“AMEDA Messaging Hub”Mohamed Abdel SalamChairman & Managing Director

CSD to CSD Links Globally, their drivers and current Initiatives

ASIA▫ASEAN + 3 countries investigating regional

settlement solutions for cross-border investments in bonds

▫since 2001, CSD to CSD links in Korea, Indonesia, Malaysia, Philippines and Thailand

▫Most Asian CSDs are linked to one another with a number of them having links with European, North American and Australian markets as well.

Europe▫European markets are linked to each other

through CSD to CSD links - either directly or indirectly.

▫European CSDs are also linked to many other CSDs in major international markets, such as the US and Japan.

▫Link-Up Markets has established a common infrastructure to streamline CSD to CSD.

▫XNET - An initiative in the Mediterranean countries spearheaded by Greece.

North America ▫DTCC in the United States is linked to markets

in Canada, South America, Europe and Asia through CSD to CSD links. Canada, in turn, is also linked directly to markets in Europe and South America.

South America ▫Depositories such as CBLC (Brazil), DCV (Chile)

and INDEVAL (Mexico) are linked to European, North American and Canadian Markets through CSD to CSD links. There are also plans currently underway to link various South American countries to one another. These include:

▫Mexico to Brazil, ▫Mexico to Colombia, ▫Brazil to Colombia, and;▫Chile to Mexico.

High Costs of multiple CSD to CSD Links

•The costs of establishing CSD to CSD links are numerous.

•CSDs have maintained more than one CSD to CSD link. For each CSD link, the following costs need to be considered at a minimum:▫Message conversion, and;▫Ongoing maintenance of the links

Current Scenario CSD Level

Proposed Scenario

Converter infrastructure

Routing through the Hub

Benefits of a 2 Node Approach

•Support for messaging standards across Africa and Internationally,

•Provide fault tolerance, scalability, and reliability,

•Enable Service-based tools,•Provide easy process deployment and

changes,•Provide Component-level security,

Benefits of a 2 Node Approach

•Enable Run-time monitoring, tracing, and logging.

•Enable Shared costing leading to Lower cost•Limit costs by only requiring two data centres

, meaning less space and less coordination between operations staff.

•Ensure that all systems are connected to both copies of data, so that if a node fails the system (of the Hub) keeps its up-time.

Considerations to be addressed

•Settlement volumes/demand and regional initiatives to increase trading and settlement

•Cash Settlement processes for each country and co-operation amongst Central Banks

•Processing of Corporate Actions and the scope , implication and operation of Custodial Services to service member CSDs

Considerations to be Addressed

•Legal/Regulatory/Political barriers•Currency Regimes and Tax Regimes•Sophistication of CSDs and the means of

communication (SWIFT, WAN, etc.)

Benefits of the Hub

•Commercial Benefits•Financial Benefits•Strategic Benefits•Regulatory Benefits

Recommendations - The AMEDA Board

•Approve the Adoption of the European Linkup Markets Approach within the AMEDA to gain leverage on the financial, infrastructure or legislative aspects.

Recommendations - The AMEDA Board

• Technical, • Technological infrastructure

needs • Collect the necessary data

from all interested members to better understand their individual needs

• To develop a meaningful business case for this initiative.

• Providing the model for AMEDA member collaboration in terms of how AMEDA can effectively plan and execute the initiative at hand.

• Sanction initiative and give the green light for a feasibility study to build the business case

Approve the standardisation Task Force to find study and solutions to enable AMEDA members benefits: