1 / 14

The AMEDA Messaging Hub

The AMEDA Messaging Hub. PRESENTED BY: Steve Everett DATE: 28 April, 2010 PLACE: 11 th AMEDA Conference- Beirut, Lebanon. What is the need for CSD to CSD Links?. Studies have revealed an increase Globally in CSD to CSD links. Reduction of Cross-Border Settlement costs.

jennifercole
Download Presentation

The AMEDA Messaging Hub

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The AMEDA Messaging Hub PRESENTED BY: Steve Everett DATE: 28 April, 2010 PLACE: 11th AMEDA Conference- Beirut, Lebanon

  2. What is the need for CSD to CSD Links? Studies have revealed an increase Globally in CSD to CSD links • Reduction of Cross-Border Settlement costs • Reduction of Systemic Risks in Cross-Border settlement • The increased need for Regulation • Access to top investment destinations as required by investors • Local Market Benefits • The actual CSD Benefits by moving up the Value Chain 2

  3. Cross-bordertradeinitiatives in the AMEDA region Initiatives on trading often lead to initiatives in the post-trade environment 3

  4. Thecurrentcross-border post-tradesettlementenvironment in the AMEDA region Often in the region links are not CSD to CSD links, however are links between Custodian Banks CSD to CSD links Custodial Links Multiple Custodian links outnumber CSD to CSD links in Africa 4

  5. A possiblefutureforcross-border post-tradesettlement in the AMEDA region By using a ‘virtual Hub’ for all intra-AMEDA messaging and for those from the AMEDA region to the rest of the world CSD to CSD links HUB 5

  6. The Rules of The Game A number of considerations need to be accounted for in the feasibility and Business case for the Hub • Legal/Regulatory/Political barriers for each country • Settlement volumes/demand and regional initiatives to increase trading and settlement • Cash Settlement processes for each country and co-operation amongst Central Banks • Currency and Tax Regimes • Sophistication of CSDs and the means of communication (SWIFT, WAN, etc.) • Processing of Corporate Actions and the scope , implication and operation of Custodial Services to service member CSDs 6

  7. The AMEDA Messaging Hub The Business Model Using the proven Link-Up Markets technology, the Messaging Hub will be a ‘Link-Up’ Markets for the AMEDA Region • Driving message harmonization through message conversion • Leveraging existing technology and infrastructure by licensing Link-Up Markets technology to a virtual ‘Hub’ through the existing Link-Up Shareholders, Strate and MCDR • Routing of messages to Link-Up Shareholders, either Strate or MCDR dependent on the geographical proximity of a message sender by ‘sponsoring another CSD’ 7

  8. The Business Model The Business Model (Cont.) The Hub will be closely aligned to the business model for Link-Up Markets in Europe • The solution should provide for both DVP and FoP settlement options • Local Cash Settlement Agent banks in each country will remain • Pre-Funding of cash for settlement of equities and bonds to reduce credit risks • The local CSD Participant for inbound settlement will only facilitate the cash-leg of transactions being processed through the AMEDA Messaging Hub • The Hub would enable to message conversion functionality required in order to harmonize messages . 8

  9. The Benefits The Benefits CSDs in the AMEDA region can cost-effectively move up the Value Chain • Enabling settlement of foreign transactions at domestic CSD rates and reducing the number of indirect costs (through multiple intermediaries) associated with cross border settlement • An alternative channel to enable foreign investment into and out of Africa • The opportunity to offer additional, white-labelled, services to (the African investor Market) and move up the value chain • Low costs for current CSDPs to use the service, as domestic infrastructure is used to effect a cross-border settlement • Harmonization of legal/regulatory issues between AMEDA member country CSDs • Revenue stream diversification for African CSDs through the new service of cross-border settlement • CSDs may make use of Link-Up technology without being a Shareholder and meeting the stringent requirements of being a Link-up Member 9

  10. Status • A whitepaper has been submitted to the AMEDA board for the approval of the initiation of sub-committee to work on a business case and the subsequent project on behalf of AMEDA. 10

  11. Recommendations - The AMEDA Board • Approve the Adoption of the European Linkup Markets Approach within the AMEDA to gain leverage on the financial, infrastructure or legislative aspects.

  12. Recommendations - The AMEDA Board • Technical, • Technological infrastructure needs • Collect the necessary data from all interested members to better understand their individual needs • To develop a meaningful business case for this initiative. Approve the standardisation Task Force to find study and solutions to enable AMEDA members benefits:

  13. Recommendations - The AMEDA Board • Providing the model for AMEDA member collaboration in terms of how AMEDA can effectively plan and execute the initiative at hand. • Sanction initiative and give the green light for a feasibility study to build the business case

  14. Questions? • Thank you 14

More Related