SWIFT.ppt

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


Agenda

SWIFT updateSWIFT update

Securities Market Infrastructures using SWIFTSecurities Market Infrastructures using SWIFT

ISO StandardsISO Standards


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


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%


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


Agenda





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


A world without SWIFTDifferent Standards, Messaging & Connectivity

MarketInfrastructures

User


Single Window from SWIFTReusing Standards, Messaging and Connectivity

MarketInfrastructures

User


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


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


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


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


Agenda





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


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


Stock Exchange/CSDStock Exchange/CSD


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


Stock Exchange/CSDStock Exchange/CSD


SWIFTNet FIN:Post-trade pre-settlement matching (model I)

ReceiverReceiver

CSDCSD

DelivererDeliverer

Matching utilityMatching utilityMT 515Trade

confirmation

MT 515Trade

confirmationMT 509Trade status




SWIFTNet FIN:Post-trade pre-settlement matching (model II)

ReceiverReceiver

CSDCSD

DelivererDeliverer

Matching engineMatching engineMT 540-3SettlementInstructionMT 548

Status ofinstruction



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


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


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


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


Thank youThank youfor your for your attentionattention


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


Back-up


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


Agenda


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


SWIFT usage for local intermediaries

Local CSD, Central Bank & settlement agents International Cash Correspondents Global Custodians International B/Ds


Making SWIFT cost-effective

Services

Security

Messaging soft

Connectivity soft

Network

Complete set-up

Special SN Kitsfor specific solutions


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


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


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


> 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

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