Slide 1

SWIFT in the Securities Business

Bagin AlexSenior Regional manager Middle East,

alex.bagin@swift.com

Slide 2

Agenda

SWIFT short intro

SWIFT in the securities market

SMPG scope

Egypt and South Africa example

Slide 3

SWIFT’s mission

SWIFT is a worldwide community of financial institutions whose purpose is to be the leader in communication solutions enabling interoperability between its members, their market infrastructures and their end user communities.

Slide 4

SWIFT - A customer centric user community

Banks

IMI's

Corporates

InsuranceCompanies

Payments MI's

GovernmentInstitutions

Trustees

Broker-Dealers

Payment Systems

Clearing & SettlementSystems

Depositories

Stock Exchanges Securities MI’s Customer

Slide 5

Traffic stats (1) August 2007 YTD

Slide 6

Traffic stats (2) August 2007 YTD

Slide 10

Agenda

SWIFT short intro

SWIFT in the securities market

SMPG scope

Egypt and South Africa example

Slide 11

Example

IMIIMI B/DB/D

CustodianCustodian ClearerClearer

BankBank

CSDCSD

Trading and Confirmation

Settlement Instructions

Settlement Instructions

Settlement Instructions

Settlement Instructions

Cash / FX Cash / FX

Cash / FX

Slide 12

ExampleEquities Transaction Lifecycle

IMIIMI B/DB/D

CustodianCustodian ClearerClearer

BankBank

CSDCSD

SWIFTNet FIX + FIN

FIN FIN

FIN FIN

FIN FIN

FIN

Slide 22

Securities Strategic Priorities (set by the industry)

Market Space Strategic Priorities

Be the messaging platform of choice for

market infra-structures

Succeed in Pre trade /Trade messagingPre-trade / Trade

Equity and fixed income

Platform of choice for Post-trade / Pre-set.

Post Trade /Pre-settlement

Grow traffic in Clearing and Settlement and Custody services

Clearing and Settlement

Custody Services

Drive Industry towards

Standards convergence

Become messaging platform of choice for the Funds industry in Middle East and AfricaInvestment funds

Slide 23

SWIFT Market ShareTraditional Spaces

Clearing & Settlement

Custody Services

Corporate Actions

Reporting

55%

16%

3%

43%

Market SpaceMarket Space SWIFT Market ShareSWIFT Market Share

Slide 24

SWIFT means value

ScalabilityScalability

Straight-through-processing (STP)Straight-through-processing (STP)

International StandardsInternational StandardsCost effective solutionsCost effective solutionsSecurity and reliabilitySecurity and reliability

Slide 26

Agenda

SWIFT short intro

SWIFT in the securities market

SMPG scope

Egypt and South Africa example

SMPG scope

Create globally agreed harmonised market practices which, integrated with standards, will bring the securities industry closer to

achieving STP.

STP

StandardsStandards

Market PracticeMarket Practice

SMPG tasks

• Organise national market practice groups

• Collate national market practice rules

• Define cross-border market practice rules

• Harmonise market practice differences

• Publish market practice rules

• Identify conformance mechanisms

SMPG organisation

SMPG Steering Committee

National Market Practice Groups and

Convenors

SWIFTStandards

Broker/dealers, investment managers, custodians, depositories, regulators, & vendors

www.smpg.info

SMPG meetings

• At National level:– Whenever felt appropriate – Minimum twice a year

• At Global level– 2 times a year– Amsterdam (28-30 March 2007)

draft minutes available on smpg.info

– Boston (5-6 October 2007)

SMPG countries

• Americas: BR, CA, MX, US.

• EMEA: AT, BE, CH, DE, DK, ES, FI, FR, GR, GB, IE, IL, IT, LU, NL, NO, PL, PT, RU, SE, TR, ZA, ICSDs

• Asia/Pacific: AU, HK, JP, KR, NZ, SG, TH, TW, IN

Slide 32

Agenda

SWIFT short intro

SWIFT in the securities market

SMPG scope

Egypt and South Africa example

Slide 33

Egypt CSD market scope

CSD

26 Custodians (4 on SWIFT)

131 Brokers (20 on SWIFT)

1114 Issuers

26 Direct settlement members

13 Primary Dealers

Swiftnet

Domestic VPN

Slide 34

Egypt CSD market on SWIFT today

SWIFTNet

CSD

Custodians (4 on SWIFT)

Broker and primary dealers (20 on SWIFT on branch codes )

Swiftnet

Slide 35

Egypt CSD market on SWIFT by end of this year

SWIFTNet

CSD

Custodians (4 on SWIFT)

Broker and primary dealers 50 NEW BIC codes

Swiftnet

MI-CUG

Slide 36

Egypt CSD market scope evolution

CSD

26 Custodians

131 Brokers

1114 Issuers

26 Direct settlement members

13 Primary Dealers

Swiftnet MI-CUG

Slide 37

Agenda

SWIFT short intro

SWIFT in the securities market

SMPG scope

Egypt and South Africa example

Slide 38

SAMOS

Broker A on Behalf of Client A SETS/BDA

SARB

Broker B on behalf of Client B

SAFIRES Reservation of securities on S)

Bank A Bank B

A: Security X B: Security X

100 >100 >100

R20,000 R20,000

Payment ConfirmationPayment Order

Status intimations Status intimationsStrate Ltd

“Locked in Trade”

Confirmation Confirmation

Sell Order 100/R20,000 Buy Order 100/R20,000

CSD Participant CSD Participant

ConfirmationConfirmation

Settlement Process SFIDvP

Slide 39

Client A Client BBroker A Broker B

JSE Trading System

BDA System

SAFIRES

CSDP CSDP

SAMOS

On-Exchange Trade - SWIFT Message Flow

MT586 MT586

MT

540/

1/2

/3

MT

540/

1/2

/3

MT598-101 MT598-101

As per MT298-128As per MT298-128

MT548 MT548

MT

544/

5/6

/7

MT

544/

5/6

/7

MT548-601 MT598-113

MT515 MT515

Slide 42

SWIFT Middle East regional conference 2008

17, 18 and 19 March,

Conrad Hotel,

Cairo, Egypt

Slide 43

Shoucran