Gearing Vietnam's securities market for growth

SWIFT Business Forum Vietnam – 21 July 2015

Alexandre Kech, Head of Securities Market Infrastructures & Standards, APAC

Global and regional securities markets trends

SWIFT’s response

Agenda

- Horizontal and vertical

linkages among MIs

- Internationalisation/

regionalisation initiatives

- ISO 20022

- New services (CA,

liquidity management,

collateral)

- “Hubbing” of operations

- Refocus to other

markets (APAC,

LATAM)

- Standardisation

- Automation and best

practice

- Pressure to lower fees

and margins with higher

volumes

- ISO 20022

- Intraday liquidity

reporting

- High quality collateral

- Counterparty

identification

- Account segregation

- Resiliency, reliability,

availability

- T2

- Cyber security

- Automation and STP

- ISO 20022

- Efficiency and

transparency

- Reporting and control

- E.g. trade reporting,

PFMIs, EMIR, CSDR,

etc.

Securities Markets Trends

Regulatory pressure Business risk

mitigation Operational risk

mitigation

Business interoperability

Cost efficiency Innovation

Securities Market Infrastructures

Scaling up

• Aging technology

• ISO 20022 adoption

• Influenced by regional (eg, ABMF) and international push (eg, CPSS-IOSCO)

• ASEAN Economic Community (AEC) 2015

• Developmental forums e.g. ABMF, APFF, CSIF

• Adoption of ISO 20022 and market practice groups

Post-trade system refresh

• CPMI-IOSCO Principles for Financial Market Infrastructures

• Trade data / reporting requirements

• T+2

• More SMIs are including value added services for their community:

▪ Funds Hub to support domestic and/or cross-border order flows

▪ CA golden copy announcement to support date accuracy and automation needs

▪ Collateral Management to help their community to comply with regulatory driven collateral management requirement

Regulations

Business diversification &

value added services

Regionalisation

Internationalisation

India

Maldives

Sri Lanka

Nepal Bhutan

Bangladesh Burma Laos

Thailand

Cambodia

Brunei

Vietnam

Malaysia

Singapore

Indonesia East Timor

Philippines

Hong Kong

Taiwan

South Korea

North Korea

Japan

China

Renewing Technology Clearing and Settlement Projects

Australia

• SWIFT VAP:

✓ SWIFT C&S automation

track record

✓ ISO standards knowledge

✓ Past regional and global

work

✓ Reach

Talking about

Live or planned

Technology refresh

Internationalisation

Regional integration

Message standardisation

Other trends

Corporate Actions Collateral Investment Funds

Challenges

• Mis-interpretation of issuer’s

announcements

• Manual scrubbing laborious & error-

prone

• Missing out CA announcements &

deadlines

Solution

• Issuer involvement

• Standardised templates per event

• Automated dissemination

• New revenue for SMIs

• Address community demands for

higher quality of information

Golden Copy

Challenges

• Funding & liquidity demands

continuously increasing

• Streamlining operations to increase

securities availability

• Account segregation

• Clearstream/Euroclear initiatives

• Regulation

SWIFT Value Proposition

SWIFT automation track record

ISO standards knowledge and dedicated workflow (AFAC for funds)

Past regional and global work

International and regional reach

Initiatives in AP

• Going live: Australia, Singapore

• Working: HK, Malaysia, South

Korea, Japan, Brunei

Challenges

• Emergence of regional funds

passporting schemes

• Streamlining operations to address

manual point-to-point process, poor

service levels

• Regulatory pressure causing scale

issue (beneficial account)

Initiatives in AP

• Live: Korea, HK, TW, AU, CN

• Working: SG, ID, VN, TH

Cross-Border Settlement Infrastructure

Forum (CSIF)

• CSD-RTGS linkage model

• Standardisation and harmonisation of flows

and data

• ISO 20022

ASEAN + 3 Bond Market

Forum

• Phase 3 focusing on

implementation of SF1 &

concluding SF2 work

• Market guide updates

• Country visits

• NMPG build-up

Regional initiatives

SWIFT Involvement: ✓Report reviews

✓Market Guide

updates

✓NMPG build-up

DTCC, US

JASDEC, JP

[Post-trade]

ANBIMA, BR

T2S, EU

CSD, LI

CSD, EE

CSD, LT

ASX, AU

ISO 20022 Adoption – Securities MI & Treasury MI

CLS

Treasury MI Securities MI

SGX, SG

JASDEC &

TSE, JP

[Corp.Act]

Live

CN

BR, CSD

Live

NSD, RU

VP Lux

VP Sec DK

AMBD,

BN

KDPW

CCP, PL NBB-SSS,

BE

KSEI, ID

Live

Live

ABMF

CSIF

Live

Soon

Live

ECB FR

Iran CSD

SADC

Global and regional securities markets trends

SWIFT’s response

Agenda

Transformation projects: around ISO Involved in all major APAC SMI’s projects

10

Clearing & Settlement

• ISO 20022 strategy

• High level and detailed gap

analysis review

• ISO governance support

(maintenance and new)

• MyStandards

• Implementation support

• Trainings

Corporate action (TSE)

• Specification co-writing and

maintenance

• ISO governance support

• MyStandards

Clearing & Settlement

• Standards strategy

• Specifications review

• MyStandards

• Implementation support

• Community engagement

Corporate action

• Specification co-writing and

maintenance

• ISO governance support

Corporate action

• Standards strategy

• Community engagement

• Specification writing and

maintenance

• MyStandards

Post-trade

• Standards strategy

Collateral Management

• Specification co-writing and

maintenance

• MyStandards

• Standards forums

• Customised trainings

• Standards consultancy

Securities M

ark

et

Infr

astr

uctu

re

Com

munity

• Standards forums

• Customised trainings

• Standards consultancy

• Market practice discussion

facilitation

• Standards forums

• Customised trainings

• Standards consultancy

• Market practice discussion

facilitation

• Community workshops

• On boarding portal

Readiness

Portal MyStandards

Clearing & Settlement

• Standards strategy

• Impact assessment

• Specifications review

• Development of 100 new

messages

• Maintenance support for

existing messages

• MyStandards

• Implementation support

• Testing of systems

• Etc.

Clearing & Settlement

• Standards strategy

• Specifications writing and

review

• Community engagement

• Implementation support

• Cross-border connectivity

• Regional market practice

support

• Local integration

• Project management

• MyStandards

• Implementation support

• Etc

Regionalisation Initiatives Driving ISO 20022 adoption and cross-border

communication

How do we help? for ISO 20022

• Standards experts in SG, HK, JP, BE, US

• Compliance to standards and global market practices

• Integration and implementation support

• Capacity building and knowledge sharing

• Community support

Expertise

• Domestic user and practice groups

• Global SWIFT Community

• Reach-out directly to cross-border international parties Reach

• Re-use of SWIFT infrastructure

• Cost efficiency for receiving entities

• Tools to assist with operational efficiency

• Community pricing

Cost

• Proven reliable CSP used by >150 Mis globally

• Resilient, scalable, secure and operationally strong

connectivity choices and associated services

• Community management

Network

Readiness

Portal

MyStandards

13

Strategy Design Internal

preparation Testing Go Live Operate

Business Case Solution design Go Live

assistance Implementation

services

Testing

assistance

Support

Services

End-to-end project management

Training and knowledge transfer

Generic ISO 15022 - 20022 courses and Initiative specific training

Business

mapping

Gap analysis

New message

development &

registration

Market practice

management

Community

testing services

Integration services

Readiness

Portal

Business and

Technical Impact

assessment

Community

consultation and

implementation

strategy

MyStandards

IPLA

AMH / Access

SWIFT: Supporting ISO 20022 adoption from

start to finish

Health Check