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Gearing indonesia securities markets for growth

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What are the current hot topics on the minds of securities players globally? How is SWIFT involved in these initiatives and what progress is being made? How do these initiatives relate to the global, regional and domestic securities marketplace? Come along to this session to get an update on the securities landscape of activities globally, regionally and in Indonesia.

Alexander Kech, Head of Securities Market Infrastructures & Standards, SWIFT

Colin Brooks, Global Head Sub-Custody and Clearing, HSBC Securities Services, HSBC

Published in: Economy & Finance
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Gearing indonesia securities markets for growth

  1. 1. Gearing Indonesia’s Securities Market For Growth SWIFT Business Forum Indonesia, April 2015 Alexandre Kech, Head of Securities, Asia Pacific, SWIFT Jean Chong, Manager, SMIs, Asia Pacific , SWIFT
  2. 2. How Can SWIFT Help? Securities Markets Trends Progress with ISO 20022 Adoption Domestic and Regional Project Themes Agenda ID Business Forum 2015
  3. 3. - Horizontal and vertical linkages among MIs - Internationalisation/ regionalisation initiatives - New services (like U2A, liquidity mgt, collateral) - “Hubbing” of operations - Refocus to other markets (APAC, LATAM) - Format and messaging standardisation - Automation and best practice - Pressure to lower fees and margins with higher volumes - increased need for high quality collateral - better manage financial shocks - Need for enhanced resiliency, reliability, availability - Resiliency, reliability, availability etc - Increased need for compliance data - Cyber security - Increased efficiency and transparency - Increased reporting and control requirement - E.g. trade reporting, PFMIs etc Securities Markets Trends Regulatory pressure Business risk mitigation Operational risk mitigation Business interoperability Cost efficiency Innovation ID Business Forum 2015
  4. 4. Americas, 20% Asia Pacific, 13%EMEA, 67% Upward Trending FIN Messaging ID Business Forum 2015 8.2 9.0 10.0 11.4 14.0 15.3 14.9 16.0 17.6 18.2 20.1 22.9 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 FIN Average Daily Traffic Messages (millions)
  5. 5. ID Ranked 10th in APAC for FIN Traffic Sent ID Business Forum 2015 ID FIN Traffic, 2014 0 2 4 6 8 10 12 14 16 18 20 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 8 8 9 10 10 12 14 16 19 20 8 8 9 10 9 11 10 11 11 12 Traffic sent (mil) Traffic received (mil)
  6. 6. Top 10 Message Types ID Business Forum 2015 Major countries ID is sending traffic to – US (46%), UK (17%), ID (12%) Major countries ID is receiving traffic from – US (46%), ID (20%), UK (8%)
  7. 7. How Can SWIFT Help? Securities Markets Trends Progress with ISO 20022 Adoption Domestic and Regional Project Themes Agenda ID Business Forum 2015
  8. 8. DTCC, US JASDEC, JP [Post-trade] ANBIMA, BR T2S, EU CSD, LI CSD, EE CSD, LT ASX, AU ISO 20022 Adoption – Securities MI & Treasury MI CLS Treasury MISecurities MI SGX, SG JASDEC & TSE, JP [Corp.Act] Live CN Live BR, CSD Live NSD, RU VP Lux VP Sec DK AMBD, BN Live KDPW CCP, PL NBB-SSS, BE KSEI, ID Live Live ABMF CSIF ID Business Forum 2015
  9. 9. IPFA SEPA,EU BR DK CH FED, US CPA, CA IPFA T2, EU AU Zengin, JP CNAPS, CN IN Low- value High- value BOJNet, JP CPA, CA Live Live Live NZ SG CO PE Live PG CL ZA PL BN CNAPS, CN SADC UK Live ISO 20022 Adoption – Payments MI ID Business Forum 2015
  10. 10. ISO 20022 Adoption – SWIFT for Funds GB CH AU TW SE FI NO IE ES IT GR EE BE NL LU KRUS FR DE SG HK BM AD AT BS LV PL This map shows countries where one or more players are sending/receiving ISO 20022-based Funds transactions. This includes major players such as Clearstream, Euroclear, Benefit Trust Company Funds Messaging, etc Snapshot Jan 2015 ID Business Forum 2015
  11. 11. ID Business Forum 2015 The ISO 20022 adoption mApp * Initiatives who plan to adopt the official ISO 20022 messages registered on www.ISO20022.org ISO 20022 adoption mApp adoption mApp ISO 20022 > Information provided by initiative* owners > Covers all regions & business segments > Easy to use, contribute to and maintain Facilitating adoption and fostering dialogueA free IOS tablet app, that provides an overview of initiatives adopting ISO 20022 around the world > 80 initiatives
  12. 12. How Can SWIFT Help? Securities Markets Trends Progress with ISO 20022 Adoption Domestic and Regional Project Themes Agenda ID Business Forum 2015
  13. 13. • Mis-interpretation of announcements made by issuers • Manual scrubbing of information being laborious and error-prone • Missing out CA announcements and deadlines for instructions • Standardised templates for the various event types • Automated dissemination of CA announcements and handling of instructions • New revenue sources for SMIs • Address community demands for higher quality of information and dissemination Corporate Action Standardisation and Automation Operational Risks Benefits Trends in Corporate Action Sourcing for new revenues Trending towards golden copy solution
  14. 14. Improvements to Corporate Action Processes TSE-JASDEC Corporate Action Data Flow Improvements ASX Corporate Action STP Project SGXNews CeDs service enhancements • Real time directly from issuers • On SWIFTNet • Allows for ISO15022 and 20022 • Golden copy from Issuer via ASX using ISO20022 • Increase STP, improve customer service and reduce operational risks and costs • Accommodation of international standards • In line with JASDEC PSMS upgrade • Time, cost, STP and risk efficiency for format conversion 2014 2014 2014 SWIFT involvement: - Message development - Gap analysis - Impact assessments SWIFT involvement: - Strategy development - MyStandards - Community engagement - Specification writing and maintenance - ISO governance support SWIFT involvement: - Strategy development - Community engagement - Specification writing and maintenance - ISO governance support ID Business Forum 2015 KSEI Automation of Corporate Action Processing • Aligning with international standards for messaging • Automation and timely dissemination • More efficient use of resource 2011 SWIFT involvement: - Consulting - Implementation (with SWIFT partner, Vensys – XML-MT conversion, AA upgrade, coding, standards, monitoring tool
  15. 15. India Maldives Sri Lanka Nepal Bhutan BangladeshBurma Laos Thailand Cambodia Brunei Vietnam Malaysia Singapore Indonesia East Timor Philippines Hong Kong Taiwan South Korea North Korea Japan China Renewing Technology Clearing and Settlement Projects Australia • Technological refresh • Internationalisation • Regional integration • Message standardisation • SWIFT Strengths:  SWIFT C&S automation track record  ISO standards knowledge  Past regional and global work  Reach Talking about Live or plannedID Business Forum 2015
  16. 16. Clearing & Settlement • ISO 20022 strategy • High level and detailed gap analysis review • ISO governance support (maintenance and new) • MyStandards • Implementation support • Trainings Clearing & Settlement • Standards strategy • Specifications review • MyStandards • Implementation support • Community engagement • Standards forums • Customised trainings • Standards consultancy SecuritiesMarketInfrastructureCommunity • Market practice discussion facilitation • Standards forums • Customised trainings • Standards consultancy • Community workshops • On boarding portal Contributing to Major SMI Projects Helping both MI and Community ID Business Forum 2015
  17. 17. India Maldives Sri Lanka Nepal Bhutan Bangladesh Burma Laos Thailand Cambodia Brunei Vietnam Malaysia Indonesia East Timor Philippines Hong Kong Taiwan South Korea North Korea Japan China Renewed Priority for Collateral Collateral Management Projects Australia • Funding & liquidity demands • Streamlining operations • Clearstream/Euroclear • Regulation • SWIFT Strengths:  SWIFT automation track record  ISO standards knowledge  Past regional and global work  Reach Singapore Talking about it Project planned or lifeID Business Forum 2015
  18. 18. • Automation • Straight through Processing (STP) ID Business Forum 2015 Trending with Automation and Standardisation Evolution of Funds Processing Ensuring Scalability • Establish market practice • Agree on common language • Central processing venue (usually MI) • Common communication protocol Opening distribution • Agree on common best practices • Adoption of ISO standards • Use standard network, international highway • Facilitate distribution via platforms Distributing X-border Evolution/Time
  19. 19. Emergence of Fund Platforms and Passporting Driven by market infrastructures • TAIWAN • HONG KONG • KOREA • AUSTRALIA • CHINA ID Business Forum 2015 LIVE • SINGAPORE • INDONESIA • VIETNAM • THAILAND * * Indirect SWIFT adoption via service providers: BBHi, Calastone, Euroclear THINKING Domestic X-Border ISO 20022 ISO 20022 ISO* Network Standard Regional • CN-HK Mutual Recognition • ASEAN Fund Passporting Initiatives • APEC Asia Region Funds Passport (ARFP)
  20. 20. SWIFT in Support of Regional Integration • Sharing our experience and know how • Standardising • Support Integration • Deepen Domestic Market Focus on SMIs and participants, broadening their connectivity, messaging and standards Focus on domestic markets to become interoperable for regionalization Standard infrastructure, service provider, communications , management & consultation Natural role to facilitate regional integration and harmonisation We By ID Business Forum 2015
  21. 21. Clearing & Settlement • Standards strategy • Impact assessment • Specifications review • Development of 100 new messages • Maintenance support for existing messages • MyStandards • Implementation support • Testing of systems • Etc. Clearing & Settlement • Standards strategy • Specifications writing and review • Community engagement • Implementation support • Cross-border connectivity • Regional market practice support • Local integration • Project management • MyStandards • Implementation support • Etc Regionalisation Initiatives Driving ISO 20022 adoption and cross-border communication ID Business Forum 2015
  22. 22. India Maldives Sri Lanka Nepal Bhutan Bangladesh Burma Laos Thailand Cambodia Brunei Vietnam Malaysia Indonesia East Timor Philippines Hong Kong Taiwan South Korea North Korea Japan China ASEAN + 3 Bond Market Forum Australia • Phase 3 focusing on implementation of SF1 and concluding SF2 work • Market guide updates • Country visits • NMPG build-up • SWIFT Involvement:  Report reviews  Market Guide updates  NMPG build-up Singapore Planned for 2014-15 NMPG existingID Business Forum 2015
  23. 23. Cross-Border Settlement Infrastructure Forum (CSIF) • CSD-RTGS linkage model • Standardisation and harmonisation of flows and data • ISO 20022 ID Business Forum 2015
  24. 24. How Can SWIFT Help? Securities Markets Trends Progress with ISO 20022 Adoption Domestic and Regional Project Themes Agenda ID Business Forum 2015
  25. 25. How Can We Help? for ISO 20022 • Standards experts in SG • Compliance to standards and global market practices • Integration and implementation support • Capacity building and knowledge sharing Expertise • Domestic user and practice groups • Global SWIFT Community • Reach-out directly to cross-border international parties Reach • Re-use of SWIFT infrastructure • Cost efficiency for receiving entities • Tools to assist with operational efficiency Cost • Proven reliable CSP used by >150 MIs globally • Resilient, scalable, secure and operationally strong connectivity choices and associated services Network ID Business Forum 2015
  26. 26. Strategy Design Internal preparation Testing Go Live Operate Business Case Solution design Go Live assistance Implementat ion services Testing assistance Support Services End-to-end project management Training and knowledge transfer Generic ISO 15022 - 20022 courses and Initiative specific training Business mapping Gap analysis New message development & registration Market practice management Community testing services Integration services Readiness Portal Business and Technical Impact assessment Community consultation and implementation strategy MyStandards IPLA AMH / Access SWIFT: Supporting SMI and community projects end to end Health Check Services Products ID Business Forum 2015
  27. 27. Sands Expo and Convention Centre Marina Bay Sands ID Business Forum 2015
  28. 28. ID Business Forum 2015

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