CSDs over SWIFT

Status report and

way forward

Market infrastructures - October 2014

Sibos is an annual conference, exhibition and networking

event organised by SWIFT for the global financial

industry.

In just one week, some 7,000 decision makers and topic

experts from financial institutions, market infrastructures,

multinational corporations, and technology partners

gather in one place to do business and collectively shape

the future of payments, securities, cash management and

trade.

Attendance

2014 Boston

7,338 Delegates

180 Exhibitors

2012 Osaka

6,241 Delegates

178 Exhibitors

Attendance Sibos 2014 Boston

Americas

2,766

38%

APAC

1,060

14%

EMEA

3,512

48%

Total:

144

countries

By gender:

5,149 1,919

Male Female

Trade Services

16,34%

Securities

13,30%

Payments

34,21%

Not selected

12,05%

Derivatives

2,37%

FX/MM

3,41%

Cash Management

18,33%

Sales

15,74%

Product Management

7,25%

Not selected

12,05%

Marketing

7,96%

Business Development /

Strategy

2,37%

Customer Services

3,05%

Compliance / Risk Management

2,73%

Primary

Area of Responsibility

Primary

Business Focus

Standards

0,75%

Operations

9,06%

Innovation

2,02%

Information Technology

8,48%

Attendance Sibos 2014 Boston

Sibos 2014 – Market Infrastructure Forum Where the world market infrastructures met their peers

25

953 2

Speakers

Registrations

Days

Christine Cumming

Federal Reserve

Bank US

“Cyber security is a clear example of the need for collaboration across MIs”

Dr Alberto

Giovannini

“ “We need to be open to different models – alliances vs competition”

Phil Kenworthy

Bank of England

“The conversation on recovery and resolution is really only just started”

Tom Zschach

CLS

“Current innovation is around real time payments and collateral products”

CSD update to AMEDA – 201410 – nal

CSDs are at the core of SWIFT presence in securities markets

7

Status and way forward

Status

CSDs

• Market infrastructures (CSDs, ICSDs and SSSs)

• Communities (domestic and international)

Status

• Connections

• Usage

Strategy

• Market trends

• Grow messaging

• Expand portfolio towards CSDs and communities

CSD update to AMEDA – 201410 – nal

CSDs are critical for SWIFT activity

8

Usage growing up faster than in payment markets

Products

& Services

Messaging

30 % of FIN Cat 5 >50 % of IA

Reach

90 % of OECD

markets

Connected to 79 CSDs

• Strong in top and mature markets

• Maximum reach in Europe

• Still opportunities in Latam, APAC, Africa and Middle East

• Market share : 6 to 8 %

domestic and 15 %

globally

• Domestic settlement flows

concentrated in EMEA

• 2014 ramp up in US and

JP

• CSDs use SWIFT

services a lot less than

PMIs

• Concentrated in top

end/mature

• ISO 20022 opportunity

CSD update to AMEDA – 201410 – nal

SWIFT Footprint : a very good reach

9

90 % of OECD countries’ CSDs are connected

Not

Connected < 5 % 5 to 25 % 25%

SWIFT messaging market share in volume

CSD update to AMEDA – 201410 – nal

In your region :

- South Africa Strate

- Zimbabwe

-

CSDs’ market drivers

10

Under pressure to perform

Evolving

market

model

BAU

Pressures

Risk

Management

Drive

market

changes

CSD

Drivers

• Regional projects : T2S, ASEAN,

MILA

• Evolving links : CCPs, TRs, new

hubs with other MIS

• New functions : collateral, funds,

investor/issuer CSDs

• Increased and new competition

• CSDs become a

change engine

• Need to make

their community

evolve

• Move to ISO

20022

• Unquestionable resilience and

operational excellence

• Regulation : CPMI-IOSCO & regionals

• Strong measures for risk management

• Compliance

• Little bandwith

(< 100 staff)

• Continued

pressure to cut

costs (internal

and for

community)

CSD update to AMEDA – 201410 – nal

How do market infrastructures use SWIFT ?

11

Inventory

Valu

es :

part

of

gen

era

l p

ort

folio

used

in

sp

ecif

ic c

ases o

nly

under

explo

ration –

mig

ht

be u

sed b

y S

WIF

T a

lready

Core Community

Management

Operational

Risk Resilience

Messaging

IA, FA,

WebAccess

Readiness

Portal

Messaging

FIN

MyStandards

Support

services

Traffic recovery

services

Security

Management

Dashboard

Specific

messaging built

Y-copy & MI channel

Interface

& integration

Community

readiness and

testing

MIRS

Health checks

Infrastructure

Security

Assessment

Operational

Excellence

Assessment

Central

application &

operating

Set up as

community

Specific MI

connector

Tri-party

incident

resolution

Capacity

assessment

Community

on-boarding

Disaster

Recovery

Cold starts

24/7

operations

Standards

definition

Business

intelligence

& ref data

BI reporting to

MI &

FIN-inform

Connectivity

contingency

services

Business

continuity

Site take- over

Lifeline

Recovery drill &

stress test

support

Community

Monitoring

Dashboard

ISO 20022

CSD update to AMEDA – 201410 – nal 12

• A major trend in securities markets with the CSDs taking a leading

role

• SWIFT will not force any migration but rather support each

community and Mi in their project

o Messaging tools ( IA S&F)

o Standards tools : MyStandards, Readiness Portal

o Technical components ( IPLA… )

• At SIBOS, SWIFT was asked by the commmunity to take a more

leading role in the deployment of ISO 20022 to ensure coherence

between the different initiatives

o MyStandards is a key collaborative platform to ensure ISO

20022 implementations are aligned between different markets

CSDs are taking a leading role

Thank you