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Welcome to the ISITC Europe AGM & Conference of 2018 Birth of a new industry model Platinum Sponsor: Gold Sponsors:
Welcome to the ISITC Europe AGM & Conference of 2018
Birth of a new industry model
Platinum Sponsor: Gold Sponsors:
Welcome
Nigel D Solkhon, CEO ISITC Europe
Welcome & Thanks
• Sponsors
– Accenture – Platinum
– Broadridge, Cognizant, Torstone and Volante – Gold
• Attendees
– Please participate
– Please provide feedback
• ISITC Europe
– IELG – voluntary contribution and energy – thank you!
– Admin – Dee Radford
• Speakers
– A fantastic collection of high profile speakers – thank you!
2016 Financials
2016 Year of rediscovery and investment Membership numbers increased 100% Working Groups well attended 2 successful General Meetings 2017 Modernisation – Website, Video recording Expansion – IEAF, CISI Recognition – T2S DLT
2012 2013 2014 2015 2016
Income £36,680 £30,493 £18,390 £21,315 £8,560
Membership Fees £33,500 £28,300 £18,200 £13,800 £9,000
Annual Conference Sponsorship £3,000 £2,000 £0 £7,405 £0
ISITC Europe Sponored Members £0 £0 £0 £0 -£500
Interest £180 £193 £190 £110 £60
Expense £36,734 £26,605 £11,678 £20,595 £9,700
Conferences £12,124 £7,926 £1,546 £12,436 -£3,255
Annual Conference Expenses £7,058 £5,944 £0 £10,144 -£5,055
Quarterly Conference Expenses £666 £387 £0 £0 £1,800
US ISITC Conference Attendance of CEO £4,400 £1,595 £1,546 £2,292 £0
Support 24610 18679 10132 8159 12955
Administration 15000 13451 4034 3798 5909
Treasurer 1800 1800 1800 1800 1800
Insurance 762 605 605 605 624
Executive Committee Meeting Expenses 0 180 377 0 0
Working Group Expenses 3862 218 1333 42 0
Accountancy Fees 1420 1630 1525 1525 1525
Legal 1000 0 0 0 0
Digital Fees (Website, email) 672 231 210 237 2596
Sundry Expenses 69 309 104 27 214
Marketing 0 200 0 0 0
Postage, stationery etc. 25 55 144 125 287
Gross Balance (Income-Expense) -£54 £3,888 £6,712 £720 -£1,140
Minus Tax -£22 -£4
Net Turnover £698 -£1,144
Balance 1st January 2016 £90,051
Deficit for 2016 -£1,144
Balance 31st December 2016 £88,907
Why collaborate?
• The financial marketplace is a complex collection of competing entities with common clients, peers and suppliers
Common regulatory requirements Community approach to design and adoption
Common margin pressures Need for scale and standards
Common technology needs In-house or vendor supplied solutions
• Traditional collaboration (time and cost)
• Move to broader product and geographic services
At segment level (asset managers, custodians, brokers, vendors, etc.)
Asset class (derivatives, FX, equities)
Geographic
Cross border support and efficiency needs
• Standards • Business
• Technical
• Operational
• Resources • Collaborative approach across individual
groups
• Specialise and share
• Technology • Agree common structures and work on
commercial solutions away from the table
• Linkage with research and academia • Practical experience combined with
academic research
• Relationships • Networking with peers and clients
Changing industry footprint
Market appetite for collaboration
Digitisation
Disruptive technology
Cyber crime
Drive to efficiency
Standardisation
Operating model Improvement
Outsourcing/Offshoring End investor
Retail/Wealth/HNI
Age demographic
Market Sentiment
Bull/Bear
Asset Class/Passive/Active
Environmental issues
Political/Social/Regulatory
Brokers Asset
Managers
Custodians Admins
Outsourcers
Consultants Tech Firms
Utilities Academia
ISITC Europe community and partners
Industry associations and standard groups
Governance
Everyone has access to all workgroups or can partner with colleagues Leaders will look to partner ISITC NAM colleagues to share intelligence
Nigel D Solkhon
CEO
Dee Radford
Admin
Rob Scott
Advisor
IELG Prof. John Gavin
Rob Morel Gary Wright
Dr. Anthony Kirby
Chad Giussani Martin Sexton Paul Baybutt
Gary Wright TBC Gary Wright
TBC
IEAF DLT/
Blockchain Regulations
Industry Engagement
Standards & Data
Operations
Oversight
Technology
Trade Associations Academia
Standards Associations
Industry Participants
Industry Collaboration & Dialogue
CISI Universities
2 General Meetings and 1 AGM per year FREE Entry to ALL
Debate Solutions Support
Oasis-Open BSI Cross-pollination Solutions
Agenda 08:30-09:00 Registration with tea & coffee 09:00-09:30 Welcome and Introduction, Nigel D Solkhon, Citi and CEO ISITC Europe 09:30-10:00 Keynote 1 – The new in industry model - Keith Bear, VP, Global Financial Markets, Global Markets at IBM 10:00-11:00 Future Model – the world in 2025 - Panel session Moderated by Owen Jelf, Global Capital Markets - Industry Managing Director at Accenture Bob Santangelo, President - International Sales at Broadridge Financial Solutions; Hugh Richards, Head of Product at LSEG: Brian Collings, CEO at Torstone Technology; Fiona Hamilton, Vice President, EMEA Operations at Volante Technologies Inc 11:00-11:30 Coffee and Networking 11:30-12:30 Growth and evolution of the investor business - Panel session Moderated by Anthony Kirby, Associate Partner, Ernst & Young Clem MacTaggart, COO at Killik & Co.; Anthony Belchambers, Chairman at Saxo Capital Markets; Phil Bungey, COO at Seven Investment 12:30-13:00 ISITC US update - Lisa Iagatta, Director, Account Management at Fiserv and Vice Chair of ISITC N.A. 13:00-14:00 Lunch and Networking sponsored by Broadridge Financial Solutions Ltd 14:00-15:00 How does the academic and research community view the future model? Panel session Moderated by John Gavin, Chairman at G4H and Visiting Professor at the Guildhall School at Business and Law Nick Silver, Senior Honorary Visiting Fellow at Cass Business School and Director at Callund Consulting Limited; Peter Simons, CIMA; Nicholas Lynch, Senior Compliance Policy and Learning Consultant 15:00-15:30 Coffee and Networking 15:30-16:00 Keynote 2 – One year on Dr Kay Swinburne, MEP, Vice-Chair of the Economic and Monetary Affairs Committee 16:00-17:00 Status of Brexit and its impact on operations, regulatory framework and the industry – Panel session Moderated by Gary Wright, BISS Research Michael Cooper, CTO Radianz, BT Global Banking and Financial Markets at BT; Rebecca Healy, Lead Analyst of Financial Market Structure at Liquidnet; Dr Kay Swinburne, MEP, Vice-Chair of the Economic and Monetary Affairs Committee; Chris Skinner, Chairman at The Financial Services Club; 17:00-17:15 Closing remarks - including a prize draw for a weekend in Edinburgh for 2 people Nigel D Solkhon, Citi and CEO ISITC Europe 17:15-19:30 Drinks Reception - This year we are celebrating Burns night, sponsored by Accenture
Interactive App Test #1
• Wi-Fi code htb18 – Hilton Honors network
• Go to www.menti.com
• Use code 61 10 89
• Vote!
Interactive App Test #2
• Wi-Fi code htb18 – Hilton Honors network
• Go to www.menti.com
• Use code 61 10 89
• Vote!
Keynote 1 The New Industry Model
Keith Bear, VP, Global Financial Markets, Global Markets at IBM
Future Model – the world in 2025 Moderated by Owen Jelf, Global Capital Markets - Industry Managing Director at Accenture
Bob Santangelo, President - International Sales at Broadridge Financial Solutions Hugh Richards, Head of Products & Solutions at LSEG Technology Brian Collings, CEO at Torstone Technology Fiona Hamilton, Vice President, EMEA Operations at Volante Technologies Inc
Coffee And Networking
Please be back for 11:30
Growth and evolution of the investor business Moderated by Dr Anthony Kirby, Associate Partner, Ernst & Young
Clem MacTaggart, COO at Killik & Co. Anthony Belchambers, Chairman at Saxo Capital Markets Phil Bungey, COO at Seven Investment
ISITC US Update Lisa Iagatta, Director, Account Management at Fiserv and Vice Chair of ISITC N.A.
ISITC NA 2018 Update
• 2017 Membership
• 2017 Officers & Board of Directors
• Organizational Structure
• 2017 Accomplishments
• 2018 Goals
• Calendar of Events
• Contact Us
• Questions & Answers
2017 Membership
10%
16%
39%
30%
5%
Broker Dealer
Custodian
Investment Manager
Vendor/ Utility
Independent Member
2018 Officers
• Chair – Ms. Erica Borghi, Brown Brothers Harriman
• Vice Chair – Ms. Lisa Iagatta, Fiserv, Inc.
• Secretary – Ms. Salome Winge, Northern Trust Co.
• Treasurer – Ms. Ana Lotharius, DTCC
• Advisor to the Chair – Ms. Jan Snitzer, Loomis Sayles
2018 Directors
• Broker/ Dealer: – Evelyn Galeano, Standard Chartered Bank – Paul McSherry, Liquidnet – Carissa Warner, Morgan Stanley
• Global Custodians: – Jason Brasile, State Street Bank – Krista Sharfenberger, BNY Mellon
• Investment Managers: – Charlie Mottinger, State Street Global Advisors – Lou Rosato, BlackRock – Jason Ward, Fidelity Investors
• Vendors/ Utilities: – Paul Fullam, FIS – Kristin Hochstein, Thomson Reuters – Ted Anastasi, Fidelity Corporate Actions Solutions
Organizational Structure
• Working Groups:
– Corporate Actions
– Derivatives
– Margin & Collateral
– Reconciliation & Reporting
– Reference Data & Standards
– Securities Lending
– Settlements
Organizational Structure Con’t
• Forums: – Broker/ Dealer – Custodian – Investment Manager – Middle Office – Regulatory – Vendor/ Utility
• Committees: – Industry Engagements – Marketing
2017 Accomplishments
• US T+2
• MiFID II
• Corporate Actions
• Margin Rules
2018 Goals
• Content:
– Regulatory Initiatives
– Technology
• Membership:
– Increase by 5%
– Global Collaboration
• Leadership:
– Strategic Plan
– Meeting Structure
2018 Calendar of Events
• 24th Annual Securities Operations Summit: – March 18-21, Boston, MA
• September 2018 Meeting and Working Group Session: – September 16-18, Baltimore, MD
• December 2018 Meeting and Working Group Session: – December 2-4, West Palm Beach, FL
• https://www.isitc.org/events/2018
Lunch and Networking
Please be back for 14:00 sharp
How does the academic and research community view the future model? Moderated by John Gavin, G4H
Nick Silver, Senior Honorary Visiting Fellow at Cass Business School and Director at Callund Consulting Limited Peter Simons, CIMA Nicholas Lynch, Senior Compliance Policy and Learning Consultant
What does the financial system of the future need to look like?
ISITC Europe AGM 25 January 2018
Nick Silver
The natural world
Human society
Economy
Finance system
Global Population by region
Pressure building on the planet
• 2014, 2015 and 2016 were each the warmest years on
record.
• CO2 is now at levels unseen in 800,000 years.
• In less then a decade, we could breach the 1.5°C threshold.
26 January 2018 38
Source: Potsdam Institute, 2016; https://weather.com/news/climate/news/2017-earth-second-warmest-year-september-nasa-noaa
Global temperature projections
2
1.5
2040 2060 2080
Climate Finance Challenge ($Billion)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
Green Investment Fossil Fuel Investment Fossil Fuel Subsidies Amount spent by US on F-35 Fighter jets
Required Actual
Climate Finance Challenge ($Billion)
$84,000
$86,000
$88,000
$90,000
$92,000
$94,000
$96,000
$98,000
$100,000
$102,000
Green Infrastructure Global bond market
Required Actual
A proposal for a monetary system
• Give right to create money to oligopoly
• Ensure money creation linked to debt
• Lightning doesn’t strike twice
• Agents must have criminal record (>£bn)
• Preference lending to real estate
• Interest rate: proven track record failure
Capitalism 1.0
Capitalism 2.0/3.0
• Companies don’t employ many people
• Goods are non-rival
• Companies don’t need large capital investment
• Savings aren’t invested
• Pension prohibitively expensive
• Can’t afford to pay people idle 30 years
• Planet can’t support perpetual growth
Financial service share of GDP
(Cost of financial
intermediation constant 2%
for 130 years)
Size of derivative market
Pension Fund Country Value (US$
billions)
1 Federal Old-age and Survivors Insurance
Trust Fund
United
States
$2645
2 Government Pension Investment Fund Japan $1370
3 Government Pension Fund of Norway Norway $856
4 Civil Service Retirement and Disability
Fund
United
States
$850
5 Military Retirement Fund United
States
$474
6 National Pension Service (NPS) South
Korea
$422
7 Stichting Pensioenfonds ABP (ABP) Netherlan
ds
$388
8 Thrift Savings Plan (TSP) United
States
$407
9 California Public Employees' Retirement
System
United
States
$289.8
10 National Social Security Fund China $247.4
The Price – i
Contributions required to achieve 2/3rds pension
Year Contribution
rate
Contribution
£20,000 salary
£40,000 salary
1991 7% £1,300 £2,700
2016 39% £7,800 £15,600
Why? i
Proportion of pension fund investment that is invested into economy
Proportion invested
New issuance in the equity market: 0.5% of
52% (invested in equity):
0.25%
Non-financial corporate bonds: 9% of 29%
(invested in bonds):
2.6%
Infrastructure investment: 1%
TOTAL 3.85%
Investment compared to funds returned to
shareholders
ROC – wrong metric
ROC = return / capital
• >1/2 return goes to financial services
• System leveraged prices/ reduced returns
• Too much capital
• Capital belongs to society
• We need massive investment to avoid dangerous climate change
• Other issues require investment (e.g. antibiotics)
Pensions are supported by government, who need to preference investment:
• Sustainable infrastructure funds
• Integrated reporting/triple-bottom line accounting/CDP
• VC/crowd-funding
Example solution –
pensions
•Banks have create money through lending
•Solvency requirements preference real estate
•Either electronic money
•Or preference lending into sustainable growth through solvency
Example solution –
banks
Coffee And Networking
Please be back for 15:30
Keynote 2
One year on
Dr Kay Swinburne, MEP,
vice-Chair of the Economic
and Monetary Affairs
Committee
Status of Brexit and its impact on operations, regulatory framework and the industry Moderated by Gary Wright, BISS Research
Michael Cooper, CTO Radianz, BT Global Banking and Financial Markets at BT Rebecca Healy, Lead Analyst of Financial Market Structure at Liquidnet
Dr Kay Swinburne, MEP, vice-Chair of the Economic and Monetary Affairs Committee
Chris Skinner, Chairman at The Financial Services Club
Closing remarks - including a prize draw for a weekend in Edinburgh for 2 people
Nigel D Solkhon, CEO ISITC Europe
Thank you & Burns Night drinks reception sponsored by Accenture
Contact us: [email protected]
www.isitc-europe.com
