Larc2013 - SWIFT Securities

SWIFT – Matching and Post Trade

Latin America Regional Conference

Cartagena, Colombia

Thomas Trépanier

11 – 12 July 2013

SWIFT Latin American Regional Conference - 2013 11-12 July 2013 2

Matching and Post Trade –

LARC Cartagena, Colombia

Thomas Trépanier

Senior Commercial Manager

5 Case

Studies

Agenda

4 SWIFT

Services

3

Regulation

2

Priorities

1 Latam

Trends

3

• Larger markets preparing for the future

• Medium Sized Players looking to be more competitive

via Partnerships and Regional Integration

• Recent crisis brought about creation of CCP’s and focus

on collateral pools

• Smaller markets looking to “catch up”

Standards

Latam Trends

4

Automation

Collateral

Partnerships

The Industry Trend in Latam Follows the

Globe

5

• Increased focus on eliminating manual efforts as most of Latin America uses

fax, email and other proprietary methods to communicate with each other in

the local markets and with other global counterparts.

• A steady decline in Return on Equity in Financial services since 2008,

diminishing from 25% to 12% across most major Banks.

• An increasing level of regulation in order to effectively control investment

activity post crisis (ie - EMIR, Dodd Frank, CSD-R), most of which

mandating reporting, or automated affirmation, with at minimum punitive

resultant fines for non compliance.

• Around 50% of most institutions trades are not positively affirmed, and

industry statistics show that a postively affirmed, or matched trade is 37

times less likely to fail.

• Continual focus on cost forces institutions to find better priced, resilient

solutions

MILA - Mercado Integrado Latino Americano

6

Mexico - Grupo BMV

• 138 listed companies

• USD 460B Market

Capitalization

MILA Today


• USD 650B Market

Capitalization

MILA Tomorrow


• USD 1.1T Market

Capitalization

Brazil

Mexico

Colombia

Peru

Chile Brazil - BM&F Bovespa

• 364 listed Companies

• USD 1.2T Market

Capitalization

5 Case

Studies

Agenda

4 SWIFT

Services

3

Regulation

2

Priorities

1 Latam

Trends

7

Latam Priorities

8

Other Mexico Chile Brazil

• Translation

• Post Trade

• Compliance/

Sanctions

• Support migration

to ISO20022

• Indeval’s

Intergloval Service

Bureau

• Future participation

in MILA

• Focus on post

trade space

• Compliance /

Sanctions

• Network and

messaging for

COMDER

• Participation in

MILA

• MI cross border

needs

• MILA = Latin

American

Integrated Market

• Post Trade in

Colombia

• Compliance /

Sanctions in Peru

5 Case

Studies

Agenda

4 SWIFT

Services

3

Regulation

2

Priorities

1 Latam

Trends

9

The Impacts of Regulation and Market Change

10

The need to allocate, confirm and affirm trades across asset class for both

economic trade information and SSI (ideally T, latest T1). With electronic

methods considered essential by AFME members for the success of T2

Settlement.

Matching timeframe consistency is considered desirable, in what is presently a

disjointed ‘by market’ approach to settlement instruction and matching.

An efficient fails process for trades that have failed is required, these fails could

be reduced by increased capture in affirmation. Minimising fails, will minimise

financial fines and buy-in penalties.

Further downstream impact to Corporate Actions, Stock Lending, Associated

FX transactions.

5 Case

Studies

Agenda

4 SWIFT

Services

3

Regulation

2

Priorities

1 Latam

Trends

11

12

• All messages exist and are already in

use

• They support:

Block and Allocation

Equities and Fixed Income trades

Local matching

Exchange of SSIs

Reject or Cancellation possible at

each step

Exception processes

Agreed market practice eases

implementation

Global ETC – Automating the Post Trade Space

Market practice – Process flow

13

• Builds on ISO15022 data model

• Data blocks are reused throughout the

STP chain

Referencing

Trade details

Settlement location and account

details

Agreed market practice eases

implementation

Global ETC over SWIFT

Market practice – Message rules

14

The need for Global ETC over SWIFT in 2012

• There are still too many trades which are confirmed outside STP channels

• Local Markets are burdened by proprietary methods of communicating with

their custodian banks

• As Asset Managers are going global, they are

looking to embrace one single standard

• Brokers need allocations to be electronic,

computer-readable and STP-able

• Regulatory interest in operational

efficiency is high and rising

The big question is: How do I address this – and reduce operating costs

at the same time?

5 Case

Studies

Agenda

4 SWIFT

Services

3

Regulation

2

Priorities

1 Latam

Trends

15

98%

STP

43-75%

Savings

99.999%

€0.07 -

€0.20

“ We depend on those levels of

automation being sustained at all times”

(Mike Pavey, Schroders)

“ the best model for us, in terms of efficiency,

scalability, robustness and cost”

(Lee Toms, Legal and General)

Typical costs for large and

small firms (2010) for ETC over

SWIFT

SWIFT Core Availability

17

Investment

Manager

Global

Custodian

Settlement

Agent or

CSD

Broker/

Dealer

Global ETC

Features:

- Standards Re-usability

- Downstream STP

- Standard industry workflow

models

- Secure, reliable, high-

availability platform

- Highly scalable

Benefits:

-- No dependencies – the

process starts when you

want it to

- The same data as you use

today – but it can be reused

throughout the STP process

- No new subscription

necessary – if you’re a

SWIFT user already, you’re

enabled

BLOCK TRADE

ALLOCATION

CONFIRM

AFFIRM

SETTLEMENT INX

CONFIRMATIONS

STATUS

STATEMENTS

SETTLEMENT INX

CONFIRMATIONS

STATUS

STATEMENTS

Global ETC over SWIFT – ISO15022 end to end

Additional Swift Post Trade Services..

• Successful, established Accord matching platform covering

multiple Asset Classes – Securities, Treasury, FXMM,

Derivatives and Commodities.

• Translation of multi format feeds into Swift Messages.

• Lite2 Access to Swifts Network, a low cost, cloud based

infrastructure access solution.

• Messaging – Payments, FX, Corporate Actions, Collateral

18

Q&A

?


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20


SWIFT engaging with the community in the future

EuroFinance

12-13 Nov 2013

Sao Paulo

FELABAN

17-20 Nov 2013

Miami

Sibos

16-19 Sep 2013

Dubai

CLAB 2013

11-13 Sep 2013

Miami

Webinars

ongoing SWIFT.com/events

AFP

20-23 Oct 2013

Las Vegas, NV


Matching and Post Trade

Thomas Trépanier

Senior Commercial Manager

Larc2013 - SWIFT Securities

Business

Transcript of Larc2013 - SWIFT Securities