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Larc2013 - Securities at SWIFT

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Larc2013 - Securities at SWIFT

  1. 1. Securities at SWIFT Latin America Regional Conference Cartagena, Colombia Brett Lancaster 11-12 July 2013 v07
  2. 2. Securities at SWIFT Brett Lancaster Managing Director– LARC Cartagena, Colombia SWIFT Connected sell-side firms 96% penetration by Market Cap SWIFT connected buy-side firms 88% penetration by AUM SWIFT connected AMER securities firms 822 by BIC code
  3. 3. 5 Case Studies Agenda 4 SWIFT Services 3 Latam Securities 2 Strategy 1 Voice of the Customer 3
  4. 4. Despite nervous recovery, clients tell us that the global securities industry is still being shaped by the recent crisis 4
  5. 5. While firms are trying to recover and grow, they face pressure from regulation, costs and need to improve STP 5 Voice of the Customer Regulation Growth Costs Regulatory Overload • Dodd Frank, EMIR, CSDR • Reduced settlement lifecycle • MIFID, CPSS-IOSCO, Basel III • OFAC Sanctions • … • Drive for revenue growth and/or extended reach into new market segments • Customer demand to create shareholder value • Fierce global competitors • Internal demand to manage costs and ‘do more with less’ • Continued drive to improve STP rates and efficiency • Drive for centralized architectures • Need for standardization
  6. 6. 5 Case Studies Agenda 4 SWIFT Services 3 Latam Securities 2 Strategy 1 Voice of the Customer 6
  7. 7. In response, our strategy is evolution not revolution - protect & grow the core adding value beyond messaging … 7 Strategy Drive STP and improve operational efficiency to reduce costs Drive reach, and growth through access to new segments and markets Help firms meet regulatory requirements Protect and grow the core & add value beyond messaging Anchored by global standards and Market Infrastructures Strategy
  8. 8. … whilst ensuring that the costs for core messaging are systematically and relentlessly reduced 8 Strategy
  9. 9. 5 Case Studies Agenda 4 SWIFT Services 3 Latam Securities 2 Strategy 1 Voice of the Customer 9 • Community Highlights • Latam Traffic Growth
  10. 10. SWIFT is working with the communities to drive STP, standardization, reach and regulatory compliance 10 Mexico Peru Colombia Chile Brazil • Post-trade matching with local IMs and BDs removing existing manual processes • Support Indeval’s Intergloval Service Bureau to help grow their market connectivity to local BDs • Connectivity for local MI to the Central Bank, via SWIFT • Enable communication of Corporate Actions between DTCC and local MI • Market connectivity for OTC Derivatives clearing, via SWIFT • Connectivity to allow local pension funds to settle at DTCC FundSERV and/or Euroclear FundSETTLE, via SWIFT • Connectivity of local MI to global CSDs via SWIFT • Post-trade matching with local IMs and BDs removing existing manual processes • ANBIMA Galgo and iMercado • ISO 20022 standards implementation • Proprietary format translation • Post-trade and matching Supporting Latam Communities
  11. 11. Strong growth from Latam securities – driven by clearance & settlement, statements, trade status and asset services 11
  12. 12. 5 Case Studies Agenda 4 SWIFT Services 3 Latam Securities 2 Strategy 1 Voice of the Customer 12
  13. 13. SWIFT has a number of products, services and/or initiatives that are a strategic priority for its securities practice 13 Post Trade Asset Servicing Collateral Management Sanctions Business Intelligence Standards Market Infrastructures Trade Repositories Industry Groups ISITC, ISDA, SIFMA, X9, CFTC Stds SWIFT Services
  14. 14. 5 Case Studies Agenda 4 SWIFT Services 3 Latam Securities 2 Strategy 1 Voice of the Customer 14 1. Post Trade 2. Market Infrastructures 3. Trade Repositories 4. Collateral Management
  15. 15. SWIFT offers STP solutions for Post-Trade, Pre Settlement through messaging and matching engine 15 Buy/Sell Order MT502 Execution Advise MT513 Allocation MT514 Market Confirmation MT518 Instruct Receipt / Delivery MT540-543 Settlement Confirmation MT544-547 Settlement Status MT548 Instruct Receipt / Delivery MT540-543 Settlement Confirmation MT544-547 Settlement Status MT548 Instruct Receipt / Delivery MT540-543 Settlement Confirmation MT544-547 Settlement Status MT548 Trading Venue Investors Custodian CSD Investment Manager Broker Dealer Accord Confirmation MT515 Affirmation Settlement Instructions MatchingConfirmationAllocation Affirmation MT517 Post Trade Post Trade ~450 users ~2M matches pm
  16. 16. 50 AMER securities and payments MIs use SWIFT services. Activity is focused on growing cross-border reach 16 < 1k < 25k <100k <500k <2M Monthly Volumes EC CB RTGS UY CB XB CL CB RTGS CA CPA HVP CA CB HVP US FRB Settle US FRB XB US World Bank XB CO CB XB US CB TBD AR CB XB US CME Dom BR BCB XB VE CB RTGS AN CB XB US CSD XB MX Indeval XB BB CSD HVP BR BM&F XB BR CBLC XB US DTCC Settle AR MERVAL Settle DO CB RTGS PY CB XB PE CB XB US ICE Dom BO CB XB KN CB HVP SV CB RTGS HT CB XB US CME XB US DTCC Post Trade BS CB XB CA CDS CA CU CB XB GT CB RTGS JM CB XB NI CB XB AW CB XB BB CB XB GF CB XB TT CB XB US DTCC Settle BZ CB XB CR CB XB HN CB XB US CLS XB US CLS Data SR CB XB US Omgeo Post Trade CL CB RTGS BS CB HVP US CLS XB BM CB XB CL Combanc LVP+HVP CL DCV Settle TT CB HVP CL CB TBD CL Combanc TBD US CME Dom BR BM&F XB US DTCC Settle DO CB RTGS US ICE Dom US CME XB US CLS XB US DTCC Settle US DTCC Loans BR BCB RMA CA CDS Settle US DTCC CA US DTCC CCP US FRB LVP US LCH XB US DTCC CA DO CEVALDOM CCP HN CB HVP UY CB HVP BZ CB HVP CL COMDER CCP EC CB HVP PY CB HVP 0.3 1.3 2.3 3.3 4.3 5.3 6.3 7.3 1980 1985 1990 1995 2000 2005 2010 2015 MIs Market Infrastructures
  17. 17. To broaden the value to the community, we are redefining our MI strategy 17 MI Gateway MI Services Best applies when: • Market events • Regulatory obligations, • Wholesale standards migrations New economic model • Lower cost • Bundled fees • Community pricing New MI Gateway • Has smaller interface footprint • Allows traffic segregation • Provides an alternative to MQ Service Bundling • Standards • Translation • Interoperability • MI Resiliency Service Best applies when: • Many-to-many connections • Global reach • New MI services / new installations Best applies where: • Senior relationships exist • Community market practice MI Pricing MIs MIs
  18. 18. In response to OTC derivatives regulation, SWIFT is providing connectivity solutions for Trade Repositories 18 1 2 3 4 5 Global regulation is enforcing mandatory reporting for all OTC derivatives – Dodd Frank / CFTC in U.S and EMIR / ESMA in E.U. Impacts CDS, IRS, FX, Equity and Commodities. Firms need to report trade details, primary economic terms, confirmations and valuations In U.S., one counterparty must report, but in the E.U. both counterparties must report Trade Repositories are being implemented by UnaVista, DTCC, Regis-TR, CME Group and ICE In response, SWIFT is providing connectivity between the firms and the major TRs for FpML and FIN derivative transactions, across all asset classes TRs Trade Repositories
  19. 19. SWIFT is supporting standardization for collateral management - margin call, substitution & segregation 19 CM SWIFT Collateral Management SWIFT Initiatives Standardised Market Practice Impacts Margin Call Process Regulatory Drivers 379 active users, 5.5M annual messages and 67% annual growth Bilateral & Triparty messaging ISDA, SIFMA, ISITC, CICF … Timely and accurate margin call, substitution and segregation of collateral Dodd Frank Title VII and EMIR - Expected to silo $2-4T of collateral Collateral Management
  20. 20. Securities at SWIFT Brett Lancaster Managing Director
  21. 21. Kindly complete the survey form upon exiting! 21
  22. 22. Lunch and Exhibition Hall

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