Larc2013 - SWIFT Securities
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Larc2013 - SWIFT Securities

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- SWIFT Securities Special Interest Sessions: Thomas Trepanier

- SWIFT Securities Special Interest Sessions: Thomas Trepanier

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  • 1. SWIFT – Matching and Post Trade Latin America Regional Conference Cartagena, Colombia Thomas Trépanier 11 – 12 July 2013
  • 2. SWIFT Latin American Regional Conference - 2013 11-12 July 2013 2 Matching and Post Trade – LARC Cartagena, Colombia Thomas Trépanier Senior Commercial Manager
  • 3. 5 Case Studies Agenda 4 SWIFT Services 3 Regulation 2 Priorities 1 Latam Trends 3
  • 4. • Larger markets preparing for the future • Medium Sized Players looking to be more competitive via Partnerships and Regional Integration • Recent crisis brought about creation of CCP’s and focus on collateral pools • Smaller markets looking to “catch up” Standards Latam Trends 4 Automation Collateral Partnerships
  • 5. The Industry Trend in Latam Follows the Globe 5 • Increased focus on eliminating manual efforts as most of Latin America uses fax, email and other proprietary methods to communicate with each other in the local markets and with other global counterparts. • A steady decline in Return on Equity in Financial services since 2008, diminishing from 25% to 12% across most major Banks. • An increasing level of regulation in order to effectively control investment activity post crisis (ie - EMIR, Dodd Frank, CSD-R), most of which mandating reporting, or automated affirmation, with at minimum punitive resultant fines for non compliance. • Around 50% of most institutions trades are not positively affirmed, and industry statistics show that a postively affirmed, or matched trade is 37 times less likely to fail. • Continual focus on cost forces institutions to find better priced, resilient solutions
  • 6. MILA - Mercado Integrado Latino Americano 6 Mexico - Grupo BMV • 138 listed companies • USD 460B Market Capitalization MILA Today • 582 listed companies • USD 650B Market Capitalization MILA Tomorrow • 720 listed companies • USD 1.1T Market Capitalization Brazil Mexico Colombia Peru Chile Brazil - BM&F Bovespa • 364 listed Companies • USD 1.2T Market Capitalization
  • 7. 5 Case Studies Agenda 4 SWIFT Services 3 Regulation 2 Priorities 1 Latam Trends 7
  • 8. Latam Priorities 8 OtherMexico ChileBrazil • Translation • Post Trade • Compliance/ Sanctions • Support migration to ISO20022 • Indeval’s Intergloval Service Bureau • Future participation in MILA • Focus on post trade space • Compliance / Sanctions • Network and messaging for COMDER • Participation in MILA • MI cross border needs • MILA = Latin American Integrated Market • Post Trade in Colombia • Compliance / Sanctions in Peru
  • 9. 5 Case Studies Agenda 4 SWIFT Services 3 Regulation 2 Priorities 1 Latam Trends 9
  • 10. The Impacts of Regulation and Market Change 10 The need to allocate, confirm and affirm trades across asset class for both economic trade information and SSI (ideally T, latest T1). With electronic methods considered essential by AFME members for the success of T2 Settlement. Matching timeframe consistency is considered desirable, in what is presently a disjointed ‘by market’ approach to settlement instruction and matching. An efficient fails process for trades that have failed is required, these fails could be reduced by increased capture in affirmation. Minimising fails, will minimise financial fines and buy-in penalties. Further downstream impact to Corporate Actions, Stock Lending, Associated FX transactions.
  • 11. 5 Case Studies Agenda 4 SWIFT Services 3 Regulation 2 Priorities 1 Latam Trends 11
  • 12. 12 • All messages exist and are already in use • They support:  Block and Allocation  Equities and Fixed Income trades  Local matching  Exchange of SSIs  Reject or Cancellation possible at each step  Exception processes Agreed market practice eases implementation Global ETC – Automating the Post Trade Space Market practice – Process flow
  • 13. 13 • Builds on ISO15022 data model • Data blocks are reused throughout the STP chain  Referencing Trade details  Settlement location and account details Agreed market practice eases implementation Global ETC over SWIFT Market practice – Message rules
  • 14. 14 The need for Global ETC over SWIFT in 2012 • There are still too many trades which are confirmed outside STP channels • Local Markets are burdened by proprietary methods of communicating with their custodian banks • As Asset Managers are going global, they are looking to embrace one single standard • Brokers need allocations to be electronic, computer-readable and STP-able • Regulatory interest in operational efficiency is high and rising The big question is: How do I address this – and reduce operating costs at the same time?
  • 15. 5 Case Studies Agenda 4 SWIFT Services 3 Regulation 2 Priorities 1 Latam Trends 15
  • 16. 98% STP 43-75% Savings 99.999% €0.07 - €0.20 “ We depend on those levels of automation being sustained at all times” (Mike Pavey, Schroders) “ the best model for us, in terms of efficiency, scalability, robustness and cost” (Lee Toms, Legal and General) Typical costs for large and small firms (2010) for ETC over SWIFT SWIFT Core Availability
  • 17. 17 Investment Manager Global Custodian Settlement Agent or CSD Broker/ Dealer Global ETC Features: - Standards Re-usability - Downstream STP - Standard industry workflow models - Secure, reliable, high- availability platform - Highly scalable Benefits: -- No dependencies – the process starts when you want it to - The same data as you use today – but it can be reused throughout the STP process - No new subscription necessary – if you’re a SWIFT user already, you’re enabled BLOCK TRADE ALLOCATION CONFIRM AFFIRM SETTLEMENT INX CONFIRMATIONS STATUS STATEMENTS SETTLEMENT INX CONFIRMATIONS STATUS STATEMENTS Global ETC over SWIFT – ISO15022 end to end
  • 18. Additional Swift Post Trade Services.. • Successful, established Accord matching platform covering multiple Asset Classes – Securities, Treasury, FXMM, Derivatives and Commodities. • Translation of multi format feeds into Swift Messages. • Lite2 Access to Swifts Network, a low cost, cloud based infrastructure access solution. • Messaging – Payments, FX, Corporate Actions, Collateral 18
  • 19. Q&A ? SWIFT Latin American Regional Conference - 2013 11-12 July 2013 19
  • 20. Kindly complete the survey form upon exiting! 20
  • 21. SWIFT Latin American Regional Conference - 2013 11-12 July 2013 21 SWIFT engaging with the community in the future EuroFinance 12-13 Nov 2013 Sao Paulo FELABAN 17-20 Nov 2013 Miami Sibos 16-19 Sep 2013 Dubai CLAB 2013 11-13 Sep 2013 Miami Webinars ongoing SWIFT.com/events AFP 20-23 Oct 2013 Las Vegas, NV
  • 22. SWIFT Latin American Regional Conference - 2013 11-12 July 2013 22 Matching and Post Trade Thomas Trépanier Senior Commercial Manager
  • 23. 23