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SWIFT in the Securities
Business
Bagin Alex
Senior Regional manager Middle East,
[email protected]
Slide 1
Agenda
 SWIFT
short intro
 SWIFT
in the securities market
 SMPG
scope
 Egypt
and South Africa example
Slide 2
SWIFT’s mission
SWIFT is a worldwide community of financial
institutions whose purpose is to be the leader in
communication solutions enabling interoperability
between its members, their market infrastructures
and their end user communities.
Slide 3
SWIFT A customer centric user community
Banks
Payment Systems
Corporates
Clearing & Settlement
Systems
Insurance
Companies
Government
Institutions
Broker-Dealers
Customer
Securities MI’s
Stock Exchanges
Depositories
Payments MI's
IMI's
Trustees
Slide 4
Traffic stats (1) August 2007 YTD
Slide 5
Traffic stats (2) August 2007 YTD
Slide 6
Agenda
 SWIFT
short intro
 SWIFT
in the securities market
 SMPG
scope
 Egypt
and South Africa example
Slide 10
Example
IMI
Trading and
Confirmation
B/D
Settlement
Instructions
Settlement
Instructions
Custodian
Clearer
Cash / FX
Cash / FX
Bank
Settlement
Instructions
Cash / FX
Settlement
Instructions
CSD
Slide 11
Example
Equities Transaction Lifecycle
IMI
SWIFTNet FIX + FIN
B/D
FIN
FIN
Custodian
Clearer
FIN
FIN
Bank
FIN
FIN
FIN
CSD
Slide 12
Securities Strategic Priorities
(set by the industry)
Market Space
Strategic Priorities
Equity and fixed income
Pre-trade / Trade
Succeed in Pre trade
/Trade messaging
Post Trade /
Pre-settlement
Platform of choice for
Post-trade / Pre-set.
Clearing and
Settlement
Custody Services
Investment funds
Grow traffic in Clearing
and Settlement and
Custody services
Be the
messaging
platform of
choice for
market infrastructures
Drive Industry
towards
Standards
convergence
Become messaging platform of choice for the
Funds industry in Middle East and Africa
Slide 22
SWIFT Market Share
Traditional Spaces
Market Space
SWIFT Market Share
Clearing & Settlement
55%
Custody Services
16%
Corporate Actions
3%
Reporting
43%
Slide 23
SWIFT means value




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Straight-through-processing (STP)
Scalability
International Standards
Cost effective solutions
Security and reliability
Slide 24
Agenda
 SWIFT
short intro
 SWIFT
in the securities market
 SMPG
scope
 Egypt
and South Africa example
Slide 26
SMPG scope
Create globally agreed harmonised market
practices which, integrated with standards,
will bring the securities industry closer to
achieving STP.
Standards
STP
Market Practice
SMPG tasks
•
•
•
•
•
•
Organise national market practice groups
Collate national market practice rules
Define cross-border market practice rules
Harmonise market practice differences
Publish market practice rules
Identify conformance mechanisms
SMPG organisation
SMPG Steering
Committee
SWIFTStandards
National Market
Practice Groups and
Convenors
Broker/dealers, investment managers,
custodians, depositories, regulators, &
vendors
www.smpg.info
SMPG meetings
• At National level:
– Whenever felt appropriate
– Minimum twice a year
• At Global level
– 2 times a year
– Amsterdam (28-30 March 2007)
draft minutes available on smpg.info
– Boston (5-6 October 2007)
SMPG countries
• Americas: BR, CA, MX, US.
• EMEA: AT, BE, CH, DE, DK, ES, FI, FR,
GR, GB, IE, IL, IT, LU, NL, NO, PL, PT,
RU, SE, TR, ZA, ICSDs
• Asia/Pacific: AU, HK, JP, KR, NZ, SG,
TH, TW, IN
Agenda
 SWIFT
short intro
 SWIFT
in the securities market
 SMPG
scope
 Egypt
and South Africa example
Slide 32
Egypt CSD market scope
131 Brokers (20 on SWIFT)
1114 Issuers
Swiftnet
Domestic VPN
13 Primary Dealers
CSD
26 Custodians (4 on SWIFT)
26 Direct settlement members
Slide 33
Egypt CSD market on SWIFT today
Broker and primary dealers
(20 on SWIFT on branch
codes )
SWIFTNet
Swiftnet
CSD
Custodians (4 on SWIFT)
Slide 34
Egypt CSD market on SWIFT by end of this year
Broker and primary dealers
50 NEW BIC codes
SWIFTNet
Swiftnet
MI-CUG
CSD
Custodians (4 on SWIFT)
Slide 35
Egypt CSD market scope evolution
131 Brokers
1114 Issuers
Swiftnet MI-CUG
CSD
13 Primary Dealers
26 Custodians
26 Direct settlement members
Slide 36
Agenda
 SWIFT
short intro
 SWIFT
in the securities market
 SMPG
scope
 Egypt
and South Africa example
Slide 37
Settlement Process SFIDvP
Sell Order 100/R20,000
Buy Order 100/R20,000
SETS/BDA
Broker A on Behalf of Client A
Confirmation
Broker B on behalf of Client B
Confirmation
“Locked in Trade”
CSD Participant
CSD Participant
Strate Ltd
Status intimations
SAFIRES Reservation of securities on S)
A: Security X
Confirmation
100
B: Security X
Payment Order
SARB
>100
>100
Status intimations
Confirmation
Payment Confirmation
SAMOS
Bank A
Bank B
R20,000 R20,000
Slide 38
On-Exchange Trade - SWIFT Message Flow
Broker A
Broker B
MT515
Client B
MT544/5/6/7
MT515
MT544/5/6/7
Client A
JSE Trading System
CSDP
MT548-601
MT598-101
MT598-113
SAFIRES
MT548
MT598-101
MT548
MT586
MT586
MT540/1/2/3
MT540/1/2/3
BDA System
CSDP
As per MT298-128
As per MT298-128
SAMOS
Slide 39
SWIFT Middle East regional conference 2008
17, 18 and 19 March,
Conrad Hotel,
Cairo, Egypt
Slide 42
Shoucran
Slide 43