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Mapping local market practice to ISO The role of SMPG

Mapping local market practice to ISO The role of SMPG. AMEDA Leadership Forum – 29 th April 2009. John Falk. Three major trends affecting Securities Market Infrastructures (SMI). Focus on core business to develop added-value services for their user-community

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Mapping local market practice to ISO The role of SMPG

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  1. Mapping local market practice to ISOThe role of SMPG AMEDA Leadership Forum – 29th April 2009 John Falk

  2. Three major trends affectingSecurities Market Infrastructures (SMI) • Focus on core business to develop added-value services for their user-community • Internationalisation of their landscape • participants and new competitors • Drive towards full Straight Through Processing to decrease risk and processing costs Growing importance of international market practices and standards (ISO 15022, ISO 20022) in a domestic market AMEDA Leadership Forum 29th April 2009

  3. SMI participants have to deal with different Standards, Messaging & Connectivity SMI Participant Securities Market Infrastructures Increases Costs Increases Risk AMEDA Leadership Forum 29th April 2009

  4. Single Window from SWIFT, sameStandards, Messaging and Connectivity SMI Participant Securities Market Infrastructures AMEDA Leadership Forum 29th April 2009

  5. Why Standardize? Increased cost Missed opportunity

  6. SMPG AMEDA Leadership Forum 29th April 2009

  7. Standards at Work: SMPG Securities Market Practice Group Create globally agreed harmonized market practices which, integrated with standards, will bring the securities industry closer to achieving STP. Standards STP Market Practice AMEDA Leadership Forum 29th April 2009

  8. SMPG Activities • Organize national market practice groups • Collate national market practice rules • Define cross-border market practice rules • Harmonize market practice differences • Publish market practice rules • Identify conformance mechanisms AMEDA Leadership Forum 29th April 2009

  9. SMPG Countries • Representatives from National Market Practice Groups (NMPGs), now established in 39 markets, represent their countries at the Global SMPG level • Americas: AR*, BR, CA, CL*, CO*, EC*, MX, PE*, UR*, US, VE* • EMEA: AT, BE, CH, DE, DK, EG, ES, FI, FR, GR, GB, IS, IE, IL, IT, LU, NL, NO, PL, PT, RU, SE, TR, UA, ZA, Euroclear, Clearstream • Asia/Pacific: AU, CN, HK, IN, JP, KR, NZ, SG, TH,TW * Countries where SMPG is working on the creation of a NMPG AMEDA Leadership Forum 29th April 2009

  10. SMPG Organization Steering Committee National Market Practice Groups and Convenors Broker/dealers, investment managers, custodians, depositories, regulators, and vendors The goal:To standardize market practices and message formats AMEDA Leadership Forum 29th April 2009

  11. Buyer Seller Corporate actions Pre- settlement Proxy voting Pre- settlement Corporate actions Reconciliation Reconciliation Settlement Settlement Reconciliation Reconciliation CSD Securities Market: Equities and Fixed Income Pre-trade / Trade Post-trade Custodian Clearing agent AMEDA Leadership Forum 29th April 2009

  12. National Market Practice Groups (NMPG) National Market Practice Groups (NMPG) National Market Practice Groups (NMPG) SMPG process www.smpg.info Publication Review, discussion & refinement Collate common elements, specify additional country requirements, identify further opportunities for harmonization Analyze & document local practices Securities Market Practice Group (SMPG) Administration AMEDA Leadership Forum 29th April 2009

  13. Prerequisites for sharing • Shared vision • Common understanding • Perceived benefit • Champion/s AMEDA Leadership Forum 29th April 2009

  14. Mapping examples / Access Comments AMEDA Leadership Forum 29th April 2009

  15. Today Broker-dealers62 Brokers MCDR/NIT

  16. Broker-dealers Corporate Insurance companies Government institutions Banks MCDR/NIT Investmentmanagers Settlementsystems Stock Exchanges Clearing systems Paymentsystems Depositories Trustees Tomorrow - STP

  17. Securities Settlement flows (Phase1) Seller’s Investment Manager Buyer’s Investment Manager Seller’s Broker Buyer’s Broker MT 547 MT 543 MT 541 MT 545 MT 547 MT 543 MT 541 MT 545 MT 543 MT 545 MT 541 MT 547 Buyer’s Custodian Buyer’s Broker’s Clearing Agent Seller’s Broker’s Clearing Agent Seller’s Custodian MT 547 MT 541 MT 543 MT 545 MT 543 MT 541 MT 541 MT 547 MT 543 MT 545 MT 547 CentralBank MT 202 (RTGS) MT 545 AMEDA Leadership Forum 29th April 2009 MT012(RTGS) MCDR

  18. Zoom: barrières #1 & #3 B1 B3 Les barrières 1 et 3 ont aussi été positionnées en haut du classement en termes des coûts qu’elles génèrent pour l’industrie. Source : First Giovannini Report on EU Clearing & Settlement Arrangements AMEDA Leadership Forum 29th April 2009

  19. AMEDA Leadership Forum 29th April 2009

  20. Mapping local market practice to ISOThe role of SMPG AMEDA Leadership Forum – 29th April 2009 John Falk

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