Transcript Concept of Link-Up Markets

October 2011
AMEDA Conference, Cairo
Joint Venture partners
Ten leading CSDs
Link Up Markets
-2-
Efficiency by interoperability
Past
Link Up Markets model has replaced
inefficient set-up

Single point of access for CSDs to participating
markets

Easy implementation of enhanced CSD-links

Reuse of efficient local infrastructures

Absorbing differences in market standards

Best-in-class CSD services for all asset classes
and multiple currencies

Continuous harmonisation of market practices

Flexible extension of market coverage in
Europe and beyond

Successful launch on 30 March 2009
Other CSDs
Today
Link Up
Markets
DIRECT CROSS-BORDER ACCESS via local CSD infrastructures
-3-
Business opportunities for Issuer CSD
 Become counterparty of foreign Investor CSD
 Expansion of customer base
 Efficient management of incoming link portfolio
 Attract more inflow by providing efficient services

 “As close to market as possible”
 Upgrade of existing CSD links to full service
 Participate in market harmonization efforts
 Position themselves as gateway into the region
 Own domestic market
 Single window into their regional network
-4-
Business opportunities as an Investor CSD
 Transform business model to become specialised
custodian for outbound business
 Diversify services
 Generate new revenue stream

 Build cross-border capabilities in-house
 Streamline existing cross-border business
 Direct access to markets at domestic CSD cost
 Simplify setup and maintenance of links
 Harmonization as a result rather than a pre-requisite
 Access 50% of European, 90% of African markets
-5-
Strategic Positioning for CSDs

 “Close the gap” reasons
 Opportunity to “benchmark” service offering to other
CSDs in the fast evolving post-trading environment.
 Independence
 Strengthen market and product position, while still options
available for regional strategy
 Educational factor and Know-How transfer
 Joining Link Up Markets offers comprehensive and more
useful “hands-on” involvement and knowledge transfer.
 Harmonisation and community effect
 Harmonising connectivity, standards, formats and
services between the partner CSDs.
 Platform for identifying other business opportunities
between the CSDs for new product development or new
partnerships.
 “Develop once and use many” interoperability concept.
-6-
Customer Benefits
Features
Pooling of domestic and
international business
Benefits for market participants
 Direct
access to domestic and international
markets via single, familiar interface
 Increased
liquidity pool allowing for greater
securities financing and collateral management
product usage
 Greater
scale and price advantage with preferred
CSD gateway
Unbundling of custodian
services
Risk reduction
* Pricing at discretion of each CSD
 Significant
fee saving potential* in

Cross-border settlement fees

Safekeeping fees for non-domestic assets
 Supply
chain consisting of market infrastructures
only, no intermediaries
-7-
Solution delivered as promised
 Successful launch in March 2009 with
just 12 months time-to-market
 Development cost well within announced
budget of EUR 10 million
 10 CSDs live: CBF, CSE, Helex,
Iberclear, OeKB, SIX SIS, VP, VP LUX,
CSE, Strate and MCDR – joined already,
strong interest from other CSDs globally
with highest focus in Europe
 6 CSDs already transformed their
business model into Investor CSD.
 Solution well positioned as showcase for
interoperability as well as facilitator for
T2S
-8-
Growing demand for CSD interoperability
 17.5 mio messages since the
beginning of Link Up Markets and
5.4 mio messages in H1 2011
 17.5 mio messages representing
approx. 4.4 million settlement
instructions
 >80% of settlements against
payment
 47% growth over 2010
 Each new market with additional
volume potential – inbound &
outbound
-9-
Key objectives in 2011
 CSDs that joined in 2010 and 2011 to become
active as both issuer and investor CSDs
 Finalise positioning for post-T2S world, i.e.
!
Link Up Markets as common interface to T2S
and develop common solution
 Further extension of market coverage in
Europe and beyond
-10-
Clive Cherry
CSD Implementation Manager
Link Up Markets
Plaza de la Lealtad, 1
28014 Madrid
Espana
Tel.: +34 91 709 5031
[email protected]