strate’s membership to presented by: monica singer date: 22 october 2009 place: 10 th ameda...
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Strate’s membership to
PRESENTED BY: Monica SingerDATE: 22 October 2009
PLACE: 10th AMEDA Conference- Morocco Marrakesh
Link-Up Markets: The Universal ‘Adapter’
Driving message harmonization through message conversion (using the ‘Adapter’)
Leveraging existing technology and infrastructure
The ‘Adapter’ written by TCS, used to integrate with Strate technology supported by TCS.
A technology solution to drive new business solutions which operates using Swift
technology.
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Link Up Markets infrastructure“Adapter”
Investor CSD (sender) Issuer CSD (receiver)
Link-Up Markets provides the infrastructure to facilitate cross-border settlement between foreign CSDs and Strate
Mapping Rules to convert messages
Target 2 Securities vs. Link-Up Markets
Post Target 2 Securities (T2S)
• Options for CSDs were consolidation (i.e. Euroclear’s single platform) or
• Interoperability between CSDs which Link-Up Markets provides
• Increased competition between CSDs
• CSDs to move up the value chain (possibly into custody)
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Link-Up Markets is more than just a reaction to T2S
Why is Link-Up Markets a good fit for Strate?
High Costs of multiple CSD to CSD Links vs. Link-Up’s interoperability
• Link-Up provides interoperability (no “re-inventing of the wheel”) between many
CSDs and promotes reusability of existing technology
• Cheaper overall costs (IT infrastructure is outsourced, Message conversion, Maintenance of multiple
links)
Link-Up provides a single point of access to Top Investment Destinations
• Either directly or indirectly to 7 out of the Top 10 South African Investment
Destinations
High adaptability and synchronization of technology platforms
• Link-Up technology is TCS-based (Strate’s IT vendor of choice)
• SAFIRES system at Strate is present in other CSD member(s) of Link-Up Markets
• Link-Up and Strate both use SWIFT technology extensively
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Strategic benefits for Strate joining Link-Up Markets
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Single link with the rest of the world Alignment with Strate’s strategy for global recognition Strengthen strategic position of South Africa as the Hub for further African markets Strate becomes part of the international CSD community Learning from other CSDs on Global Best Practice for the future Strategic direction of
Strate
Potential movement up the asset-serving value chain and new products and services
Value Proposition to CSD Participants
Direct access to cross-border settlement at domestic CSD charge
An alternative channel for cross-border settlement, with the ability to retain current
relationships with Global Custodians
Using existing connectivity to Strate (re-use of existing technology) through the
domestic infrastructure and operations to facilitate cross-border settlement
White-labelling of services by Strate to its participants
Potential for an increase in inbound investment
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What Link-Up Markets is for the South African Market
Link-Up Markets introduces the following to the South African Market:
Direct access to cross-border settlement at a domestic CSD charge
Use of existing domestic infrastructure to effect a cross-border settlement
An alternative/choice channel for cross-border settlement for inbound and outbound
transactions
Africa’s first CSD to CSD link with 8 European CSDs such as Clearstream Banking
AG Frankfurt (Germany), CSE (Cyprus), Hellenic Exchanges S.A. (Greece),
IBERCLEAR (Spain), Oesterreichische Kontrollbank AG (Austria), SIX SIS AG
(Switzerland), VP SECURITIES (Denmark) and VPS (Norway) through bi-lateral
agreements
Global exposure to proudly South African technology
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What functions would Strate be required to perform as a member of Link-Up Markets?
Issuer CSD: Refers to the CSD which settles inbound investments:
Cash Movement : Always by a foreign bank to a local Bank
Main function of the Issuer CSD: To settle the transaction in accordance with
Issuer CSD rules
Link-Up Member CSD to open an account in the Issuer CSD
Investor CSD: Refers to the instructing CSD for outbound investments: (SA
investors wanting to invest in foreign markets)
Cash Movement: Client’s Bank in South Africa which is a authorised dealer transferring
to a bank operating with the Link-Up Markets CSD (i.e. the Issuer CSD)
Main function of the Investor CSD: Instructs the Issuer CSD in a foreign country
Holds mirrored accounts in the Investor CSD of holdings in the Issuer CSD (as settlement takes place in
the Issuer CSD)
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Strate is joining Link-Up as an Issuer CSD initially due to international demand from foreign CSDs
Issuer CSD is for Phase I and Investor CSD is for Phase II for all Link-Up CSD members
Estimated Live Date
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Fourth quarter 2010 with at least one Investor CSD amongst Link-Up
members having an account in Strate, opened and operational
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