gearing indonesia securities markets for growth

Gearing Indonesia’s Securities

Market For Growth

SWIFT Business Forum Indonesia, April 2015

Alexandre Kech, Head of Securities, Asia Pacific, SWIFT

Jean Chong, Manager, SMIs, Asia Pacific , SWIFT

How Can SWIFT Help?

Securities Markets Trends

Progress with ISO 20022 Adoption

Domestic and Regional Project Themes

Agenda

ID Business Forum 2015

- Horizontal and vertical

linkages among MIs

- Internationalisation/

regionalisation initiatives

- New services (like U2A,

liquidity mgt, collateral)

- “Hubbing” of operations

- Refocus to other markets

(APAC, LATAM)

- Format and messaging

standardisation

- Automation and best

practice

- Pressure to lower fees

and margins with higher

volumes

- increased need for high

quality collateral

- better manage financial

shocks

- Need for enhanced

resiliency, reliability,

availability

- Resiliency, reliability,

availability etc

- Increased need for

compliance data

- Cyber security

- Increased efficiency and

transparency

- Increased reporting and

control requirement

- E.g. trade reporting,

PFMIs etc


Regulatory pressure Business risk

mitigation Operational risk

mitigation

Business interoperability

Cost efficiency Innovation


Americas, 20%

Asia Pacific,

13% EMEA, 67%

Upward Trending FIN Messaging


8.2 9.0

10.0

11.4

14.0

15.3 14.9 16.0

17.6 18.2

20.1

22.9

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

FIN Average Daily Traffic Messages (millions)

ID Ranked 10th in APAC for FIN Traffic Sent

ID Business Forum 2015 ID FIN Traffic, 2014

0

2

4

6

8

10

12

14

16

18

20

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

8 8

9

10 10

12

14

16

19

20

8 8 9 10 9 11 10 11 11

12

Traffic sent (mil) Traffic received (mil)

Top 10 Message Types


Major countries ID is sending traffic to – US (46%), UK (17%), ID (12%)

Major countries ID is receiving traffic from – US (46%), ID (20%), UK (8%)

How Can SWIFT Help?




Agenda


DTCC, US

JASDEC, JP

[Post-trade]

ANBIMA, BR

T2S, EU

CSD, LI

CSD, EE

CSD, LT

ASX, AU

ISO 20022 Adoption – Securities MI & Treasury MI

CLS

Treasury MI Securities MI

SGX, SG

JASDEC &

TSE, JP

[Corp.Act]

Live

CN

Live

BR, CSD

Live

NSD, RU

VP Lux

VP Sec

DK

AMBD,

BN

Live

KDPW

CCP, PL NBB-SSS,

BE

KSEI,

ID

Live

Live

ABMF

CSIF


IPFA

SEPA,EU

BR

DK

CH

FED, US

CPA, CA

IPFA

T2, EU

AU

Zengin,

JP

CNAPS,

CN

IN

Low-

value

High-

value

BOJNet,

JP

CPA, CA

Live Live

Live

NZ

SG

CO

PE

Live

PG

CL

ZA

PL

BN

CNAPS,

CN

SADC

UK

Live

ISO 20022 Adoption – Payments MI


ISO 20022 Adoption – SWIFT for Funds

GB

CH

AU

TW

SE

FI NO

IE

ES

IT

GR

EE

BE

NL

LU

KR US FR

DE

SG

HK

BM

AD AT

BS

LV

PL

This map shows countries where one or more players are

sending/receiving ISO 20022-based Funds transactions.

This includes major players such as Clearstream,

Euroclear, Benefit Trust Company Funds Messaging, etc

Snapshot Jan 2015 ID Business Forum 2015


The ISO 20022 adoption mApp

* Initiatives who plan to adopt the official ISO 20022 messages registered on www.ISO20022.org

ISO 20022

adoption mApp

adoption

mApp

ISO 20022

> Information provided by

initiative* owners

> Covers all regions &

business segments

> Easy to use, contribute to

and maintain

Facilitating adoption

and fostering dialogue A free IOS tablet app,

that provides an overview of initiatives

adopting ISO 20022 around the world

> 80

initiatives

How Can SWIFT Help?




Agenda


• Mis-interpretation of

announcements made by

issuers

• Manual scrubbing of

information being

laborious and error-prone

• Missing out CA

announcements and

deadlines for instructions

• Standardised templates for

the various event types

• Automated dissemination of

CA announcements and

handling of instructions

• New revenue sources for

SMIs

• Address community

demands for higher quality

of information and

dissemination

Corporate

Action

Standardisation and Automation

Operational

Risks

Benefits

Trends in Corporate Action

Sourcing for

new

revenues

Trending towards

golden copy

solution

Improvements to Corporate Action Processes

TSE-JASDEC

Corporate Action Data

Flow Improvements

ASX

Corporate Action STP

Project

SGXNews

CeDs service

enhancements

• Real time directly from

issuers

• On SWIFTNet

• Allows for ISO15022 and

20022

• Golden copy from Issuer

via ASX using ISO20022

• Increase STP, improve

customer service and

reduce operational risks

and costs

• Accommodation of

international standards

• In line with JASDEC

PSMS upgrade

• Time, cost, STP and risk

efficiency for format

conversion

2014 2014 2014

SWIFT involvement:

- Message development

- Gap analysis

- Impact assessments

SWIFT involvement:

- Strategy development

- MyStandards

- Community engagement

- Specification writing and

maintenance

- ISO governance support

SWIFT involvement:

- Strategy development

- Community engagement

- Specification writing and

maintenance

- ISO governance support


KSEI Automation of

Corporate Action

Processing

• Aligning with international

standards for messaging

• Automation and timely

dissemination

• More efficient use of

resource

2011

SWIFT involvement:

- Consulting

- Implementation (with

SWIFT partner, Vensys –

XML-MT conversion, AA

upgrade, coding,

standards, monitoring

tool

India

Maldives

Sri Lanka

Nepal Bhutan

Bangladesh Burma Laos

Thailand

Cambodia

Brunei

Vietnam

Malaysia

Singapore

Indonesia East Timor

Philippines

Hong Kong

Taiwan

South Korea

North Korea

Japan

China

Renewing Technology Clearing and Settlement Projects

Australia

• Technological refresh

• Internationalisation

• Regional integration

• Message standardisation

• SWIFT Strengths:

SWIFT C&S

automation track record

ISO standards

knowledge

Past regional and

global work

Reach

Talking about

Live or planned ID Business Forum 2015

Clearing & Settlement

• ISO 20022 strategy

• High level and detailed gap

analysis review

• ISO governance support

(maintenance and new)

• MyStandards

• Implementation support

• Trainings


• Standards strategy

• Specifications review

• MyStandards


• Community engagement

• Standards forums

• Customised trainings

• Standards consultancy

Securities M

ark

et

Infr

astr

uctu

re

Com

munity

• Market practice discussion facilitation

• Standards forums

• Customised trainings

• Standards consultancy

• Community workshops

• On boarding portal

Contributing to Major SMI Projects Helping both MI and Community


India

Maldives

Sri Lanka

Nepal Bhutan


Thailand

Cambodia

Brunei

Vietnam

Malaysia


Philippines

Hong Kong

Taiwan

South Korea

North Korea

Japan

China

Renewed Priority for Collateral Collateral Management Projects

Australia

• Funding & liquidity

demands

• Streamlining operations

• Clearstream/Euroclear

• Regulation

• SWIFT Strengths:

SWIFT automation

track record

ISO standards

knowledge

Past regional and

global work

Reach

Singapore

Talking about it

Project planned or life ID Business Forum 2015

• Automation

• Straight through Processing (STP)


Trending with Automation and Standardisation Evolution of Funds Processing

Ensuring

Scalability

• Establish market practice

• Agree on common language

• Central processing venue (usually MI)

• Common communication protocol

Opening

distribution

• Agree on common best practices

• Adoption of ISO standards

• Use standard network, international highway

• Facilitate distribution via platforms

Distributing

X-border

Evolu

tion /

Tim

e

Emergence of Fund Platforms and Passporting Driven by market infrastructures

• TAIWAN

• HONG KONG

• KOREA

• AUSTRALIA

• CHINA


LIVE

• SINGAPORE

• INDONESIA

• VIETNAM

• THAILAND

*

* Indirect SWIFT adoption via service providers: BBHi, Calastone, Euroclear

THINKING

Domestic X-Border

ISO 20022

ISO 20022

ISO*

Network Standard

Regional

• CN-HK Mutual Recognition

• ASEAN Fund Passporting Initiatives

• APEC Asia Region Funds Passport (ARFP)

SWIFT in Support of Regional Integration

• Sharing our experience and know how

• Standardising

• Support Integration

• Deepen Domestic Market

Focus on SMIs and

participants, broadening their

connectivity, messaging and

standards

Focus on domestic

markets to become

interoperable for

regionalization

Standard infrastructure,

service provider,

communications, management & consultation

Natural role to facilitate regional

integration and harmonisation

We

By




• Impact assessment

• Specifications review

• Development of 100 new

messages

• Maintenance support for

existing messages

• MyStandards


• Testing of systems

• Etc.



• Specifications writing and

review

• Community engagement


• Cross-border connectivity

• Regional market practice

support

• Local integration

• Project management

• MyStandards


• Etc

Regionalisation Initiatives Driving ISO 20022 adoption and cross-border

communication


India

Maldives

Sri Lanka

Nepal Bhutan


Thailand

Cambodia

Brunei

Vietnam

Malaysia


Philippines

Hong Kong

Taiwan

South Korea

North Korea

Japan

China

ASEAN + 3 Bond Market Forum

Australia

• Phase 3 focusing on

implementation of SF1

and concluding SF2 work

• Market guide updates

• Country visits

• NMPG build-up

• SWIFT Involvement:

Report reviews

Market Guide updates

NMPG build-up Singapore

Planned for 2014-15

NMPG existing ID Business Forum 2015

Cross-Border Settlement Infrastructure

Forum (CSIF)

• CSD-RTGS linkage model

• Standardisation and harmonisation of flows and data

• ISO 20022


How Can SWIFT Help?




Agenda


How Can We Help?

for ISO 20022

• Standards experts in SG

• Compliance to standards and global market practices

• Integration and implementation support

• Capacity building and knowledge sharing Expertise

• Domestic user and practice groups

• Global SWIFT Community

• Reach-out directly to cross-border international parties Reach

• Re-use of SWIFT infrastructure

• Cost efficiency for receiving entities

• Tools to assist with operational efficiency Cost

• Proven reliable CSP used by >150 MIs globally

• Resilient, scalable, secure and operationally strong

connectivity choices and associated services Network


Strategy Design Internal

preparation Testing Go Live Operate

Business Case Solution

design

Go Live

assistance

Implementat

ion services

Testing

assistance

Support

Services

End-to-end project management

Training and knowledge transfer

Generic ISO 15022 - 20022 courses and Initiative specific training

Business

mapping

Gap analysis

New message

development

& registration

Market

practice

management

Community

testing

services

Integration services

Readiness

Portal

Business and

Technical

Impact

assessment

Community

consultation

and

implementation

strategy

MyStandards

IPLA

AMH / Access

SWIFT: Supporting SMI and community

projects end to end

Health

Check

Services

Products


Sands Expo and Convention Centre

Marina Bay Sands


gearing indonesia securities markets for growth

Economy & Finance

id fin traffic

major countries id

adoption swift

ca live live live nz

au iso

act live cn live br

cn sadc uk live iso

sendingreceiving iso