1 / 10

ACSDA 10 th General Assembly Presentation by Simon Thomas Thomas Murray 21 February 2008

ACSDA 10 th General Assembly Presentation by Simon Thomas Thomas Murray 21 February 2008. Agenda Risk Situation in the Americas Market Infrastructure in Europe Market Trends Consolidations Range of Services provided by CSDs The retail model.

jonah
Download Presentation

ACSDA 10 th General Assembly Presentation by Simon Thomas Thomas Murray 21 February 2008

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. ACSDA 10th General Assembly Presentation by Simon Thomas Thomas Murray 21 February 2008

  2. Agenda • Risk Situation in the Americas • Market Infrastructure in Europe • Market Trends • Consolidations • Range of Services provided by CSDs • The retail model

  3. Overall Capital markets Infrastructure Ratings AAA AA+ AA AA- A+ A A- BBB BB Comparative Chart Average Americas Average East Europe Avge West Europe Avge Asia Pacific Avge Mid East Africa B CCC

  4. Market Trends • Pressure on profitability of exchanges • Exchanges downstream - vertical silos (e.g Spain, Germany, Norway) • Horizontal consolidations (e.g OMX Group, Euroclear) • Historical transition from exchange/broker owned, to market owned to public ownership • Transfer from market utility to commercial enterprises • Involvement of central banks in CSD business (e.g Costa Rica, T2S) • Transitioned from internal clearing to external clearing via CCPs and CMUs • Expanding added value services (e.g issuers service, derivatives, funds processing)

  5. Consolidations in Europe Silos in Europe NASDAQ NYSE DIFX Vertical Silo Horizontal Silo Horizontal Association Independent CSD(s) • ‘American Invasion’: US exchanges buying two horizontal ‘silos ‘ • ‘Small is Vulnerable’: Anything not in a vertical silo is ‘up for grabs’ • ‘Vertically Challenged’: Are the vertical silos coming up short in their ‘dormant’ strategy?

  6. Consolidations in the Americas Vertical Silo Horizontal Silo Horizontal Association Independent CSD(s)

  7. Range of services Cash Market Services Alternatives Market Services Bermuda, Bolivia, Costa Rica, Ecuador, El Salvador, Guatemala, Jamaica, Panama, T&T, Uruguay, Venezuela Chile, Colombia, Peru, Egypt, Russia, China, Canada, UK, Japan, Singapore, Sweden, Finland, Denmark, Malaysia, South Africa France, Germany, Italy, Poland, Hong Kong, Australia, Thailand USA, Norway, Euroclear, Clearstream

  8. Retail Model CSD and Central Registrar Beneficial owner Beneficial owner Beneficial owner Beneficial owner Beneficial owner Foreign nominee Foreign nominee Beneficial owner Beneficial owner • All domestic accounts held at the first level • Each beneficial owner has their own account at the CSD • The CSD acts as central registrar – the notary that grants legal title. (Other registration functions can be carried out by third party registrars e.g. Calling AGMs, paying dividends etc. • Genuine nominee accounts only allowed for foreign participants • Also known as the Direct Holding model • Structure results in millions of accounts at the CSD • No intermediaries required. Participants act as Account Operators to maintain details across millions of accounts

  9. Retail Model • Strengths • Accounts at beneficial owner level • Investor protection - Designated Segregation • Single consolidated position • Direct access to accounts • Direct route for corporate actions • Issuers have complete shareholder details • Weaknesses • High operational risk - China • Maintenance of beneficial owner details • CSD cannot provide full customer service at this level • Reconciliations • Expensive

More Related