The Road to 2015

The Road to 2015 An update on SWIFT initiatives

Malene McMahon

Stacy Rosenthal

14 April 2015

SWIFT Business Forum Canada - 14 April 2015

Agenda

• Corporates

• Standards

–Standards Release 2015

–MyStandards and the

Readiness Portal

• LEI

• SWIFTRef

• Q&A

Corporates


Common Business Objectives

Better visibility to

cash

Automation/STP

Mitigate risk

Maintain compliance / Strengthen

controls

Improve operational efficiency

Reach

Traffic

Segments

Innovations

16% global Reach increase

• 43% of Fortune 500 on SWIFT

• Americas: highest regional Reach growth (40% vs. 2013)

• Europe: highest Reach impact (121 vs. 107 in 2013)

Very strong FIN and FileAct growth: 22% and 42% respectively

• MT940/MT942 represent 77% of traffic received on FIN

• Half of new corporates are mid-caps (below 1 USD Billion)

• Leading cloud treasury solution providers have adopted Lite2 for

Business Applications

• Half of the top20 SCORE banks are adopting MyStandards

• 3SKey shows a significant adoption in the top 20 segment for

securing e-banking portals – 40 banks subscribed

• The adoption of the BPO trade settlement instrument expands

from Asia to Germany, Belgium & Turkey

• Over 60% of the corporates using SWIFTRef are not connected

5

2014 highlights Strong year-on-year growth

Per corporate turnover & banking partners

Corporates by

annual turnover (USD Billion)

Corporates by

number of banking partners

$1-10Bn

28%

>$10Bn

31%

<$1Bn

41%

73% of SWIFT-connected corporates

deal with 5 banks or more

42% of SWIFT-connected corporates

have a turnover <$1Bn°

6

Corporate connectivity

° < 1 Bn or revenue number not available

> 10 Bn 30%

1-10 Bn 27%

< 1 Bn 42%

> 10 Bn

1-10 Bn

< 1 Bn > 20 banks 25%

b/w 10 and 20 banks

24%

b/w 5 and 9 banks 24%

less than 5 banks 27% > 20 banks

b/w 10 and 20 banks

b/w 5 and 9 banks

less than 5 banks

7

Top3 of MTs

sent

% of FIN traffic

sent

Cumulative % of

FIN traffic sent

Growth

(2014 vs 2013)

MT 101 43% 43% 26%

MT 103 34% 77% 9%

MT 300 10% 87% 14%

FIN traffic

Top sent & received messages

Payments & statements 2014 versus 2013 growth

Top3 of MTs

received

% of FIN traffic

received

Cumulative % of

FIN traffic received

Growth

(2014 vs 2013)

MT 940 50% 50% 26%

MT 942 27% 77% 22%

MT 900 8.5% 86% 29%

New mission for the Corporate market

8

To be the most preferred secure network

for multi-banked corporates globally

THE MOST

PREFERRED

SECURE NETWORK

FOR

MULTI-BANKED

CORPORATES

GLOBALLY

Easy: plug-and-play integration with certified applications

Valued: wider range of messages, containing richer information

The highest levels of security, availability, reliability and resiliency

Integrity: better counterparty identification

Scope: for any multi-banked organisation, regardless of size; for

any volume of traffic, any number of banks

Reach: any financial and regulatory counterparty in 215 countries

Inclusion: preferred by corporates in all geographies

Defined by the Corporate Advisory Group in February 2014

Standards


Standards Release 2015 Categories 1, 2 and 9 – Payments

• Letter option F is added to field 59a

• Usage rule added for multiple occurrences of /INS/ in field 72

• Include HR (Croatia) in the country code list for IBAN validation

• Timestamp field added to reporting messages for liquidity

monitoring

• All Payments messages:

– CN (Chinese CNAPS) clearing code added to party fields

– Validation on white metal currency codes XAG, XAU, XPD,

XPT


Messages impacted: MT 103, MT 103 STP, MT 103 REMIT, MT 202 COV, MT 205 COV, MT 900, MT 910)

Categories 1, 2 and 9 – a later release Remove free format option from field 50 and field 59


Jan – July 2015 Community does an impact analysis

Aug 2015 Payments Maintenance Working Group

agrees on a date or dates

Sep – Oct 2015 Country vote to confirm dates

Dec 2015 Board ratifies the country vote

Standards Release 2015 Category 3 – Treasury Markets

• Additional jurisdiction codes in regulatory reporting sequences

• New Execution Venue field and Timestamp fields for execution,

confirmation and clearing date and time

• New fields and sequences to support exotic currency derivatives,

such as

• Optional Early Termination

• Non Deliverable Barrier & Binary

• Variance, Volatility and Correlation swaps

• Average Rate Options and Forwards

• Average Strike Forward

• Double Average Options and Forwards

• New subsequence in MT 370, for details of parties that do not have a

Business Identifier Code (BIC) (when reporting on behalf of clients)


Messages impacted: MT 300, MT 304, MT 305, MT 306, MT 340,

MT 341, MT 360, MT 361, MT 362, MT 365, MT 370

Standards Release 2015 Categories 5 and 6

• Corporate Actions, Trade Initiation and Confirmation, and

Collateral Messages

– No changes

• Settlement and Reconciliation Messages

– New fields and qualifiers to allow transparency when reporting collateral on

statement of holdings

– Addition of a new code for re-hypothecation of collateral in order to align with

other messages

– Definition changes of denied reason codes and expected settlement date

• Commodities

– Additional jurisdiction codes in regulatory reporting sequences

– New validation to ensure quantity of white metals (palladium, platinum and

silver) is quoted in gold ounces (GOZ)


Standards Release 2015 Category 7 – Trade Finance

• Definition update to be in line with UCP 600 rules

• Discussions ongoing for revamp of Category 7 in a later

standards release


MyStandards – a collaborative web platform

MyStandards

&

Readiness Portal

A repository of standards

information

A way to share information with

your clients/ participants

A testing tool for your clients /participants

Financial

Institutions

Market

Infrastructures

Market

Practice

Groups

44 premium organisations

35 market practice groups

12,000+ registered users

MyStandards continues to grow

16

https://www2.swift.com/mystandards/group/SWIFT India

Bank to corporate segment

• 10 out of the top 20 banks on MyStandards

for this segment

• More than 1,000 portals already created by

customers in the last year

• Growing interest from corporates and vendors

MyStandards and the Readiness Portal What needs do they fill?

• Creating and maintaining

customer facing documentation

• Staying current with the annual

standards revisions

• Testing and on-boarding of

correspondents / corporate

clients

– Testing is often a manual

exchange of emails containing

sample messages. This is time

consuming and frustrating for both

the bank and the client.

18

Statements

MT940

camt

Payments

US

MT101

Payments

Canada

ISO 20022


MyStandards for Release Management

Select node to

see details

Change is

highlighted

Description of

change request


Legal Entity Identifier (LEI)


LEI – ISO 17442


Core LEI Record Attributes – Public database

Record creation date Last update date Record maintenance state Expiry date of the record (when applicable) Entity Status (active, dissolved, etc.) LEI code Registered name (Exact official name - Transliteration) Registered address / Country Headquarters address Local Business Registry identification

Additional Record Attributes

Legal form Ultimate parent LEI (hierarchy) Immediate parent LEI (hierarchy)


LEI Format


LEI = 18!an 2!n

Example

•HB7FFAZI0OMZ8PP8OE26 • Society for Worldwide Interbank Financial Telecommunication

SCRL/CVBA

• Avenue Adèle 1 1310 – La Hulpe BELGIUM

Code

Check Mod 97

Global LEI System

Global LEI Foundation

LEI Issuer

LEI Issuer LEI Issuer


Regulatory Oversight Committee

Industry / Public / Regulators / Vendors

Statistics (27 Mar)


• GMEI Utility

– Total records 167,572

–US 81,688 49%

–EU 47,164 28%

• All Endorsed LOUs

– Total records 345,590

–GMEI Utility 49.1%

• Registration status

– Lapsed 59,801 17%

Reference data


Instruments Counterparty Market data Transactions Reporting

LEI

Useful links


www.swift.com/lei

swiftref.swift.com/bic-lei-directory

www.gmeiutility.org

www.gleif.org

www.leiroc.org

SWIFTRef


SWIFT Reference Data

30

• A single source of bank reference data

• Automate the data entry, validation, and maintenance processes across all

payments

• Improve payment STP and reduce payment rejections

• Decrease research time when exceptions do occur

Comprehensive Bank Data Automate data validation & maintenance processes

Integrate with bank master table

Data Gathering

ABA#

SWIFT BIC

Bank / Branch Addresses

Global Banking Authorities

National IDs

Local ACHs

IBAN / SEPA

T2 ISO No SWIFT connectivity required.

Accurate

Reference

Data


SWIFTRef Entity Plus

• This new SWIFTRef directory will provide a single source for entity

identifiers used worldwide and within a variety of financial systems and

regulatory policies

– LEIs, GIIN (FATCA) codes, BICs, the main national sort/clearing

codes and other identifiers will be cross-referenced for all legal and

operational entities listed

• As a promotional incentive, the first file in the Entity Plus package is

made available already today and free of charge for all our customers

• The file contains the complete set of LEIs issued to date by the globally

endorsed Pre-Local Operating Units (LOUs) worldwide.

– It consolidates these data in the common data file format and is

updated monthly (daily updates will be available in the future)

Once other files, besides the consolidated LEI file become available in the Entity Plus, the package will

become a payable product


http://www.leiroc.org/publications/gls/lou_20131003_2.pdf





Online Tools

API Web Services

Internet

Manual File Downloads

FileAct

Internet Internet

Distribution Overview

Download Automation

Daily Feeds

TXT

XML

Formatting

SWIFTRef API Web Services

New delivery channel

Offering:

• Real-time identification and validation of specific reference data, available in

the SWIFTRef utility

• Standard web-call services between your user applications / interfaces and the

SWIFTRef utility

API Web Services

SWIFTRef

web server

Swiftrefdata.com

Internet

Thank you

Q&A

Please provide us with your feedback!

• Kindly complete the survey form on the app or on the paper

form and submit upon exiting


CBF 2015 WiFi Access:

Network: O&B ARCADIAN

Password: clearbluesky55

Technology

The Road to 2015