Established 2004 Networking, debates andspeakers you dont usually     meet elsewhere  Chatham House Rule
What we doNetworking   Media Research    Advice
Recent Speakers  Brett King, Author, Bank 2.0 and     Willem Buiter, Chief           Vernon Hill, Vice Chairman,        Fo...
CAS-WGThe Clearing & Settlement Working Group (CAS-WG)• A WORKING GROUP• Interpretation of Regulatory Change on Clearing &...
CAS-WG• Subject Groups   – Market Infrastructure Subject Group Chair: Kathleen Tyson-Quah of     Granularity Ltd   – Regul...
Agenda• Update from the Market Infrastructure Subject Group   – Kathleen Tyson-Quah, CEO of Granularity and Chair• Panel D...
Agenda16:00• Update from the Technology Standards Subject Group   – Virginie O’Shea, AITE Group and Chair• Update from the...
Agenda• Update from the Market Infrastructure Subject Group   – Kathleen Tyson-Quah, CEO of Granularity and Chair• Panel D...
Granularity                                                 Ltd                                         Specialists in Fin...
GranularityOverview of CAS-WG MI Group                               Ltd                                                  ...
GranularityIntroducing EMIIT                                                   Ltd                                        ...
GranularityEMIIT for LCH-Clearnet                         Ltd                                       Specialists in Financi...
GranularityEnrichment                                                      Ltd                                            ...
GranularityPossible uses                                                Ltd                                               ...
Agenda• Update from the Market Infrastructure Subject Group   – Kathleen Tyson-Quah, CEO of Granularity and Chair• Panel D...
Agenda16:00• Update from the Regulations Subject Group   – Greg Caldwell, Senior Partner at aSource Global Limited, Chair•...
Regulation Subject-groupCombination implications    E.g. “Short Selling Regulation…LCH going…to impose penalties and buy-i...
Regulation Subject-groupConclusions From Last Session (October)       — Because financial institutions don‘t want to attra...
Regulation Subject-groupCopyright Greg Caldwell 2012
Agenda16:00• Update from the Regulations Subject Group   – Greg Caldwell, Senior Partner at aSource Global Limited, Chair•...
CAS-WG Technology Standards        Co-chair Virginie O’Shea (post-trade technology analyst at Aite                Group)
Technology Standards Group Agenda• To identify the common message standards and  data requirements for post-trade space re...
Aims• Tracking industry standards and market  practices progress – living document• Identify areas of common interest• Map...
European-level standards setting       framework – via ESMA• ID standards: Mention of LEI, BIC and BEI;  unique trade iden...
Areas of Focus  Topics closest to the top of your agendas that  we should focus on initially:• New data standards – LEI, U...
Agenda16:00• Update from the Regulations Subject Group   – Greg Caldwell, Senior Partner at aSource Global Limited, Chair•...
UPDATE:LEI Initiative & Implementation Of CFTC   Compliant Interim Identifier (CICI)          Andrew Douglas        awdoug...
CFTC CICI Implementation•    CFTC Swap Record Keeping and Reporting Rule (Part 45)      – Reporting firms must identify th...
CFTC CICI Implementation – Industry RFP process held in early 2012 – DTCC/SWIFT solution chosen by CFTC as the CICI Utilit...
CICI utility development•   Volume continues to build. Opened with 24,000 CICIs on August 21, 2012     – Since then 9,800 ...
Structured ISO LEI 17442 Number•   All CICIs issued prior to November 30, 2012 constructed using a random 18    character ...
Some planned CICI system enhancements• Federation of Registration and Validation• Expanded Multi Language Support• New ISO...
Agenda16:00• Update from the Regulations Subject Group   – Greg Caldwell, Senior Partner at aSource Global Limited, Chair•...
CAS-WGThe Clearing & Settlement Working Group (CAS-WG)• A WORKING GROUP• Interpretation of Regulatory Change on Clearing &...
CAS-WG• Subject Groups   – Regulation   – Technology Standards   – Market Infrastructures• If you want to join a Subject G...
Christmas Party  Tomorrow Night35 New Broad Street     (IOD Hub)
Clearing and Settlement Working Group Meeting, 11th December 2012
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Clearing and Settlement Working Group Meeting, 11th December 2012

  1. 1. Established 2004 Networking, debates andspeakers you dont usually meet elsewhere Chatham House Rule
  2. 2. What we doNetworking Media Research Advice
  3. 3. Recent Speakers Brett King, Author, Bank 2.0 and Willem Buiter, Chief Vernon Hill, Vice Chairman, Founder, Movenbank Economist for Citigroup Metro Bank (UK)Andrew Tyrie, Chairman of the Peter Ayliffe, Chief Executive Sir Win Bischoff, Chairman,Treasury Select Committee of Visa Europe Lloyds Banking Group
  4. 4. CAS-WGThe Clearing & Settlement Working Group (CAS-WG)• A WORKING GROUP• Interpretation of Regulatory Change on Clearing & Settlement Infrastructures the City (and EU/Global)• Liaison with Regulatory Authorities• Technical infrastructure focus• The MiFID Forum
  5. 5. CAS-WG• Subject Groups – Market Infrastructure Subject Group Chair: Kathleen Tyson-Quah of Granularity Ltd – Regulations Subject Group Chair: Greg Caldwell, Senior Partner at aSource Global Ltd – Technology Standards Subject Group Chair: Virginie O’Shea, Lead Analyst with Aite Group and Grame Austin, CEO, ISITC Europe
  6. 6. Agenda• Update from the Market Infrastructure Subject Group – Kathleen Tyson-Quah, CEO of Granularity and Chair• Panel Discussion of EMIR and other regulatory impacts on post-trade – John Fortescue, VP Prime Services, Credit Suisse Securities Europe – Dave Grace, Post-Trade Securities Strategy, Global Operations, Barclays Bank• Break (15:30)
  7. 7. Agenda16:00• Update from the Technology Standards Subject Group – Virginie O’Shea, AITE Group and Chair• Update from the Regulations Subject Group – Greg Caldwell, Senior Partner at aSource Global Limited and Chair• Presentation and discussion of LEIs – Andrew Douglas, Head of Government Relations in Europe, DTCC – Graeme Austin, ISITC Europe• Close (17:15)
  8. 8. Agenda• Update from the Market Infrastructure Subject Group – Kathleen Tyson-Quah, CEO of Granularity and Chair• Panel Discussion of EMIR and other reuglatory impacts on post-trade – John Fortescue, VP Prime Services, Credit Suisse Securities Europe – Dave Grace, Post-Trade Securities Strategy, Global Operations, Barclays Bank• Break (15:30)
  9. 9. Granularity Ltd Specialists in Financial Infrastructure CAS-WG MARKET INFRASTRUCTURE Kathleen Tyson Quah Granularity Ltd ktq@granularityltd.com +44 777 166 200011/12/2012 CAS-WG Plenary Meeting 9
  10. 10. GranularityOverview of CAS-WG MI Group Ltd Specialists in Financial Infrastructure• 6 meetings in 2012• Key themes: – Evolving regulation of cleared and uncleared OTC products and support infrastructure needs – Margin asset eligibility and collateral management – Mapping market infrastructure complexity (EMIT) – Price discovery and reference rates (LIBOR) – Integration of new data standards (LEI, ISDA OTC Derivatives Taxonomy, Unique Swap Identifiers)11/12/2012 CAS-WG Plenary Meeting 10
  11. 11. GranularityIntroducing EMIIT Ltd Specialists in Financial Infrastructure Enriched Market Infrastructure Illustration Tool11/12/2012 CAS-WG Plenary Meeting 11
  12. 12. GranularityEMIIT for LCH-Clearnet Ltd Specialists in Financial Infrastructure 11/12/2012 CAS-WG Plenary Meeting 12
  13. 13. GranularityEnrichment Ltd Specialists in Financial• Self-enrichment or community enrichment Infrastructure (e.g., Facebook and/or Wikipedia models) • Market infrastructure maintains current information • Market users supplement information with additional relevant analysis, applications and/or commentary• Decision-relevant information • Rules and legal framework • Regulation and supervision • Performance data • Volumes and flows • Processing timelines and requirements • Data standards and processing templates 11/12/2012 CAS-WG Plenary Meeting 13
  14. 14. GranularityPossible uses Ltd Specialists in Financial Infrastructure• Buy-Side and Sell-side use to map participation – Better planning of infrastructure integration projects – More efficient management of complex infrastructure processing – More efficient liquidity and asset planning/projections• Consultation to user groups on proposed changes – Rules (e.g., Margin requirements or eligibility) – Processing requirements• Test lab for – Regulatory changes – Processing changes11/12/2012 CAS-WG Plenary Meeting 14
  15. 15. Agenda• Update from the Market Infrastructure Subject Group – Kathleen Tyson-Quah, CEO of Granularity and Chair• Panel Discussion of EMIR and other reuglatory impacts on post-trade – John Fortescue, VP Prime Services, Credit Suisse Securities Europe – Dave Grace, Post-Trade Securities Strategy, Global Operations, Barclays Bank• Break (15:30)
  16. 16. Agenda16:00• Update from the Regulations Subject Group – Greg Caldwell, Senior Partner at aSource Global Limited, Chair• Update from the Technology Standards Subject Group – Virginie O’Shea, AITE Group and Chair• Presentation and discussion of LEIs – Andrew Douglas, Head of Government Relations in Europe, DTCC – Graeme Austin, ISITC Europe• Close (17:15)
  17. 17. Regulation Subject-groupCombination implications E.g. “Short Selling Regulation…LCH going…to impose penalties and buy-ins on anything that clears on EquityClear. Equity trades will also be captured by CSD-R and its settlement discipline regime, so in the case of a UK Equity clearing at LCH and settling at Crest we face the situation where we get hit for the same trade in two places - LCH under short selling and Crest under CSD-R.”‗Test lab‘ approach 18 Copyright Greg Caldwell 2012
  18. 18. Regulation Subject-groupConclusions From Last Session (October) — Because financial institutions don‘t want to attract the attention of the regulator, industry groups can be very useful to represent them anonymously. — Regulation subject-group‘s main use is in the areas of: 1) inventory of what‘s important; 2) combinatorial implications. — Scope limitation o We will take the perspective of a UK location o We will only look at functions of the trade life-cycle — Participants dimension o Participants need to be broken down further by their category as qualifying under the relevant regulation. Many regulations with different categorisation makes this unwieldy — We will use the MiFID categorisation as a basis for this. 19 Copyright Greg Caldwell 2012
  19. 19. Regulation Subject-groupCopyright Greg Caldwell 2012
  20. 20. Agenda16:00• Update from the Regulations Subject Group – Greg Caldwell, Senior Partner at aSource Global Limited, Chair• Update from the Technology Standards Subject Group – Virginie O’Shea, AITE Group and Chair• Presentation and discussion of LEIs – Andrew Douglas, Head of Government Relations in Europe, DTCC – Graeme Austin, ISITC Europe• Close (17:15)
  21. 21. CAS-WG Technology Standards Co-chair Virginie O’Shea (post-trade technology analyst at Aite Group)
  22. 22. Technology Standards Group Agenda• To identify the common message standards and data requirements for post-trade space resulting from regulation• To examine and highlight adoption of specific formats and standards used by market infrastructures – message requirements etc• To highlight work that is currently ongoing within the industry around data standards and market practices in the post-trade space -highlight any conflicts or gaps
  23. 23. Aims• Tracking industry standards and market practices progress – living document• Identify areas of common interest• Map to clearing and settlement lifecycle – where are standards lacking? Are regulators developing practical requirements?• Which data standards are currently being used by the incumbent market infrastructures?
  24. 24. European-level standards setting framework – via ESMA• ID standards: Mention of LEI, BIC and BEI; unique trade identifier; unique product ID• Clearing and settlement – market practice implications of CSDR and EMIR• Trade repository reporting market practices
  25. 25. Areas of Focus Topics closest to the top of your agendas that we should focus on initially:• New data standards – LEI, UPI, USI, UTI etc• Messaging standards – FIX, ISO, FpML etc• Market practices for C&S process- allocation, confirmation, affirmation, settleme nt , low tech clients, reconciliation
  26. 26. Agenda16:00• Update from the Regulations Subject Group – Greg Caldwell, Senior Partner at aSource Global Limited, Chair• Update from the Technology Standards Subject Group – Virginie O’Shea, AITE Group and Chair• Presentation and discussion of LEIs – Andrew Douglas, Head of Government Relations in Europe, DTCC – Graeme Austin, ISITC Europe• Close (17:15)
  27. 27. UPDATE:LEI Initiative & Implementation Of CFTC Compliant Interim Identifier (CICI) Andrew Douglas awdouglas@dtcc.com December 2012 © DTCC
  28. 28. CFTC CICI Implementation• CFTC Swap Record Keeping and Reporting Rule (Part 45) – Reporting firms must identify themselves & counterparties with CICIs on transactions submitted to registered swap data repositories (SDR) – Effective reporting dates : – October 12, 2012 for Interest Rate and Credit, or upon registering as a swap dealer or MSP (Dec 31, 2012) – January 10, 2013 for FX, Commodity and Equity Derivatives: or upon registering as a swap dealer or MSP – Transactions between two non swap dealers or two non-major swap market participants follow 3 months later - April 10, 2013 – All non-major swap market participants are expected to self- register for a CICI, or certify its CICI record if registered by another party, by April 10, 2013 and to maintain the record thereafter – The CFTC‘s Q&A on the start of swap data reporting clarifies all this at: http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/startr eporting_qa_final.pdf © DTCC 29
  29. 29. CFTC CICI Implementation – Industry RFP process held in early 2012 – DTCC/SWIFT solution chosen by CFTC as the CICI Utility on July 24th 2012 – Launch Date of CICI Utility: August 21, 2012 at www.ciciutility.org – CICI expected to transition into global LEI solution; governance framework implementation targeted for March 2013 © DTCC 30
  30. 30. CICI utility development• Volume continues to build. Opened with 24,000 CICIs on August 21, 2012 – Since then 9,800 registrations via the ciciutility.org portal – 5,800 additional registrations by bulk file• In November made two changes to meet FSB Guidance: – Changed from Third Party Registration to Assisted Registration (explicit permission required) – Changed the structure of the ISO 17442 number issued for all new CICIs• Implemented Bulk Files for Self Registration and Assisted Registration – Receiving heavy volume from asset managers looking to obtain CICIs to update Master Agreements per the ISDA Protocol• Building out global federation in partnership with ANNA and others – WM Daten (Germany) has received an LEI prefix from the FSB• Continue to share information about the solution in anticipation of other OTC Derivative reporting rules – e.g., ESMA, Japan, Hong Kong © DTCC 31
  31. 31. Structured ISO LEI 17442 Number• All CICIs issued prior to November 30, 2012 constructed using a random 18 character alphanumeric string, followed by two check digits.• October 24, 2012, FSB announced its decision to build a structured number to facilitate a federated operating model – essentially each LOU will have a different 4 character prefix• CICI Utility implemented the new structured number on Nov. 30, 2012.• FSB stated that ―This approach does not affect ISO 17442 compliant numbers issued prior to that date. Once the global LEI system is in place, pre-LEI codes issued according to the ISO 17442 standard will be transitioned into LEIs, subject to meeting the agreed global LEI standards…..‖• CICIs issued prior to November 30, 2012 will not change, will continue to be used for the entities to which they are assigned, and will transition into the global LEI system, once operational. © DTCC 32
  32. 32. Some planned CICI system enhancements• Federation of Registration and Validation• Expanded Multi Language Support• New ISO 17442 Fields (HQ address, company registration number, entity expiry date & reason)• Bulk Certification File• Push notifications/API for file downloads• Web search Improvements• Additional Payment Methods © DTCC 33
  33. 33. Agenda16:00• Update from the Regulations Subject Group – Greg Caldwell, Senior Partner at aSource Global Limited, Chair• Update from the Technology Standards Subject Group – Virginie O’Shea, AITE Group and Chair• Presentation and discussion of LEIs – Andrew Douglas, Head of Government Relations in Europe, DTCC – Graeme Austin, ISITC Europe• Close (17:15)
  34. 34. CAS-WGThe Clearing & Settlement Working Group (CAS-WG)• A WORKING GROUP• Interpretation of Regulatory Change on Clearing & Settlement Infrastructures the City (and EU/Global)• Liaison with Regulatory Authorities• Technical infrastructure focus• The MiFID Forum
  35. 35. CAS-WG• Subject Groups – Regulation – Technology Standards – Market Infrastructures• If you want to join a Subject Group, sponsor the CAS-WG or more on the Financial Services Club – email: events@fsclub.co.uk or admin@balatroltd.com – tweet: @FSClub• Next plenary meeting planned for February 2013
  36. 36. Christmas Party Tomorrow Night35 New Broad Street (IOD Hub)

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