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SWIFT in the Securities Business

SWIFT in the Securities Business. Bagin Alex Senior Regional manager Middle East, alex.bagin@swift.com. Agenda. SWIFT short intro SWIFT in the securities market SMPG scope Egypt and South Africa example. SWIFT’s mission.

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SWIFT in the Securities Business

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  1. SWIFT in the Securities Business Bagin Alex Senior Regional manager Middle East, alex.bagin@swift.com

  2. Agenda • SWIFT short intro • SWIFT in the securitiesmarket • SMPG scope • Egypt and South Africa example

  3. SWIFT’s mission SWIFT is a worldwide community of financial institutions whose purpose is to be the leader in communication solutions enabling interoperability between its members, their market infrastructures and their end user communities.

  4. Customer SWIFT - A customer centric user community Banks Corporates Payment Systems Clearing & SettlementSystems InsuranceCompanies GovernmentInstitutions Broker-Dealers Stock Exchanges Securities MI’s Depositories Payments MI's Trustees IMI's

  5. Traffic stats (1) August 2007 YTD

  6. Traffic stats (2) August 2007 YTD

  7. Agenda • SWIFT short intro • SWIFT in the securities market • SMPG scope • Egypt and South Africa example

  8. Example Trading and Confirmation IMI B/D Settlement Instructions Settlement Instructions Custodian Clearer Cash / FX Cash / FX Bank Settlement Instructions Settlement Instructions Cash / FX CSD

  9. ExampleEquities Transaction Lifecycle IMI B/D SWIFTNet FIX + FIN FIN FIN Custodian Clearer FIN FIN Bank FIN FIN FIN CSD

  10. Securities Strategic Priorities (set by the industry) Market Space Strategic Priorities Equity and fixed income Pre-trade / Trade Succeed in Pre trade /Trade messaging Be the messaging platform of choice for market infra-structures Drive Industry towards Standards convergence Post Trade /Pre-settlement Platform of choice for Post-trade / Pre-set. Clearing and Settlement Grow traffic in Clearing and Settlement and Custody services Custody Services Investment funds Become messaging platform of choice for the Funds industry in Middle East and Africa

  11. SWIFT Market ShareTraditional Spaces Market Space SWIFT Market Share Clearing & Settlement 55% Custody Services 16% Corporate Actions 3% Reporting 43%

  12. SWIFT means value ü Straight-through-processing (STP) ü Scalability ü International Standards ü Cost effective solutions ü Security and reliability

  13. Agenda • SWIFT short intro • SWIFT in the securitiesmarket • SMPG scope • Egypt and South Africa example

  14. SMPG scope Create globally agreed harmonised market practices which, integrated with standards, will bring the securities industry closer to achieving STP. Standards STP Market Practice

  15. SMPG tasks • Organise 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

  16. SMPG Steering Committee SWIFTStandards National Market Practice Groups and Convenors Broker/dealers, investment managers, custodians, depositories, regulators, & vendors www.smpg.info SMPG organisation

  17. SMPG meetings • At National level: • Whenever felt appropriate • Minimum twice a year • At Global level • 2 times a year • Amsterdam (28-30 March 2007)draft minutes available on smpg.info • Boston (5-6 October 2007)

  18. SMPG countries • Americas: BR, CA, MX, US. • EMEA: AT, BE, CH, DE, DK, ES, FI, FR, GR, GB, IE, IL, IT, LU, NL, NO, PL, PT, RU, SE, TR, ZA, ICSDs • Asia/Pacific: AU, HK, JP, KR, NZ, SG, TH,TW, IN

  19. Agenda • SWIFT short intro • SWIFT in the securitiesmarket • SMPG scope • Egypt and South Africa example

  20. Egypt CSD market scope 131 Brokers (20 on SWIFT) 1114 Issuers Swiftnet Domestic VPN CSD 13 Primary Dealers 26 Custodians (4 on SWIFT) 26 Direct settlement members

  21. Egypt CSD market on SWIFT today Broker and primary dealers (20 on SWIFT on branch codes ) SWIFTNet Swiftnet CSD Custodians (4 on SWIFT)

  22. Egypt CSD market on SWIFT by end of this year Broker and primary dealers 50 NEW BIC codes SWIFTNet Swiftnet MI-CUG CSD Custodians (4 on SWIFT)

  23. Egypt CSD market scope evolution 131 Brokers 1114 Issuers Swiftnet MI-CUG CSD 13 Primary Dealers 26 Custodians 26 Direct settlement members

  24. Agenda • SWIFT short intro • SWIFT in the securitiesmarket • SMPG scope • Egypt and South Africa example

  25. Settlement Process SFIDvP Sell Order 100/R20,000 Buy Order 100/R20,000 SETS/BDA Broker A on Behalf of Client A Broker B on behalf of Client B Confirmation Confirmation “Locked in Trade” CSD Participant CSD Participant SAFIRES Reservation of securities on S) Strate Ltd Status intimations Status intimations A: Security X B: Security X Confirmation >100 Confirmation 100 >100 Payment Order Payment Confirmation SAMOS SARB Bank A Bank B R20,000 R20,000

  26. On-Exchange Trade - SWIFT Message Flow Client A Broker A Broker B Client B MT515 MT515 JSE Trading System MT544/5/6/7 MT544/5/6/7 BDA System MT548-601 MT598-113 MT540/1/2/3 MT540/1/2/3 SAFIRES MT598-101 MT598-101 MT548 MT548 CSDP CSDP MT586 MT586 As per MT298-128 SAMOS As per MT298-128

  27. SWIFT Middle East regional conference 2008 17, 18 and 19 March, Conrad Hotel, Cairo, Egypt

  28. Shoucran

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