaaS)

No initial

Investment

You pay per use

of the service

One training is

sufficient to use

Accord

Support

24/7

Availability:

99.999 %

500 entities

using the service

SWIFT Business Forum New York - March 4, 2014 11

SWIFT Accord for Treasury; Enabling real-time

matching and exception handling for foreign exchange, money

market, OTC derivative and commodity trade confirmations

Presentation title – dd month yyyy – Confidentiality: xxx 12

Accord Subscribers (>500

in 72 countries)

• Banks

• Brokers

• Custodians

• Fund managers

• Corporates

• Central banks

Accord

subscriber or

non-

subscriber

Copies of Confirmations

Real-time reporting & exception handling

Integration available for various Back Office

Systems

Deal

4

1

Accord

• Real-time Confirmation Matching Service

• Availability of >99.97% last 5 years

• 100K msgs/hour observed matching capacity

• Full Financial Liability for Matching results

Confirmations:

Message Types:

(MT 3xx or, MT 600)

2

C/P

C/P

SWIFTNet

Accord for Treasury

3

Strong growth from Latam securities – driven by clearance

& settlement, statements, trade status and asset services

13

Value add from SWIFT

Presentation title – dd month yyyy – Confidentiality: xxx 14

“In the stability of the payment and securities settlement systems embeds an overriding public interest, that moves us to establish special protective regulation, based on the values and that public interest we are seeking to protect “

Basis for future growth

Regional Interoperability

Emerge as regional market

Q&A

?

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SWIFT Business Forum New York

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Thomas Trépanier

Commercial Manager

Latin America

• SWIFT Business Forum Canada

• Toronto, Canada

• 7 April 2014

• Latin American Regional

Conference

• Mexico City, 28-29 May 2014

• SIBOS

• Boston, 29 Sept – 2 Oct 2014

Don’t forget...

SWIFT Events

• Webinars

• www.swift.com/events

• http://www.swift.com/events/w

ebinars.page?

• Industry Events

• ACSDA, 2-3 April 2014

SWIFT Business Forum New York - March 4, 2014 17

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Thank you

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