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SWIFT Business Forum New York

5 March 2014

Malene McMahon, SWIFT

Stacy Rosenthal, SWIFT

The Road to 2015

#BFNY

The Road to 2015 (SWIFT2015 Strategy) 18 Initiatives in 4 Key Areas

Deepening the Core Expanding the Core

Enabling Interoperability and TCO Reduction

Interface

Hosting Services

High-End

Interfaces

Low-End

Connectivity Go Local

Enabling Transformation

Brand Platform Innovation People CSR

Reference

Data Sanctions Matching

Custody &

Asset

Servicing

RTGS Corporates Correspondent

Banking

Clearing &

Settlement

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The Road to 2015 (SWIFT2015 Strategy) Context

• Evolving context since

SWIFT2015 took

shape

– Increased regulation

– Sanctions, KYC, AML

– Cyber crime

– Asian expansion

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Securities and Standards Highlights

MyStandards and the new Readiness

Portal are revolutionizing how the

community manage, implement

messages and test market practices

MyStandards

From CICI to GMEI, DTCC/SWIFT’s

newly re-branded utility is the leading

provider of LEI’s globally LEI

DTCC are transforming the US corporate

actions landscape with their introduction

of real time messages and ISO 20022

formats

Corporate

Actions

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Payments & Corporates Highlights

Corporates have seen tremendous

growth and the value proposition

continues to evolve Corporates

eBAM is a great example of the evolution

of CGI (Common Global Implementation)

and market collaboration and innovation eBAM

eStatements is an example of sticking to

the core and reusing existing

infrastructure to support further

automation

eStatements

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Corporates

Corporate Adoption – Executive summary – 2013

New corporate groups in 2013 173 (20% vs. 2012)

20%

10% 70%

Americas

Asia Pacific

EMEA

Traffic (FIN 31% FileAct 41% Q4 2013 vs. Q4 2012)

Bank adoption

908 banking groups

offering corporate connectivity

46 banking groups certified

573 banks (BIC8)

117 countries

Corporate Group adoption (BIC8)

3SKey: 36 banking groups

BPO: 55 banking groups

31%

FORTUNE Global 500

On SWIFT

1200+ Corporate

groups connected

Corporates Steady growth

8

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000

0

20

40

60

80

100

120

140

160

Jan-1

0

Ma

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Jul-1

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Sep-1

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v-1

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Jan-1

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Jul-1

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Sep-1

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v-1

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Jan-1

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Jul-1

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FIN

Mo

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ly T

raff

ic

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orp

ora

tes S

en

din

g /

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IN

Americas Corporates Growth MTs Sent and Recieved

AMER represents 19% of

the global corporates, but

contributes 43% of the

traffic

Total number of AMER

corporates = 199, across

FIN, FileAct and InterAct

Corporates MT798 adoption

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20+ banks are live (15 of the TOP20 trade banks)

Saudi Aramco, ArcelorMittal, Alcatel-Lucent,

MGB Metro Group Buying,

Safran, Voith Finance, The Volvo Group,

GE, Villeroy and Boch, E ON, Nokia,

Seaboard Corporation, Sandvik, FLSMIDTH, …

+10 Corporates live

or implementing

Registered corporates 258

Connected to SWIFT 56%

Countries 28

Corporates

SWIFTRef Adoption

258 Corporates adopted SWIFTRef in 2013

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From concept to adoption

eBAM

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Efficiency gains

Base language End-to-end ?

Early adopters

Easy Electronic Bank

Account Management

Benefits BAM

Expectations

Best practices

Back-office investments

Business models Awareness building

Alternative to paper

Accessible Automation Ambitious

Multi-bank Mandates Messaging

solution

Market demand

Building blocks

Electronic Bank Account Management

(eBAM)

CGI* Working Group (WG4)

• Focused on providing a forum for corporations, banks and vendors to collaborate on fostering broad adoption and enhancing the quality, effectiveness and efficiency of electronic bank account management standards and processes around the world.

Objective

• Simplify implementation for both corporations and banks by developing common usage of fields in the messages.

• Define a harmonized set of ISO 20022 eBAM messages that will facilitate the progress toward adoption of the standard.

13 *Common Global Implementation

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Automating bank statements

eStatements

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eStatements

The Solution

An initiative to standardize the electronic receipt of period end bank statements

An eStatement is a PDF electronic copy of a corporation’s period end statement that is transmitted securely over SWIFT to the account owner

For legal, audit and compliance purposes corporations need to standardize the receipt of this information

• Index of information for archival and search capabilities

• In XML format to include in the zip file payload providing information including:

•Bank BIC

•Acct #

•Period Date

•Statement type

In addition to intra-day and end of day reporting (CAMT, MT940/942s, BAI2) for cash management and reconciliation

Adoption – 2 Corporates / 6 Banks

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MyStandards

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MyStandards MyStandards

Readiness

Portal

Product Showcase

Ramp up

Clients

Faster

Self

Service

Testing

Customer

Service

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From CICI to GMEI

LEI

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Global LEI System

•International financial market regulators

•Upholds governance principles and oversees

that global LEI system functions for public

interest

•Plenary and Executive Committee

• Oversees functioning of the COU, operational

integrity and implementation, maintenance of

standards specified by the ROC

• Appointed and overseen by ROC, composed

of stakeholders from financial & non-financial

firms

• Ensure application of uniform operational

standards and protocols to maintain uniqueness

of LEI and high data quality

• Manage federation through LOUs

• Maintain central logical database

• Provision of LEI functions

• Service providers, local business registries,

numbering agencies

Local Operating Unit (LOU)

Local Operating Unit (LOU)

Local Operating Unit (LOU)

Central Operating Unit (COU)

Board of Directors

Regulatory Oversight

Committee

Governance

Operations

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CFTC

Regulatory requirements (Part 45)

• Reporting firms must identify themselves and counterparties

with certified CICIs

• Reporting firms must keep records of transactions

• Reporting firms must report transactions to registered swap

data repositories

• Effective since April 2013

• Major Swap Participants / Swap Dealers

http://www.cftc.gov/PressRoom/PressReleases/pr6563-13

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ESMA

EMIR - Requirements

• Central role for ESMA

– With Local / National supervision

– Moving OTC Derivatives to centralised clearing (CCPs)

– Standardisation of OTC Derivatives contracts

– Increased market transparency via reporting to Trade Data

Repositories

• Reporting obligations start February 2014

http://www.esma.europa.eu/page/European-Market-Infrastructure-Regulation-EMIR

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DTCC/SWIFT Utility

• International Financial Industry

(GFMA) selected DTCC/SWIFT

bid

• CFTC selected DTCC/SWIFT

solution for CICI

• Launch of CICI Utility at

www.ciciutility.org

• ROC Global Endorsement of

CICI Utility

• Re-branding of CICI Utility to

GMEI Utility at

www.gmeiutility.org

• Transition into Global LEI System

8 July 2011

24 July 2012

21 August 2012

3 October 2013

24 January 2014

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Utility Statistics (a/o 1 February)

• Statistics

– Total records 109,545

• Regional split

– US 61,566 56.2%

– EU 29,531 27.0%

– Total countries 154

• All endorsed LOUs

– Total records 160,433

– Total countries 164

– GMEI Utility 68.2%

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Useful links

www.swift.com/lei

swiftref.swift.com/bic-lei-directory

www.gmeiutility.org

www.leiroc.org

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DTCC’s Transformation Initiative

Corporate Actions

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© DTCC DTCC Non-Confidential (White)

Phase 1 New Data Model

o Implemented new data

model which eliminates proprietary function codes and file formats in favor of ISO 20022 messaging

o Updated internal systems to support ISO 20022 messages

Corporate Actions Transformation Project Milestones

28 DTCC Confidential (Yellow)

2010 2011/2012 2012/ June

2014 2014/2015 2015/2016

Project Timeline

Phase 2 Announcements

o Introduced ISO 20022

announcements messages for distribution, redemption and reorganization events

o Pilot testing of ISO 20022 announcement messages

o Launched new

announcements browser

o Implemented XBRL

o Implemented message delivery over SWIFT network

Phase 3 Distribution Events

o Introduced ISO 20022

lifecycle messages for distribution events

o Pilot testing of ISO 20022 distribution lifecycle messages

o Introduce new distributions browser functions

o First time ever acceptance of inbound elections on distribution events (EDS)

o Retire PBS/PTS distributions functions – 5,239 users, 83% of 6,288 corporate action users

o All distributions processing takes place on new browser

Phase 4 Redemption Events

o Introduce ISO 20022

lifecycle messages for redemption events

o Introduce new redemptions browser features

o Retire PBS/PTS redemptions

functions

o All redemption processing takes place on new browser

Phase 5 Reorg Events

o Introduce ISO 20022 lifecycle

messages for reorg events o Introduce new reorg browser

features o Retire PBS/PTS reorg

functions – 1,049 users, 17% of 6,288 corporate actions users

o All reorg processing takes place on new browser

Announcements Lifecycle Processing

Ongoing efforts – Onboard to ISO 20022 and retire CCF announcement files in 2015

ISO 20022 Corporate Actions Messages

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MX Identifier* ISO 20022 Message Names Abbreviated

Name

Equivalent

ISO 15022

Messages

1 seev.031.002.04 Corporate Action Notification CANO MT564

2 seev.033.002.04 Corporate Action Instruction CAIN MT565

3 seev.036.002.04 Corporate Action Movement Confirmation CACO MT566

4 seev.037.002.04 Corporate Action Movement Reversal Advice CARE MT566

5 seev.039.002.04 Corporate Action Cancellation Advice CACN MT564

6 seev.040.002.04 Corporate Action Instruction Cancellation Request CAIC MT565

7 seev.032.002.04 Corporate Action Event Processing Status Advice CAPS MT567

8 seev.034.002.04 Corporate Action Instruction Status Advice CAIS MT567

9 seev.041.002.04 Corporate Action Instruction Cancellation Request Status Advice CACS MT567

10 seev.035.002.04 Corporate Action Movement Preliminary Advice CAPA MT564

11 seev.038.002.04 Corporate Action Narrative CANA MT568

12 seev.042.002.04 Corporate Action Instruction Statement Report CAST New

13 seev.044.002.04 Corporate Action Movement Preliminary Advice Cancellation Advice CAPC MT564

SWIFT _ DTCC _ Corporate Actions * SR2013 Versions

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