Slide 1 20061019_AECSD
4th November 2006
Central Securities Depositories, Central Securities Depositories, ISO Standards and SWIFTISO Standards and SWIFT
Automation today and for the Automation today and for the futurefuture
Edward de Courcy-IrelandRegional Manager - Securities
Slide 2 20061019_AECSD
Agenda
SWIFT updateSWIFT update
Securities Market Infrastructures using SWIFTSecurities Market Infrastructures using SWIFT
ISO StandardsISO Standards
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2.5 billion messages per year
7,940 customers
208 countries
Average daily traffic 11.2 million messages
Peak day of 13.1 million messages, 29 Sep 2006
Availability of SWIFTNet 99.999%
SWIFT - September 2006
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FIN Messaging Traffic Growth
FIN Growth by Market – August 2006 YTD(Millions of messages)
FIN Category2005 YTD
Actual2006 YTD
ActualGrowth from
2005
Payments 641 692 7.2%
Securities 555 689 23.2%
Treasury 106 120 12.7%
Trade Finance 31 31 1.8%
System 8 8 -3.4%
Category 9 301 337 11.3%
TOTAL 1,641 1,877 13.6%
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Pricing and traffic Harnessing economies of scale
55
1010
1515
2020
2525
3030
3535
4040
4545
5050
00
500500
10001000
15001500
20002000
25002500
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
PricePrice(EURcent/msg)(EURcent/msg)
TrafficTraffic(Millions of messages)(Millions of messages)
PricePrice
TrafficTraffic
Slide 6 20061019_AECSD
Agenda
SWIFT updateSWIFT update
Securities Market Infrastructures using SWIFTSecurities Market Infrastructures using SWIFT
ISO StandardsISO Standards
Slide 7 20061019_AECSD
Securities strategic priorities (set by the industry)
Market space Strategic priorities
Be the messaging platform of choice for market
infrastructures
Succeed in Pre trade /Trade messagingPre-trade / Trade
Equity and fixed income
Platform of choice for Post-trade / Pre-set.
Post Trade /Pre-settlement
Grow traffic in Clearing and Settlement and Custody services
Clearing and Settlement
Custody Services
Drive Industry towards
Standards convergence
Become messaging platform of choicefor the Funds industryInvestment funds
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A world without SWIFTDifferent Standards, Messaging & Connectivity
MarketInfrastructures
User
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Single Window from SWIFTReusing Standards, Messaging and Connectivity
MarketInfrastructures
User
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Securities Market InfrastructuresOutsource Messaging & Network
MessagingMechanisms
Physical Network
Infrastructurehas full vertical
implementation
MessagingMechanisms
Network Vendor
Infrastructureoutsources
Physicalnetwork
MessagingMechanisms
Network
Messaging&NetworkVendor
InfrastructureoutsourcesMessaging& network
Focusing oncore values
Outsourcingconnectivity to
specialist
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SWIFT’s messaging services
Infrastructures and Infrastructures and service providersservice providers
FinancialFinancialinstitutionsinstitutions
SWIFTNet FINSWIFTNet FINSWIFTNet FINSWIFTNet FIN
SWIFTNet InterActSWIFTNet InterActSWIFTNet InterActSWIFTNet InterAct
SWIFTNet FileActSWIFTNet FileActSWIFTNet FileActSWIFTNet FileAct
SWIFTNet BrowseSWIFTNet BrowseSWIFTNet BrowseSWIFTNet Browse
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Securities Market Infrastructures – SWIFTNet FIN
Argentina Caja de Valores
Australia Australian Stock ExchangeSFE – Austraclear
Austria OeKB
Belgium CIKEuroclear BankMTSNational Bank of Belgium
Brazil CBLC
Canada CDS
Croatia Sredisnja Depositarrna Agencija
Denmark OMXVP
Dubai DIFX
Estonia Estonian Securities DepositoryOMX
Finland NCSD Finland – APKOMX
France Euroclear FranceEuronext Paris – MATIFMTS
Germany Eurex ClearingClearstream Banking AGMTS
Greece Central Securities DepositoryBank of Greece
Hong Kong HK Futures ExchangeHong Kong Monetary AuthoritySEHK Options Clearing House
Hungary Keler
Israel Tel Aviv Stock Exchange
Italy CCGMonte Titoli
Japan JSCCTokyo Stock Exchange
Kazakhstan Kazakhstan Stock Exchange
Korea Securities Depository
Latvia Bank of LatviaCentral DepositoryOMX
Lebanon Midclear
Lithuania OMX
Luxemburg Clearstream Banking SA
Mexico S.D. Indeval
Netherlands Euroclear NederlandMTS
Norway VPS
Poland National Depository for Securities – KDPW
Portugal Banco de Portugal – SITEMEMTS
Russian Federation
Depository Clearing CompanyThe National Depository Center
Singapore Central DepositorySingapore Exchange
Slovakia Bank of Slovakia
Slovenia Central Securities Clearing Corporation – KDD
South Africa STRATEJSE Securities Exchange
Spain IberclearMEFFMTS
Sweden NCSD Sweden – VPCOMX
Switzerland SISSIS x-clear
Taiwan Securities Central Depository
Thailand Thailand Securities Depository
UK (& Ireland)
CRESTLCH.ClearnetLondon Stock Exchange
USA Chicago Mercantile ExchangeClearing CorporationDTCCOmgeoOptions Clearing Corporation
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Banking Market InfrastructuresAlbaniaAlgeria Angola Australia Austria Azerbaijan Bahamas BahrainBarbados Belgium Bosnia and HerzegovinaBotswanaBrazil Bulgaria Canada ChileCLSCroatia Denmark East CaribbeanEgypt EBA (EURO1/STEP1)ECB (TARGET)
Eurosystem (TARGET2)FijiFinland FranceGeorgiaGermany Ghana GreeceGuatemala Hong Kong Hungary Ireland Italy Jordan Kenya KuwaitLatvia LebanonLesothoLuxemburgMaltaMauritius Namibia NetherlandsNew Zealand
NorwayOmanPakistanPalestinePhilippinesRomania Russian FederationSingaporeSlovenia South Africa Spain Sri Lanka Sweden Switzerland TanzaniaThailandTrinidad and TobagoTunisiaUgandaUnited Kingdom United StatesVenezuela ZambiaZimbabwe Central African States West African States
High-Value Payments
Live
Implementation
Planning
67
8
8
Countries
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Agenda
SWIFT updateSWIFT update
Securities Market Infrastructures using SWIFTSecurities Market Infrastructures using SWIFT
ISO StandardsISO Standards
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SWIFTNet FIN:Settlement & Reconciliation Process
Trade Date
Settlement Date
MT 540-3SettlementInstruction
MT 537Pending
Transactions
MT 548Status of
Instruction
MT 535Statement of Holdings
MT 536Statement
of Transaction
s
MT 544-7Confirmationof Settlement
CSD participantCSD participant
CSDCSD
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SWIFTNet FIN:CA Message flow - non elective event
AnnouncementRecord
DatePayment
Date
MT 564Notification
of Announcement
MT 564Notification of
Entitled Position
MT 566Confirmation
of account activity
Ex Date
CSD participantCSD participant
Stock Exchange/CSDStock Exchange/CSD
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SWIFTNet FIN:CA Message flow - elective event
Announcementof offer
DeadlineDate
Receipt ofnew shares
Ex/Record
DateResponse period
MT 564Notification
of Offer
MT 567Status of
Instruction
MT 565Instruction
MT 566Confirm of account
activity
MT 564Notificationof Ex date
EntitlementMT 564
NotificationEntitlement Calculation
CSD participantCSD participant
Stock Exchange/CSDStock Exchange/CSD
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SWIFTNet FIN:Post-trade pre-settlement matching (model I)
ReceiverReceiver
CSDCSD
DelivererDeliverer
Matching utilityMatching utilityMT 515Trade
confirmation
MT 515Trade
confirmationMT 509Trade status
MT 540-3SettlementInstruction
MT 540-3SettlementInstruction
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SWIFTNet FIN:Post-trade pre-settlement matching (model II)
ReceiverReceiver
CSDCSD
DelivererDeliverer
Matching engineMatching engineMT 540-3SettlementInstructionMT 548
Status ofinstruction
MT 540-3SettlementInstruction
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Typical usage by Securities Market Infrastructures of all SWIFTNet Messaging services
FIN FileAct InterAct Browse
InstructionsConfirmationsStatusStatementsCA reportingCA confirmsColl Mgmt
ISO 15022
Putting legacy(domestic standards) on file transferonSWIFTNet
(proprietary formats orISO 15022 orISO 20022)
Putting legacy screen-based access on SWIFTNet
Putting legacymessagingonSWIFTNet
(proprietary formats orISO 15022 orISO 20022)
Proxy Voting
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Securities market infrastructures –SWIFTNet InterAct, FileAct and Browse
Belgium Euroclear Bank EUCLID File TransferEUCLID PC / Server
France Euroclear France E2A
Italy Monte Titoli Express II
Luxemburg Clearstream International
Creation Direct
Netherlands Euroclear Nederland
Direkte Verbinding
Spain Iberclear Ventana Unificadade Communicaciones (VUC)
United Kingdom
CRESTCo SWIFTNet CREST
USA DTCC Deriv/SERV
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Who is listening?
ECSDA (EU) ACSDA (Americas) ACG (APAC) AECSD (CIS) and you, the AMEDA and a date for your diaries
Boston October 1-5, 2007
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Accessing CSDs through SWIFT:Market needs
One standardisedstandardised solution
– Interfaces
– Messaging
– Security Giovannini compliantGiovannini compliant and EU integration future proof Complete range of communication channelscommunication channels ISO compliantISO compliant standards (15022 and 20022) Uniform serviceUniform service (support, liability,…) Value-added servicesValue-added services
UNDER DISCUSSION
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Thank youThank youfor your for your attentionattention
Slide 25 20061019_AECSD
19 October 2006
Central Securities Depositories, Central Securities Depositories, ISO Standards and SWIFTISO Standards and SWIFT
Automation today and for the Automation today and for the futurefuture
John Falk
Slide 26 20061019_AECSD
Back-up
Slide 27 20061019_AECSD
CSD participants
New SWIFTSolution:SWIFTNet CSDAccess
...
...
1-by-1 messaging channelFile transfer channel
Operator-based access
CSDs
ISO 15022ISO 20022 Potential added value:
Notary functionCopy function to regulators
MT/MX translation…
Global solution – Giovannini compliantGlobal solution – Giovannini compliant and EU Harmonisation alignedand EU Harmonisation aligned
UNDER DISCUSSION
Slide 28 20061019_AECSD
Agenda
SWIFT updateSWIFT update
Securities MIs using SWIFTSecurities MIs using SWIFT
New SWIFTSolution: SWIFTNet CSDAccessNew SWIFTSolution: SWIFTNet CSDAccess
EU C&S harmonisationEU C&S harmonisation
SN Kits: Connectivity for small usersSN Kits: Connectivity for small users
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SWIFT usage for local intermediaries
Local CSD, Central Bank & settlement agents International Cash Correspondents Global Custodians International B/Ds
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Making SWIFT cost-effective
Services
Security
Messaging soft
Connectivity soft
Network
Complete set-up
Special SN Kitsfor specific solutions
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Market Infrastructure CUGs:A closed community of users on SWIFT
SWIFT user
SWIFT user
SWIFT user
SWIFT user
SWIFT user
Service participant
Service participant
Service participant
SWIFT member
Through Closed User Groups, the administrator takes full control: which messaging options,
which billing option, who has access, …
Through Closed User Groups, the administrator takes full control: which messaging options,
which billing option, who has access, …
“Service Participants within
a Closed User Group”
“Service Participants within
a Closed User Group”
Market infrastructure
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The SWIFT community
fund administrators
MA-CUGs
banks found SWIFT
money brokers
trading institutions
- registrars & transfer agents- custody providers- trust or fiduciary services companies
investment managers
- broker/dealers- central depositories & clearing institutions- exchanges
- payments MIs- proxy voting agencies- non-shareholding financial institutions
- treasury counterparties- treasury ETC service providers
travellers cheque issuers
securities MIs
1987
1988
1989
1990
1973
1992
19951998
1999
2000
2001
2002
2004
securities market data providers
1996
treasury securities ETC service providers
Slide 33 20061019_AECSD
Using SWIFT to communicate with securities market infrastructures
Benefits for system ownerBenefits for system owner
> increased internationalisation of client activitiesAccess to all types of domestic and international players
> trading > clearing > settlement > custodyGlobal standards ISO 15022, XML, FIX for
Low entrance barriers for
Time to market is
Mission critical levels of> reliability, security and support
> short
> remote members
IMIM B/DB/D B/DB/D
SCSC SASA
Order
GCGC
SASA
MU /ETCPMU /
ETCP
ExchangeExchange
CH /CCPCH /CCP
(I)CSD(I)CSD
CMCM
TradeTrade
CMCM
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> cost efficiency
Using SWIFT to communicate with securities market infrastructures
> Market Practice standardisation > straight-through processing > Real-time DVP > shorter settlement cycles > risk reduction
Business standardisation: ISO 15022, XML, FIX
Technical standardisation: single window access to domestic and international systems through one interface
Mission critical levels of> reliability, security and support
IMIM B/DB/D B/DB/D
SCSC SASA
Order
GCGC
SASA
MU /ETCPMU /
ETCP
ExchangeExchange
CH /CCPCH /CCP
(I)CSD(I)CSD
CMCM
TradeTrade
CMCM
Benefits for system memberBenefits for system member