nybf 2014 - spotlight on latin america
DESCRIPTION
TRANSCRIPT
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
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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.
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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
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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
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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)
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C/P
C/P
SWIFTNet
Accord for Treasury
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Strong growth from Latam securities – driven by clearance
& settlement, statements, trade status and asset services
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Value add from SWIFT
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“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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• Kindly complete the survey form and submit upon exiting
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Thank you
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