Australian Market Infrastructure Initiatives Working...2016 June 2017 Dec 2017 June 2018 Dec 2018...
Transcript of Australian Market Infrastructure Initiatives Working...2016 June 2017 Dec 2017 June 2018 Dec 2018...
Australian Market Infrastructure InitiativesPresentation to APAC SMPG
16 October 2018
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The World’s Most Respected Market Place
ASX presentation to APAC SMPG
• Overview of ASX
• Stronger foundations program
• Contemporary technology
• New generation of products and services
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ASX – a vertically integrated exchange group
ASX presentation to APAC SMPG
FY2018 revenueTotal AU$823m Rank Exchange
Market Capitalisation
(US$m)
1 CME Group Inc $ 54,593
2 Intercontinental Exchange Inc $ 41,479
3 Hong Kong Exchanges & Clearing $ 40,628
4 Deutsche Böerse Ag $ 27,499
5 London Stock Exchange Group $ 21,091
6 B3 Sa Brasil Bolsa Balcao $ 15,943
7 Nasdaq Inc $ 14,307
8 CBOE Global Markets Inc $ 12,447
9 Japan Exchange Group Inc $ 10,062
10 ASX Ltd $ 8,412
11 Singapore Exchange Ltd $ 5,988
12 Euronext Nv $ 5,194
13 Moscow Exchange MICEX-TRS $ 4,116
14 TMX Group Ltd $ 3,316
15 Bolsas Y Mercados Espanoles $ 2,883
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ASX’s market
ASX presentation to APAC SMPG
Capital formation FY18 • 137 IPOs
• Total capital raised AU$82 billion of equity
Equity markets • 2,285 listed entities
• Market capitalisation AU$2 trillion – 9th in the world
• 37% of adult population owns listed investments (6.9 million Australians)
Derivatives markets • Largest interest rate derivatives market in Asia & top 5 globally
• Notional turnover of exchange traded derivatives AU$47 trillion
• Notional value cleared in OTC AU$6.3 trillion
Foreign exchange • AUD is 5th most traded currency in the world
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Australian capital market
ASX presentation to APAC SMPG
high proportion in large cap Australian equities
via ASX
$700bin SMSF
$239b
$2.6tin super, growing to $9.4t by 2035
$1.9ttotal market cap of ASX listed equities
6.9mhold on-exchange investment
27%super held in SMSF
In AU$, ASX Investor Study 2017; ATO self-managed super fund quarterly statistical report – Dec 2017
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Stronger foundations for resilience and growth
Contemporary technology to drive efficiency and innovation
A new generation of products and services
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Stronger foundations for resilience and growth
Contemporary technology to drive efficiency and innovation
A new generation of products and services
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Building Stronger Foundations
ASX presentation to APAC SMPG
Positioning ASX to be a leader in the financial services industry and capture market growth
Dec2016
June2017
Dec2017
June2018
Dec2018
ASX NetConsolidation of six customer networks onto single platform
Secondary data centreNew location, new hardware and software
Planning and selection
BuildEvaluation
TODAY
Customer implementation
Build
Clearing risk Promoting stability in the financial system and protectingASX capital
Margin call improvements
Enterprise risk management
Jun2019
Dec2019
Migration to new site
Refresh risk management practices for operational and technology risk
Executive changes
Capital buffer strengthened
Risk modelling enhanced
Near real-time risk management
ERM and technology strategies refreshed
Rollout of enhanced policies, processes and tools
1. Included internal analysis, external consultant and guidance from both ASIC and RBA
1
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Stronger foundations for resilience and growth
Contemporary technology to drive efficiency and innovation
A new generation of products and services
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Contemporising technology platforms
ASX presentation to APAC SMPG
To support the next 20 years of growth
Richer, more timely data sets
Better operational functionality & resilience
Improved analytics
New futures platform
Operational infrastructure
Secondary data centre
ASX Net upgrade
Digital refresh
BBSW robustness
CHESS replacement
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ASX and Distributed Ledger Technology
ASX presentation to APAC SMPG
ASX has taken a world leading position in understanding DLT
ASX began considering the replacement of CHESS in 2015
We have extensively tested DLT and its application in financial markets
We have consulted widely with our stakeholders for 2 years
• Performs clearing and settlement for equities
• Stable and operates extremely well, but it is ageing
• Deeply embedded in customer’s businesses
• ASX consideration coincided with ‘peak blockchain’
• Significant POCs, prototyping and industrial strength testing
• Resulting in a solution designed for financial markets
• Founded on data privacy, flexible connectivity and standardisation
• Solving data synchronicity between market users
• 80 DLT system demonstrations to more than 500 attendees
• 60 CHESS Replacement workshops for more than 100 organisations
• Resulting in 50 new business requirements
• Focused on workflow simplification
ASX is now implementing the first scale deployment of DLT in financial markets
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Broker E
Broker F
Bank D
Bank B
Bank A
Broker C
CHESS today
CHESS today
ASX presentation to APAC SMPG
Sends messages to reconcile many and different systems
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Bank D DLT node
Broker C DLT node
Bank A DLT node
DLT-based CHESS offers flexibility and choice
ASX presentation to APAC SMPG
Connection options via DLT node or message-based like today
Bank B ISO messaging
DLT system
Broker E ISO messaging
010101010101010101010101010101
Broker F ISO messaging
14 | ASX presentation to APAC SMPG
DLT – market infrastructure that will be a business enabler ASX will be safely liberating source of truth information, encouraging innovation
Different data formats and software
Node-basedSimplification allows innovative solutions
End users
End users
End users
End users
End users
CHESS today
End users
End users
End users
End users
End users
Harmonised databases and software
DLT solution
010101010101010101010101010101
Traditional database
Distributed ledger database
Message-basedInherent complexity, slow and expensive
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CHESS replacement On track for go live in March / April 2021
*Dates subject to completion of system development, stakeholder readiness and regulatory clearance
Dec 2017Decision to use DA and DLT
Mid 2018Day 1 scope agreed
Analysis, building and testing
Stakeholder consultation and Day 1 functionality
Technology partner and software evaluation
2016 2017 2018 20212019 2020
TODAY
Evolution of DLT solutions
Upgrade of equities technologyinfrastructure
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Stronger foundations for resilience and growth
A new generation of products and services
Contemporary technology to drive efficiency and innovation
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Big Data initiative
ASX presentation to APAC SMPG
ASX is building a big data platform to deliver internal and external analytics-based use cases
The platform will also be used to serve internal/operational use cases
A data management and governance framework has been designed to control access to and usage of the data
The platform will be populated with both ASX and third party datasets
Both ASX and third parties will have the ability to build and distribute analytics solutions that use the available datasets
Revenue will be shared between data providers, analytics developers and ASX as the platform operator
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Corporate Actions STP initiative
ISSUER: structured
announcement lodged with ASX
ASX:review and release
equivalent PDF announcement to
market
ASX: Disseminate
information product – near real time,
global standardised format (STP)
Information vendor: announcement
analysis and manual? capture of
data
Intermediary (e.g. custodian): STP capture &
forward
ASX: structured information captured near real time
The golden copy
INVESTOR
Data validation & capture
Notification
Improved time, accuracy, pre-validated, reduced manual processing(Risk burden shifted to issuers – pre announcement release)
ASX: mandated structured
process via AOL
ISSUER: AOL training environment
ASX presentation to APAC SMPG
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Thank you.
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Disclaimer
ASX presentation to Global SMPG
This document provides general information only. ASX limited (ABN 98 008 624 691) and its related bodies corporate (“ASX”) makes no representation or warranty with respect to the accuracy, reliability or completeness of the information. To the extent permitted by law, ASX and its employees, officers and contractors shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided or omitted or from anyone acting or refraining to act in reliance on this information. The information in these slides is confidential and should not be disclosed to or shared with any third parties without the prior written permission of ASX.
© 2018 ASX Limited ABN 98 008 624 691