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SWIFT Business Forum 2014
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Anik Mehta, Director, Securities Market, Asia Pacific, SWIFT
SWIFT for Sri Lanka Securities Market
1
Agenda
SWIFT for Securities Market - Sri Lanka Business Forum 2014
How SWIFT is helping and can help you
The Big Picture
Securities Trends and Global Regulation
SWIFT for Securities Markets - Overview
4bMessages per year
99.999Availability
45% Securities Messages
212Countries
10k+Financial
Institutions
23Offices globally
8Offices in Asia
SWIFT for Securities Market - Sri Lanka Business Forum 2014
YOU
Customers
Financial Institutions
Securities Market
Infrastructures
Payment Market
Infrastructures
Corporates
Central
Banks
• Stock exchanges, CCPs, (I)CSDs, Trade Repositories
• RTGS, ACHs, LVPs, Central banks
• Banks (private banks, retail and commercial banks, global transaction banks,…)
• Custodians
• Broker dealers
• Asset managers
• Insurance companies
• Fund platforms
• Wealth managers
• Corporates
Access to the Financial Community
SWIFT for Securities Market - Sri Lanka Business Forum 2014
Clearing Member
Trading Member
SWIFT’s Core Activities
CCP
Stock exchangeTrading Member
Clearing Member
Asset ManagerAsset Manager
Trade Management
Collateral management
Settlement & Cash management
Trade Management
Collateral management
Settlement & Cash management
Central Matching Utility
CSDLocal Custodian
Trade Confirmation Trade Confirmation
Trade Notification
Settlement & Reconciliation
Settlement & Reconciliation
Settlement & Reconciliation
Local Custodian
Settlement & Reconciliation
Settlement & Reconciliation
Global Custodian
Global Custodian
Settlement & ReconciliationSettlement &
Reconciliation
Trade Confirmation
Trade Confirmation
Trade RepositoryTrade reportingTrade reporting
Settlement & Reconciliation
Settlement & Reconciliation
Collateral Management Collateral ManagementAsset Servicing Asset Servicing
Asset ServicingAsset Servicing
Triparty CM
Settlement & Reconciliation
Securities FinancingAsset Servicing
Post-Trade Matching
Post-Trade Matching
Agenda
SWIFT for Securities Market - Sri Lanka Business Forum 2014
How SWIFT is helping and can help you
The Big Picture
Securities Trends and Global Regulation
SWIFT for Securities Markets - Overview
- linking to other FMIs (both horizontally and vertically)
- Internationalisation/ regionalisation initiatives
- new services (like U2A, liquidity mgt, collateral), new markets (APAC, Latin Am.)
- Geographical operational hubbing by market participants
- further standardisation and automation (from proprietary to ISO)
- scalability- Compliance cost
- increased need for high quality collateral
- better manage financial shocks – regulatory principles requiring enhanced resiliency, reliability, availability
- resiliency, reliability, availability etc
- increased need for compliance data
- cyber security
- increased efficiency and transparency
- Increased reporting and control requirement
- E.g. trade reporting, PFMIs etc
Securities Markets Trends
Regulatory pressure Business risk mitigation
Operational risk mitigation
Business interoperability Cost efficiency Innovation
SWIFT for Securities Market - Sri Lanka Business Forum 2014
Principles for Financial Market Infrastructures (PFMIs)
High Value Payment Systems
Low Value Payment Systems
Central Counterparties
Central Securities Depositories
Trade Repositories
Foster financial stability
Limit systemic risk
Increase safety
Support greater
efficiency
• Published by CPSS-IOSCO• 24 principles• Issued for consultation in 2011• Finalised in April 2012• To be applied December 2012
Critical Service Providers
"With these new principles, authorities have a good basis on which to ensure a safe and stable financial infrastructure. It is essential that authorities adopt the principles, and FMIs observe them, as soon as possible". - Paul Tucker, Deputy Governor, Financial Stability, Bank of England and CPSS Chairman
HVP MI
Central Bank
Participants
Direct Participants
LVP MI
ACH
Indirect Participants
CSD / CCP / TR
Government Entities
6 key areas
REGULATION
Governance
Credit and liquidity
management
Settlement finality
Operational risk management
Access
Efficiency
SWIFT for Securities Market - Sri Lanka Business Forum 2014
SWIFT’s compliance to PFMISWIFT has identified itself as a CSP for the products & services it provides to FMIs
Communication Standards based
International Standards to be used
by FMIs supported
Resilient
99,999% availability of SWIFT services
Scalable
9k+ Participants
210 Ctries
4B FIN Msg/Y
17M FIN Msgs/D Secure
3 Layers
Operationally strong
SWIFT “DNA”
FNAO
Customer Support
FMI WAREHOUSE
√
√
√
√
√
SWIFT for Securities Market - Sri Lanka Business Forum 2014
Agenda
SWIFT for Securities Market - Sri Lanka Business Forum 2014
How SWIFT is helping and can help you
The Big Picture
Securities Trends and Global Regulation
SWIFT for Securities Markets - Overview
80+ SMI 63 countries
Securities Market InfrastructuresLive on SWIFT
AfricaEgyptKenyaSouth AfricaZimbabwe
Asia PacificAustraliaChinaHong KongIndiaIndonesiaJapanKoreaNew ZealandSingaporeSri LankaThailand
Central & Eastern EuropeArmenia BulgariaCroatiaCzech RepublicHungaryKazakhstanRomaniaRussian FederationSlovakiaSloveniaUkraine
North AmericaCanadaUSA
Central & Latin AmericaArgentinaBrazilChileMexicoEcuadorUruguay
Western EuropeDenmarkEstoniaLatviaLithuaniaNorwaySwedenSwitzerlandUnited Kingdom
EurozoneAustriaBelgiumFinlandFranceGermany GreeceIrelandItaly LuxemburgNetherlandsPolandPortugal Spain CyprusMalta
Middle EastDubaiIsraelKuwait LebanonQatarTurkey
Asia Pacific –Brunei (2015)Coming soon
All large SMIs worldwide are on SWIFTNetConnecting MIs in every continent
SWIFT for Securities Market - Sri Lanka Business Forum 2014
SWIFT and ISO 20022
SWIFT’s commitment to ISO 20022 includes
• Responsible for the maintenance and publication of the central repository for ISO 20022
• New ISO standards
• Provisioning of new standards on SWIFT network
• Support other submitting organizations • Provision of development platform, middleware and
interface• Standards consultancy & training
• ISO 20022 to the financial industry
RegistrationAuthority
Development
Implement
Promote
Tools and Services
SWIFT for Securities Market - Sri Lanka Business Forum 2014
ISO 20022 is a global standard
that also supports local needs
ISO 20022 Why ?
SWIFT for Securities Market - Sri Lanka Business Forum 2014
DTCC, US
JASDEC, JP[Post-trade]
Euroclear
Clearstream
ANBIMA, BR
T2S, EU
CSD, LI
CSD, PL
CSD, EE
CSD, LT
ASX, AU
Live
Live
ISO 20022 Adoption – Securities MI & Treasury MI – From discussion to implementation
CLS
Treasury MISecurities MI
SGX, SG
JASDEC & TSE, JP
[Corp.Act]
BN
Live CN
Live
BR, CSD
Live
KSEI, ID
Live
Live
Live
VP, DK
ISO 20022, Post-trade, CA and CMInvolved in all major APAC SMI’s projects, examples.
Clearing & Settlement• ISO 20022 strategy• High level and detailed
gap analysis review• ISO governance support
(maintenance and new)• MyStandards• Implementation support• Trainings
Corporate action (with TSE)• Specification co-writing
and maintenance• ISO governance support• MyStandards
Clearing & Settlement
• Standards strategy• Specifications review• MyStandards• Implementation support• Community engagement
Corporate action• Specification co-writing
and maintenance• ISO governance support
Corporate action • Standards strategy• Community engagement• Specification writing and
maintenance• MyStandards
Post-trade• Standards strategy
Collateral Management• Specification co-writing
and maintenance• MyStandards
SWIFT for Securities Market - Sri Lanka Business Forum 2014
Agenda
SWIFT for Securities Market - Sri Lanka Business Forum 2014
How SWIFT is helping and can help you
The Big Picture
Securities Trends and Global Regulation
SWIFT for Securities Markets - Overview
How SWIFT Can Help?
Standards, Operational Improvements
Migration and
Integration Support
Forming Connections(domestic, cross-border)
Interfaces(e.g. operational consulting, implementation, testing)
Standards Consulting(e.g. mapping, training, implementation)
After Sales
(marketing, education)
Security, Accessibility, Reliability, Resiliency, Reusability, Compliance
MI-Brokers MI-IMsMI-BanksMI-MI
LINKAGES
Community Building
ISO SupportStandards
Implementation
Training
EnablersAdoption assistance
User Groups
NMPG
ConnectivityS,M,L players
Close collaboration with
MI
Localising Operations
Partners
Vendors
SWIFT VAP
International and local standardised reach
Automation efficiency
Domestic competitiveness
SWIFT for Securities Market - Sri Lanka Business Forum 2014
Automation with CCP
SWIFT for Securities Market - Sri Lanka Business Forum 2014
Broker/Dealer Broker/Dealer
CSD, Central Banks
CCP
Another CCP
Exchangeor MTF
Custodian Paying agent
Bank Bank
Trade
Clear
Settle
Key flows Trade management and confirmation
Asset servicing
Trade settlement
Payment
Collateral Management
Post Trade Automation with SWIFT
SWIFT for Securities Market - Sri Lanka Business Forum 2014
SWIFT for Fund Distribution Players
Fund Processing Hubs
Distributors
Fund service providers
Fund providers
Fund ManagersHedge Funds
Pension Providers
BanksBroker DealersInsurance CompaniesClosed User Groups for IFA’s
ICSD’s CustodiansStock ExchangesOrder Routing PlatformsCSD’s
Transfer Agents/Registrars
Accounting AgentsCustodians
Trustees
SWIFT for Securities Market - Sri Lanka Business Forum 2014
Automation and Standardisation helps faster communication and shortening
processing time
SWIFT for Securities Market - Sri Lanka Business Forum 2014