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Harmonising Market Practices for Securities Industry

This mission, initiated in December 2001, aims to create globally agreed and harmonised market practices for the securities industry. The process involves organizing national market practice groups, collating national market practice rules, defining cross-border market practice rules, harmonizing practice differences, and publishing market practice rules. The project is supported by alliances such as FIX, GSTPA Ltd, ISITC-IOA, ISSA, Securities Industry Association (T+1-US), ANNA, and others as appropriate.

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Harmonising Market Practices for Securities Industry

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  1. December 2001

  2. Mission Create globally agreed harmonised market practices for the securities industry.

  3. Process • Organize national market practice groups. • Collate national market practice rules. • Define cross-border market practice rules. • Harmonise market practice differences. • Publish market practice rules. • Identify conformance mechanisms.

  4. Alliances • FIX • GSTPA Ltd • ISITC-IOA • ISSA • Securities Industry Association (T+1-US) • ANNA • Others as appropriate

  5. SMPG Structure Steering Committee Chairman, Vice-Chairman, and 8 functional representatives S.W.I.F.T. National Market Practice Groups and Convenors Broker/dealers, investment managers, custodians, depositories, regulators, and vendors

  6. Steering CommitteeDecember, 2001 • Chairman Catherine Dias (Citibank) • Vice Chairman Niels Hougaard (VP - Denmark) • General Secretary SWIFT • Program Director Alexandre Kech (SWIFT) • Regional Directors • Asia/Pacific Shuta Okawara (Tokyo-Mitsubishi) • Asia/Pacific Henry Ingrouille (Morgan Stanley) • EMEA Adriano Capellini (Unicredito Italiano) • EMEA Open (to be elected) • Americas Genevy Dimitrion (Deutsche Bank) • Americas Sandy Dinetz (DTCC)

  7. Overview • July 1998: 14 countries • October 2001: 30 active + 10 in progress • Year End 2001: 39 countries targeted

  8. Countries - December 2001 • Americas : BR, CA, US, *AR, *CL, *MX • EMEA : AT, BE, CH, DE, DK, ES, FI, FR, GR, IE, IL, IT, LU, NL, NO, PT, RU, SE, UK, TR, ZA, eurobond market, *PL, *SL • Asia-Pacific : AU, HK, JP, KR,SG, *MY, *CN, *IN, *TH, *TW * = in progress

  9. Work items • Settlement • Corporate actions • Reconciliation • TIC

  10. New Topics in 2001 • Repos • Market representatives and SWIFT have defined the business process and also reflected the requirements on the MT540s. • Feedback from each market is required to further define common practices. • Securities Lending • US group have started defining the process with focus on crossborder trades. Feedback from each market is required to further define common practices • Funds • SWIFT and some markets produced documents and template for MT502,525,540s. Feedback from each market is required to further define common practices.

  11. 2001 Meetings • March 21-23 - Boston • ISITC-IOA - March 18-20 - Boston • June 27-29 - Brussels • June 25-26 - Pan-Euro Conference - ISITC, FIX, SMPG • June 27-29 - SMPG meeting • October - SMPG/ISITC - Oct. 14-15 - Singapore • Sibos - October 15-18 - Singapore • Nov/Dec - Steering Committee - 2002 plan

  12. Singapore Discussions Function of the message Place of Safekeeping Book Transfer Linkages Forex Cancellation MT578-586

  13. Agreed MP Documents • Available on www.swift.com: (search - smpg) • Settlement Instructions Common Business Elements • MT540-543 • MT535-536 • Statement of Holdings, Statement of Transactions • MT548-537 • Settlement Status and Processing Advice,Statement of Pending Transactions • Block Trades • Place of Settlement • When settling through multiple settlement system

  14. 2001 - Project Plan • Trade Initiation & Confirmation • v4 Equities • v4 Fixed Income • Corporate Actions • v3 Mandatory events, Mandatory w/options, Voluntaries • v2 Claims • Reconciliation • v4 Pending Trades • v4 Advice/Status • Trade Settlement - complex transactions • v4 Repurchase agreements • v4 Mutual Funds Settlement • v4 Derivatives (exchange traded)

  15. 2001 - Project Plan • Repos • v1 October 2001 • Securities Lending (Global - ISITC, RMA, SIA-US, ES) • v1 October 2001 • Mutual Funds (FIX - AU, Europe, UK, US, SWIFT) • v1 October 2001 • Market Practice Implementation • v1 October 2001

  16. 2001 - Other Initiatives • Cash Reconciliation (US) • Claims (UK,US) • Conformance (UK,US) • Foreign Exchange - spot & forward (SWIFT WG) • SMPG Glossary(SWIFT) • Registrations (CH, DE)

  17. Question ? didier.hermans@swift.com alexandre.kech@swift.com

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