How can SWIFT be used on the Russian Securities Market?Steven PalstermansHead of Russia, CIS & Mongolia

Eligibility criteria 27 SWIFT user categoriesSWIFT CommunityMembersNon shareholding MembersSub-membersBrokers & DealersCentral Depositories & clearing InstitutionsSubsidiary Providers of custody & Nominee ServicesRecognised Exchanges for Securities & related financial InstrumentsFund AdministratorsIMIsMoney BrokersNon shareholding Financial Inst.Trading InstitutionsRegistrar & Transfer AgentsTrust or Fiduciary Services CompaniesRepresentative OfficesTravellers Cheque IssuersSecurities Proxy voting AgenciesTreasury ETC Service ProvidersSecurities Electronice Trade Confirmation Service ProvidersSecurities Market Data ProvidersFinancial Market RegulatorsTreasury CounterpartiesCorporatesParticipants in MA-CUGsPayments System ParticipantsSecurities System ParticipantsCREST Participants

CIS : Traffic ShareSource : FIN_per Sales Area

Russia : Messages by marketRussiaCIS

Aug/2008GrowthPayments18.10%Securities74.07%Treasury10.20%Trade14.01%Total21.84%

Aug/2008GrowthPayments15.75%Securities72.79%Treasury11.75%Trade10.40%Total18.77%

Russia : Weight Domestic Traffic per MarketWeight:54%Weight:26%Weight:70%Weight:15%

Securities Market Infrastructures on SWIFT>80 institutions from 50 countriesHong Kong Exchanges and ClearingHong Kong Monetary Authority (CMU)Hong KongEstonian Securities DepositoryOMXEstoniaMCSD MISR for Clearing, Settlement and DepositoryEgyptCentral Securities Depository Bank of GreeceGreeceEurex Clearing Clearstream Banking AG MTSGermanyCaja de ValoresArgentinaFranceFinlandCzech RepublicCroatiaCanadaBrazilBelgiumAustriaAustraliaEuroclear France Euronext Paris MATIF MTSNCSD Finland APK OMXUNIVYC

Sredisnja Depositarrna AgencijaCDSCBLCEuroclear BelgiumEuroclear Bank MTS National Bank of BelgiumOeKBAustralian Securities ExchangeAustraclearKelerKSEIEuroclear UK & IrelandHungaryIndonesiaIrelandEuroclear Nederland MTSNetherlandsRBNZ AustraclearNZX LtdNew ZealandThe National Depository CenterDepository Clearing Company Russian FederationNational Depository for Securities KDPWPolandBanco de Portugal SITEME MTSPortugalVPSNorwayS.D. IndevalMexicoClearstream Banking SALuxemburgOMXLithuaniaMidclearCentral DepositoryLebanonBank of Latvia Central Depository OMXLatviaKorea Securities DepositoryKoreaCentral Securities DepositoryKazakhstan Stock ExchangeKazakhstanBank of Japan JasdecJapanCCG Monte TitoliItalyTel Aviv Stock ExchangeIsraelCentral Bank of Sri Lanka (LankaSecure)Sri LankaDIFXUAE - DubaiReserve Bank of ZimbabweZimbabweISE Settlement and Custody Bank INCTurkeyThe Central Depository (Pte) LtdMonetary Authority of SingaporeBank of SlovakiaCDCPSingapore

SlovakiaChicago Mercantile Exchange Clearing Corporation DTCC Federal Reserve Banks Omgeo Options Clearing CorporationUSAEuroclear UK & Ireland LCH.Clearnet London Stock ExchangeUnited KingdomThailand Securities Depository Co. Ltd.ThailandTaiwan Depository & Clearing CorporationTaiwanSIS SIS x-clearSwitzerlandNCSD Sweden VPC OMXSwedenIberclear MEFF MTSSpainSTRATE JSE LtdSouth AfricaCentral Securities Clearing Corporation KDDSloveniaDenmarkOMXVP

How can we talk to each other in one language: ISO Standards?

Existing standards working groups for CSDsGiovannini working groupsGlobal CSD working groupConsolidate CSD views on standards

National Market Practice Groupswww.smpg.info NMPG countriesNMPG countries specified on EIG

Market Need Manual data entry problemCSDIssuerIssuerIssuerRegistrarInvestorCustodianOn-Line(very few markets)ISO 15022

Market need Corporate ActionsChallengesSignificant shortfall in message quality and market practice complianceLimitations of software vendor solutionsDifficult business case management buy-in for improvement projects

DriversLosses / risk mitigation Operational efficiencyReducing costsRegulatory complianceCustomer ServiceMaximise portfolio performanceAchieve scalabilityThe Drive for STPStandards

Market practice and tools Best practices

Simulation Testing and Qualification Service (STaQS)Test MT 564 Notification and MT 566 Confirmation messages for compliance to market practice a health check for Corporate Actions messages

What can you do with this service?Measure conformanceIdentify improvement areasBenchmark progressImprove counterparty automationSTaQS for Corporate Actions

How to make it easier and cheaper to use SWIFT?

Low volume customers80%18%

2%Messages per dayLow volume customersMedium volume customersHigh volume customers

Product Easy to order, install and use SWIFT security FIN and FileAct enabled Attractive price Available now.Simple connectivity

Attractive pricing

4,0006501 EUR/itemItems/monthEUR/monthPay as you goFlat Fee1 item = 1 FIN MT, or 1 FileAct chunk of 100 KB, sent or received850Monthly billing200Subscription for 1 year, tacitly renewed, cancellation with 3 months notice

Questions?

Thank you

Giovannini working groups:SWIFT Standards has held meetings with CSDs in support of its efforts to remove barrier 1. Non-EU CSDs have joined ie Russia and SIS. They all benefit from the exchange of information which takes place and learning about how ISO standards can help support their needs. The idea of the Global CSD working group is to facilitate these discussions going forward.We have also had bi-lateral discussions with Jasdec and DTCC. Both would welcome a group whereby they could exchange ideas and get input into how their requirements can be met based on experiences of other CSDs

Existing CSD associations:Conversations on standards and messaging needs also take place today within existing CSD associations but this information doesnt always get exchanged between them.

SMPG:Many CSDs, particularly in Europe, are actively involved in their respective NMPGs and at SMPG. This allows them to exchange info with their participants but is not a forum for them to exchange information between themselves.Corporate Actions is an established business process. The top priority is to improve, enhance, or even implement automation to reduce costs, improve efficiency and reduce risk. In practice there are still manual processes, and, the back-office nature of CA makes it difficult to get attention for IT funding priorities. However, the drivers to automate are significant and justify improvement in CA automation.The primary motivation for securities firms to improve their corporate actions processing is risk mitigation and other motivators include improving operational efficiency and regulatory compliance.. The ultimate goal and final benefits of automating the CA process is Straight Through Processing or the more likely goal is to automate the less complex events and re-direct your staff to the more complex high risk events. I must depart this slide with my all time favorite quote, which somehow seems appropriate here. This said byTim Lind, when he was at tower group now at Omgeo:Before embarking on a project to automate the processing of corporate actions, its useful to remember the ancient Corporate Actions proverb: Grant me the serenity to accept complex corporate actions that I can not automate, the courage to automate the actions that I can and the wisdom to know the difference.