Task force group reporting

November, 2011

15th

ACG General Meeting

Seoul, Korea

-New Business Initiative Task Force

Contents

Task force overview

Task force topics

Activity in 2011

Future Plans

Task force overview

Founded in 2003

ACG7 general meeting in Indonesia

Initial members

Korea Securities Depository

Singapore Exchange

Taiwan Securities Central Depository

Thailand Securities Depository

National Securities Depository Limited (India)

Hong Kong Securities Clearing Corporation

Task force overview

Purpose Share knowledge experiences on the new service each member adopted or

is about to adopt

Strengthen cooperation between members on new business of common

interests

Expand CSD business areas in the long term

Activities Update activities through the website and the Executive Committee meeting

Select the new topic every year and conduct research

Share updates and experiences on the presentation and breakout sessions

at Cross Training Seminar

Activity report at the general meeting

Task Force Topics

YEAR TOPIC NOTES

2004 Fund Service ACG8, Taiwan

2005 Securities lending & borrowing ACG9, Japan

2006 Cross-border securities transactions ACG10, Pakistan

2007 E-Voting ACG11, China

2008 CSD Linkage ACG12, Singapore

2009 Collateral Management ACG13, Vietnam

2010 OTC Market Service ACG14, Mumbai

2011 E-Voting ACG15, Seoul

Select the research topic for 2011: E-Voting

Conducted Survey on preference among ACG members

E-Voting

What is E-Voting

• Electronic voting system that enables shareholders to access the voting platform to

exercise their voting rights without physically attending general meetings

Purpose

• Alleviate limits of physical meetings such as concentrated and overlapped meeting

places and times

• Increase opportunities to exercise voting rights for minor shareholders as well as

foreign investors

CSD roles

• Provide the voting platform and manage the data

Application

• Hong Kong, Singapore, Japan, Taiwan and Korea

Activity in 2011

The 13th ACG Cross Training Seminar

Hosted by: MSCH&CD, Mongolia, 14-15 September 2011

New Business Initiative Task Force

Presentation Session : E-Voting & New Services

- E-Voting by Thailand Securities Depository (TSD, Thailand)

- E-Voting system for corporates (CDSL, India)

- KSD E-Voting system (KSD, Korea)

- Taiwan Bills Index Rate (TDCC, Taiwan)

Breakout Session : What’s New- Sharing new service updates

- Joined by 18 members from 11 organizations

KSD, CDSL, HKEx, TDCC, CCDC, SGX, HKICL, VSD, JASDEC, KSEI, NSDL

Activity in 2011

Presentation1: E-Voting by Thailand Securities Depository

Post Trade Department of TSD, Thailand

• Designed and developed the voting platform

• Manage the platform and provide the service with skilled staff

• Consulting with the Ministry of Commerce to support E-Voting

Notes

• Reduced time on voting process on 5 minutes per agenda

• Adopted SWIFT message to enable straight through processing (STP), reduce

risks and comply with the global standard

• Working on balancing requirements from participants

• Update (as of Octobor, 2011): Not much progress due to the limitation with legal

protocol especially with our Ministry of Commerce

Activity in 2011

Presentation2: E-Voting System for corporates (CDSL, India)

New Projects of Central Depository Services (India) Ltd.

• Developed and supervised the voting system and data storage

Concept

• Internet-based facility that enables investors to cast their votes anytime anywhere

• Automated system which records votes and gives results instantaneously

• Cost efficient model as compared to physical postal ballot

Notes

• Scope of e-Voting : Postal ballot, annual general meetings and extra-ordinary

general meetings

• Controls in the system

Secured site that complies with BCP & DRS

Compliance to WCAG 2.0 (AA Standards prescribed by W3C)

Activity in 2011

Presentation3: E-Voting System (KSD)

E-Voting Part of Korea Securities Depository

• Studied the model for electronic vote infrastructure (Since 2006)

• Survey on adopting the e-voting system (2008)

• Articles of association approved by Financial Services Commission (2010.4)

• Developed the voting infrastructure and launched the system (2010)

• 5 full time personnel in operating the system

Encouraging more participation

• 37 companies in total have adopted E-Voting (As of ‘11.9)

• Hold seminars and conduct surveys among market participants

Ex) Workshop with ACGA (Asian Corporate Governance Association) members

(September, 2011)

Activity in 2011

Presentation4: TAIBIR :Taiwan Bills Index Rate

Background

• Designed and planned in order to facilitate the development of a sound financial

market by promoting the use of the short-term bill interest rate

• Planning (2009/4) → Rules established (2009/8) → Online (2009/10)

TDCC

• Developed the platform in collaboration with IT vendors

• Upload the index on its website, TAIBIR section & real-time monitoring

Promotion and application

• Valuation models completed by Bloomberg

• Market seminars: Fixed-income products markets seminars, Taipei Foundation of

Finance

• Able to be used to calculate the fair value of financial assets

• Included in the ISDA Master Agreement

Activity in 2011 •Taiwan

•Depository & Clearing

- Breakout Session

*Opportunity to share new service updates among ACG members

*Share new service updates with presentation materials or brochure

Activity in 2011

Organization Topic

KSD News update through KSD Newsletter

Presentation on Next Generation System (IT)

TDCC Presentation on STOCKVOTE

CDSL Sharing brochure on E-voting project

HKICL Presentation on Trade Repository in Hong Kong

CCDC Presentation on Bond Pricing & Personalized Reporting

Service

HKEx Presentation on RMB Equity Trading Support Facility (TSF)

Activity in 2011

Breakout session

Presentation 1. KSD Newsletter

News updates during 2Q 2011

• Opened a representative office in Hong Kong

- Assist outbound investment for participants

(Korean investors, HK investors, KDR services)

• Electronic short-term bond to be launched

- Replacing CP to promote transparent transaction

- The law on electronic short-term bond passed (August, 2011)

- Working on confirming presidential decrees and developing IT system

- System to be launched in January, 2013

Activity in 2011

Presentation 2. KSD’s Next Generation System SAFE+

Background

• Increasing market needs for the system upgrade

• System aging, lack of flexibility and scalability

• Preparation for the electronic securities system

Objectives

• Enhance customer service quality and areas with lower costs

• Process

• Formed a task force for the system upgrade (July, 2007)

• BRP consulting for 6 months

• SI project for 23 months

• Lessons learned

• Define business requirements clearly before the designing stage

• Repetition tests required in each business section

• A slight staff turnover affects the whole process

Activity in 2011

Presentation 3. TDCC

STOCKVOTE – Now & Future

• TDCC built the e-voting platform in 2008 and went online in March

2009

• Through the platform, issuers apply for shareholder meeting, provide

agenda and shareholders’ book and receive voting results

• Shareholders log in with ID to look up agenda, vote and print out

results

• Overcome physical limitations and reach out to diverse investors

and enhance convenient voting exercise

• Need to increase more participation

Activity in 2011

Presentation 4. HKICL

Trade Repository in Hong Kong

• Centralized registry maintaining an electronic database of OTC

derivatives transactions

• A new service to be offered under the Central Moneymarkets Unit

(CMU) of the Hong Kong Monetary Authority (HKMA) and developed

by the Hong Kong Interbank Clearing Limited (HKICL)

• OTC derivatives transaction records are reported to the TR

• Improve market transparency and enhance financial market stability

• Targeted for launch in September 2012

Activity in 2011

Presentation 5. CCDC

Bond Pricing and Personalized Reporting Service

• Value-added services in development

Bond Pricing Service Personalized Reporting Service

- Pricing system developed by

CCDC in 2009

- Complete and comprehensive data

including all kinds of bonds in

different market yield curves and

indices

- Applied by many government

authorities, banks, securities

companies and mutual funds

- Core indicator to observe the trend

of economics

-Bond investment report for each

investor

(Trading volume, bond depository

balance, underwriting volume..)

-Support the market monitoring of

major regulatory authorities such as

PBOC, CSRC, CIRC, MOF and

CNAO..

Breakout Session

Presentation 6. HKEx

RMB Equity Trading Support Facility (TSF) • RMB-traded equities:Key initiative in HKEx’s Strategic Plan

2010~2012

• Solution for providing sufficient and reliable RMB liquidity in Hong

Kong that support the long-term growth and stability of a RMB stock

market segment at HKEx.

• Confined to offshore RMB at least for the initial stage

• Follow existing RMB policy framework and no need to seek approval

from Mainland

• Focus on core objectives of supporting RMB equity trading, not

engaged in simply FX business

• Launch of TSF in October in 2011

Future plans

Topics for 2012

Recommended topics

- Fund Service

- Electronic securities

- Corporate action services

- Information provision services

- Others

Survey on areas of interests among ACG members

• To be conducted in January, 2012

• Share information with ACG members to further exchange information

on services they are interested in

• Upload questionnaire results on the ACG website

Future plans

Research activities

Main theme – The selected topic for 2012

- Research on common interests and current issues

- Participate in Executive Committee activities

Other topics - Provide opportunities to share during Cross Training Seminar

- Follow up on the issues of common interests among ACG members

and increase communication channels

Thank you