Cbf2013.road to2015.final

Road to 2015 – Initiatives Update

Canadian Business Forum

Malene McMahon

Senior Business Manager

Stacy Rosenthal

Senior Business Manager

8 April 2013

2

Agenda

• Legal Entity Identifier

• Securities Landscape

• Banking/Payments

Landscape

• MyStandards

• Questions & answers

Canadian Business Forum - 8 April 2013

• Industry and regulatory requirements for legal entity identification

• Partnership between DTCC and SWIFT (2011)

– Not for profit organisation

– Owned by the financial industry

– Serving the financial industry

– Utility Infrastructure

• DTCC

– International and US headquartered

– Avox subsidiary = recognized industry leader in reference data management

• SWIFT

– International and EU headquartered

– Recognized industry leader in standardisation

• CICI Utility launched : 21 August 2012

3

Regulatory Framework

• Governance

– Regulatory Oversight Committee (ROC)

– Charter

– 50 Authorities

– Executive Committee

– Committee of Evaluation and Standards

– Oversee the global LEI system

• Central Operating Unit (COU)

– Foundation in CH

– Federation with Local Operating Units (LOU)

• Private Sector Group

4

CFTC

Reporting requirements (Part 45)

• Reporting firms must report transactions to registered swap

data repositories

• Reporting firms must identify themselves and counterparties

with CICIs

• Effective Date

– CDS and IRS = 31 December 2012

– FX, Commodity and Equity Derivatives = 28 February 2013

– Transactions between two non swap dealers or two non major

swap market participants = 10 April 2013

5

http://www.cftc.gov/ucm/groups/public/@lrfederalregister/documents/file/2011-33199a.pdf

6

EMIR

• Central role for ESMA

– With Local / National supervision

• Moving OTC Derivatives to centralised clearing (CCPs)

• Standardisation of OTC Derivatives contracts

• Increased market transparency via reporting to Trade Data

Repositories

• Timing

– EMIR Legislation published > September 2010

– Political Agreement > February 2012

– Level 2 Measures (ESMA) > September 2012

– Regulatory Technical Standard > March 2013

– Implementation > September 2013

CICI Utility Overview

• Statistics

– 50,000 records

– US firms = 50 %

– Certification = 50 %

– Funds

– Users = 8,000

– Download of dB = 15,000

• Next steps

– Bulk files

– Payment method

7

Reporting Requirements

What does it mean for me ?

• Registration

– Self-Registration

– Which entities, all subsidiaries, all funds ?

– Certification if pre-populated records

– Who is responsible for registration and maintenance

• Data Management

– Download the database

– Cross-reference data to internal identifiers

– Understand requirements

– Prepare systems for reporting transactions

9

Take Away

10

www.swift.com/lei

www.ciciutility.org

11

Securities Landscape

Order

Management

Allocate

Confirm

Matching

Clearing &Settlement Collateral

Management

Asset

Servicing

Reference

Data

Equities

Funds

Fixed

Income

FX

Derivatives

LE

I /

CIC

I U

tilit

y

Corp

ora

te A

ctio

ns

-

An

no

un

cem

en

ts

Beyond

2014

2013-2014

Early

Adoption

2012

Execution

Corp

ora

te A

ctio

ns

-

Ele

ction

s &

Move

me

nts

Initiatives across the securities trade lifecycle

12

Bila

tera

l C

olla

tera

l M

an

age

men

t

an

d T

ri-P

art

y R

ep

os

SW

IFT

Ref

Post Trade Services

GTR

Funds

Po

st T

rad

e A

lloca

tio

ns

Po

st T

rad

e M

atc

hin

g

Extend

Reach


The corporate actions information flow

Low

High

None

Depository/

Exchange

Agent/

Registrar

Global

Custodian/

Broker Dealer Sub-custodian

Asset/Investment

Manager

Data Vendor

Corporate Issuer

Little

Use of global

standards /

messaging

13 Canadian Business Forum - 8 April 2013

ISO 20022 Corporate Actions Messages

14

MX Identifier ISO 20022 Message Names Abbreviated

Name

Equivalent

ISO 15022 Messages

1 seev.031.002.03 Corporate Action Notification CANO MT564

2 seev.033.002.03 Corporate Action Instruction CAIN MT565

3 seev.036.002.03 Corporate Action Movement Confirmation CACO MT566

4 seev.037.002.03 Corporate Action Movement Reversal Advice CARE MT566

5 seev.039.002.03 Corporate Action Cancellation Advice CACN MT564

6 seev.040.002.03 Corporate Action Instruction Cancellation Request CAIC MT565

7 seev.032.002.03 Corporate Action Event Processing Status Advice CAPS MT567

8 seev.034.002.03 Corporate Action Instruction Status Advice CAIS MT567

9 seev.041.002.03 Corporate Action Instruction Cancellation Request Status Advice CACS MT567

10 seev.035.002.03 Corporate Action Movement Preliminary Advice CAPA MT564

11 seev.038.002.03 Corporate Action Narrative CANA MT568

12 seev.042.002.02 Corporate Action Instruction Statement Report CAST New

13 seev.044.002.02 Corporate Action Movement Preliminary Advice Cancellation Advice CAPC MT564


DTCC messaging implementation Timeline and status

2011 2012 2013

15

Full volume for

announcements (SR2010)

Sample messages

Controlled-volume

(10-20 msgs/day)

Distributions lifecycle

messages (SR2012)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

A n n o u n c e m e n t s

P i l o t

Full volume for

announcements (SR2011)

Redemption and reorg

lifecycle

messages (SR2013)

Full lifecycle

for distributions

DTCC Live

for Announcements

2014

DTCC messaging implementation Timeline and status

16

Entitlements and

movements live (SR2012)

Sample messages for

entitlements and

movements (SR2012)

Sample messages for

distributions elections

(SR2012)

Redemption and reorg

lifecycle messages

(SR2014) - Tentative

Distribution elections live

(SR2013)

D i s t r i b u t i o n s L i f e c y c l e

2013 2012 Jan Mar Jun Sep Oct Nov Dec Jan Mar Jun Nov Dec

Redemptions

and Reorgs


17

Banking/Payments Landscape


Banking/Payments Initiatives

Regulation/

Compliance

Sanctions Screening

Sanctions Testing

Standards

ISO 20022 – Payments (e.g. SEPA), eBAM,

Reporting

Common Global Implementation

Integration – IPLA

Solutions

3SKey

Business Intelligence (SWIFT

Watch, Index)

SWIFTRef

18

SWIFT Index

Insights for better economic growth forecasting

19

• The following graph shows a year-on-year GDP estimate by SWIFT based

on the SWIFT Index, which captures global payments traffic.

• It clearly indicates a recovery for the four aggregates (OECD, UK, EU27,

DE) and a nearly flat evolution for the US.

www.swift.com/swiftindex


http://www.swift.com/swiftindex

RMB Tracker

What is it?

Monthly reporting and

statistics on renminbi

(RMB) progress

towards becoming an

international currency.

Canadian Business Forum - 8 April 2013 20

RMB Tracker

January

• Chinese RMB payments fail to take off in the United States

• In December, 95.5% of the payments value between the United States and China/Hong Kong was still performed in USD, with only 0.3% in RMB

• RMB remains world currency #14


Balancing Sanctions Concerns

22

Effectiveness

• Getting Assurances that

Systems Work

• Gage the performance of your

Fuzzy Matching

• Assess coverage of

sanctions lists

• Align System to your

Risk Appetite

Efficiency

• Reduce False Positives through

iterative tests

• Build optimisation tests into

your processes

• Develop a test & tuning

framework aligned to your

needs

• Do it yourself

Testing:

a response to Increased

Regulatory Pressure

Tuning: a response to

Cost Concerns

with


Electronic Bank Account Management (EBAM)

In Production – FileAct in SCORE

Account Opening

Account Maintenance

Mandate Maintenance

Account Closing

Account Reporting

Existing Customers (no KYC) 15 XML ISO 20022 messages

Digital Signatures

Naming conventions – FileAct

& Attachments


V2 of standards – May

anticipated ISO certification

3SKey Not just another token


1. ONE TOKEN - One device to reach

multiple banks and on any channel

2. SECURE - Strong user authentication

and use of personal tokens & signatures

3. COST EFFECTIVE - reduce TCO by

outsourcing proprietary infrastructures

Transaction from attributed signer

Content has not been changed

Proof of signature after the approval process

3SKey usage scenarios

Multi-banked Corporates

A single 3SKey personal token

to reach multiple banks over

SWIFTNet, proprietary or

domestic channels

Use of 3SKey to

strengthen security in

internal approval

workflows

Internal Use

Strong 2-factor 3SKey

authentication in on-line

services

User Authentication Replace or enhance

proprietary solution with

the 3SKey PKI service

Proprietary Security

3SKey as a standard and

shared market solution

amongst banks

Communities

Use of 3SKey

for individual approvals and/or

signatures on SWIFTNet or

proprietary channels

Market Infrastructures


Consulting services

helping you to leverage the

full potential of WATCH

products

Consulting services

providing more information

– e.g. peer benchmarking

SWIFT Business Intelligence offering

27

WATCH Insights

WATCH Analysers

Business Intelligence

Services

Reports focusing on four

specific business domains:

Trade Finance, Payments,

Network management,

Operations

Subset of data

Interactive database with

possibility to build

customized reports

Complete set of data with

value and currency or only

number of transactions


28

MyStandards


29

… keep track of changes and

assess impact of releases ?

… understand and find

all standards-related

information ?

… efficiently implement

standards ?

… describe, document &

maintain usage guidelines ?

How to….

Time consuming

Prone to errors Resource-intensive

Costly

Automation of

business processes

Standards

Managing standards – challenges….


MyStandards

… a collaborative

web platform

to better manage

standards definitions

and usage

in the financial industry

Content

Features

Managing standards with MyStandards


Base Standards: MT/MX/ISO 20022

Global market practices

Local market practices

Bilateral guidelines

Internal specifications

SWIFT

ISO

20022

Market

practice

groups

Financial

institutions

Market

infrastructures

Contributors

Content

Centralize all of your standards-related

information on-line


Implement

Publish Analyse

Capture guidelines

Collaborate

Browse

32

MT / MX / ISO 20022

Usage guidelines


Target audience

Financial

institutions

Market

infrastructures

Market

practice

groups

usiness analysts tandards implementers

B S

P roduct managers O perations staff

33 33 Canadian Business Forum - 8 April 2013

Value for financial institutions

34

Centralize all of

your standards-

related information Simplify creation

and publication of

customer and

internal guidelines

Automate analysis

and release

management

Accelerate

implementation

Control

and improve

your standards

usage and

management

Reach consensus quicker


Value for market infrastructures

35

Generate

customized

documentation

Share & control

access with your

members

Formally capture

and maintain your

guidelines

Automate analysis

and release

management

Simplify

standards

management

for your

community

ENTER


Value for market practice groups

36

final version

Reduce risk of errors

Explore

opportunities for

harmonization Share and publish

market practices

on-line

Formally capture

and maintain your

market practices

Share and

centralize feedback

on-line

Streamline

your

market practice

management

Reach consensus quicker

From draft to


Available licenses

37

Content and basic features

Analytical

framework

PDF generation Collaboration

MT/MX/

ISO 20022

Public &

shared usage

guidelines

Advanced features

Capture &

maintain

guidelines

Browsing

Excel &

schema

generation

Premium

service

Basic

service


Explore MyStandards now

38

www.swift.com/mystandards [email protected]

1 Log in

with your

swift.com

credentials

or register

as a new

user

2 Browse

the

base

standards and

public market

practice

information

3 Contact us

if you like

to evaluate

the platform

for your

organisation


Improve

release

management

Centralise all

your standards

information

Streamline

usage guidelines

management

Enable

efficient

collaboration

Automate

user-friendly

documentation

Speed up

accurate

implementation 39

Standards

made simple MyStandards


Q&A

?


Thank you


Cbf2013.road to2015.final

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