Transcript Presentation title

Steven Palstermans
5th Annual AECSD Meeting - Almaty
1 – 4 October 2008
Agenda
• AECSD objectives
• Corporate actions
• Initiatives in other CSD associations
• Proxy voting
• How can SWIFT support you
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AECSD Objectives
•
Harmonization of the regulatory framework
•
Establishment of depository links among the members to
support cross-border securities transactions
•
Standardization of the technologies for the depository operation,
procedures for depository transaction processing, and rules and
regulations governing the depositories' activities
•
Adoption of international messaging standards for depository
transactions and their use in the national practice
•
Development of Electronic Document Interchange
•
Supporting a coordinated process to enable the Association
members to integrate into the global depository system
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Common Standards?
Central Depository of Armenia
The National Depository Center (Azerbaijan)
Republican Central Securities Depository (Republic of Belarus)
Georgian Central Securities Depository
National Securities Depository of Moldova
Central Securities Depository (Kazakhstan)
Central Depository (Kyrgyzstan)
State CSD of the Republic of Uzbekistan
Interregional Stock Union (Ukraine)
The National Depository of Ukraine
Depository Clearing Company (Russian Federation)
The National Depository Center (Russian Federation)
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Agenda
• AECSD objectives
• Corporate actions
• Initiatives in other CSD associations
• Proxy voting
• How can SWIFT support you
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Beyond the standard: improving
Corporate Actions data quality
5th Annual AECSD Meeting - Almaty
1 – 4 October 2008
Complex and difficult
A real prospectus:
Exchange offer
• 531 pages
• 7 classes of stock
• 3 month timetable
• Extraordinary meeting
Your challenge: find the right 40 pages with the
the right data for a notification message –
or - verify which of your three sources is correct!
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Market Need – Manual data entry problem
Issuer
Issuer
Issuer
On-Line
(very few markets)
Registrar
CSD
Custodian
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Investor
ISO 15022
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Do corporate actions affect you?
“…notes in red where non-usage
of industry standard messaging occurs.”
ISSUER
ISITC Corporate Actions Diamond
- the lifecycle of corporate actions
Co / Lead-Manager/
Exchange Agent/
Conversion Agent
REGISTRAR / AGENT
Appointed by issuer
to maintain register
CUSTODIAN’S
NOMINEE
Name on register
CSD
Where shares are
Ultimately held
BROKER / DEALER
Execution of trades
where necessary
CUSTODIAN
Appointed by investor
FUND MANAGER
Appointed by investor
INVESTOR
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Market need – Corporate Actions
Challenges
 Significant shortfall in
message quality and market
practice compliance


Limitations of software
vendor solutions
Difficult business case –
management buy-in for
improvement projects
Drivers
 Losses / risk mitigation

Operational efficiency

Reducing costs

Regulatory compliance

Customer Service

Maximise portfolio
performance

Achieve scalability
The Drive for STP

Standards
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
Market practice and tools

Best practices
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Agenda
• AECSD objectives
• Corporate actions
• Initiatives in other CSD associations
• Proxy voting
• How can SWIFT support you
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Corporate Actions and
Standards
•
•
•
•
•
•
Provide input to the next generation of
ISO messages - ISO20022
Create a 'Corporate Actions Best
Practice Guide' for ACSDA members
Create National Market Practice Groups
in markets where this kind of a group
does not exist
Continue participation at SMPG
Share ACSDA Corporate Actions
survey results, now covering 17
countries, with interested members of
ACG
Expand Agenda to Include Issuer
Services, extending ECSDA work
Elimination of the Giovannini barriers
Barrier 1 : Diversity of IT platforms / interfaces (SWIFT)
 Final Protocol recommendation
 Gap analysis
 Full implementation of the Protocol (March 2011)
Barrier 3 : Corporate actions (in cooperation with other European
industry associations : Corp. Action Joint Working group)




Distributions
Reorganisations
Transaction management
General meetings
Barrier 4 and 7 : intraday settlement finality / op. hours and settlement
deadlines
 Ten standards for issuer CSDs
 Under way : cross-border issue (investor CSDs / banks)
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►Monitoring : European Commission (CESAME Group)
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Existing standards working
groups for CSDs
Giovannini
working groups
Global CSD working group
•Consolidate CSD views
on standards
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National Market Practice Groups
www.smpg.info
NMPG countries
NMPG countries specified on EIG
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…regarding Corporate Actions
“There are two kinds of securities messaging: high maintenance and low
maintenance....”
“Which one am I?”
“You're the worst kind. You're high maintenance, but you think you're low
maintenance.”
With apologies to the writers of “When Harry Met Sally”
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Folks! We’ve got a situation here!
• Risk of significant claims
• Manual processing dependency
• Difficult business case for improvement
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STaQS for Corporate Actions
• Simulation Testing and Qualification
Service (STaQS)
• Test MT 564 Notification and MT 566
Confirmation messages for compliance to
market practice
… a health check for Corporate Actions
messages
• What can you do with this service?
– Measure conformance
– Identify improvement areas
– Benchmark progress
– Improve counterparty automation
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Agenda
• AECSD objectives
• Corporate actions
• Initiatives in other CSD associations
• Proxy voting
• How can SWIFT support you
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Shareholders’ Meetings and Proxy Voting
• The problems:
– corporate actions standards are inadequate
– process transparency
– confirmation of vote lodged
– communication of results
– seasonal concentration of meetings
– compressed deadlines
• The result . . . Shareholders are being
disenfranchised by the process!
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What can we do about these
Proxy Voting problems?
• Automation and standardisation
– A new solution and standard
– Tailor-made for Proxy Voting
– Industry agreement
– Supports EU Shareholders’ Rights Directive
– Auditable process
– Confirmation of votes lodged
– Results reporting
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The asset servicing solutions
• Automation and
harmonisation
• Market practice
conformance
• Streamlining your data
providers
• Improve proxy voting
services
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• Corporate Actions
solution
• STaQS for Corporate
Actions
• Data Distribution solution
• Proxy Voting solution
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Agenda
• AECSD objectives
• Corporate actions
• Initiatives in other CSD associations
• Proxy voting
• How can SWIFT support you
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Strategic goals for Eastern Europe
• Get buy-in from regulators, professional associations.
• Use ISO standards for domestic and international operations.
• Offer the use of the SWIFT network to MIs for the domestic
business.
• Gain the critical mass of Broker/Dealers and Investment
Management Institutions (Top 15).
• Set up and open the Moscow office.
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Argentina
Australia
Austria
Belgium
Brazil
Securities Market Infrastructures on SWIFT
>80 institutions from 50 countries
Caja de Valores
Australian Securities Exchange
Austraclear
OeKB
Euroclear Belgium
Euroclear Bank
MTS
National Bank of Belgium
CBLC
Hungary
Indonesia
Ireland
Israel
Italy
Japan
Kazakhstan
Canada
CDS
Korea
Croatia
Sredisnja Depositarrna Agencija
Latvia
Czech
Republic
Denmark
Estonia
Egypt
UNIVYC
Central Securities Depository
Kazakhstan Stock Exchange
Korea Securities Depository
Bank of Latvia
Central Depository
OMX
Estonian Securities Depository
OMX
Lithuania
OMX
France
Euroclear France
Euronext Paris – MATIF
MTS
Hong Kong
Bank of Japan
Jasdec
Midclear
Central Depository
NCSD Finland – APK
OMX
Greece
CCG
Monte Titoli
Lebanon
MCSD MISR for Clearing, Settlement
and Depository
Eurex Clearing
Clearstream Banking AG
MTS
Central Securities Depository
Bank of Greece
Hong Kong Exchanges and Clearing
Hong Kong Monetary Authority (CMU)
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Luxemburg
Mexico
Netherlands
New Zealand
S.D. Indeval
Euroclear Nederland
MTS
RBNZ Austraclear
NZX Ltd
VPS
Poland
National Depository for Securities –
KDPW
Russian
Federation
Slovakia
Slovenia
Central Securities Clearing
Corporation – KDD
STRATE
JSE Ltd
Spain
Iberclear
MEFF
MTS
Sri Lanka
Sweden
Switzerland
Taiwan
Thailand
Turkey
UAE - Dubai
United
Kingdom
USA
Banco de Portugal – SITEME
MTS
Depository Clearing Company
The National Depository Center
The Central Depository (Pte) Ltd
Monetary Authority of Singapore
Bank of Slovakia
CDCP
South Africa
Clearstream Banking SA
Norway
Portugal
Singapore
Tel Aviv Stock Exchange
OMX
VP
Finland
Germany
Keler
KSEI
Euroclear UK & Ireland
Zimbabwe
Central Bank of Sri Lanka
(LankaSecure)
NCSD Sweden – VPC
OMX
SIS
SIS x-clear
Taiwan Depository & Clearing
Corporation
Thailand Securities Depository Co.
Ltd.
ISE Settlement and Custody Bank INC
DIFX
Euroclear UK & Ireland
LCH.Clearnet
London Stock Exchange
Chicago Mercantile Exchange
Clearing Corporation
DTCC
Federal Reserve Banks
Omgeo
Options Clearing Corporation
Reserve Bank of Zimbabwe
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Common Standards?
Central Depository of Armenia
The National Depository Center (Azerbaijan)
Republican Central Securities Depository (Republic of Belarus)
Georgian Central Securities Depository
National Securities Depository of Moldova
Central Securities Depository (Kazakhstan)
Central Depository (Kyrgyzstan)
State CSD of the Republic of Uzbekistan
Interregional Stock Union (Ukraine)
The National Depository of Ukraine
Depository Clearing Company (Russian Federation)
The National Depository Center (Russian Federation)
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Questions?
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Thank you
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