Work Stream 4: Financial Market Infrastructures & Cross-Border Market Practices The Asia Pacific Financial Forum (APFF) Seattle Symposium, 7 July

2 Why did we need an APFF? Challenge to transition to a regionally focused economic growth model There is a critical role for global finance Financial markets require sound foundations for sustainability Economies of scale, greater depth and liquidity are enablers for competitiveness, stability and innovation Regional coordination will strengthen foundations and reinforce cohesiveness More needs to be done to align interests and issues of public and private stakeholders It’s about creating more choices for the financial services needs of individuals and corporations APEC can significantly increase contribution through an informal, inclusive and advisory public private platform

Participants Government Bodies Regulatory bodies Experts from the private sector International financial Institutions Standards setting bodies Multilateral and international organisations 3

The Five APFF Work Streams Insurance and retirement income Trade financeLending infrastructure Financial market infrastructure & cross- border practices Capital markets 4 Linkages & Structural Issues group Work Stream 4

Key dates 2013 – Q4 2013: Work Stream kick off meetings, participant invitations February : Updates to First ABAC Meeting, Auckland May 2014: Updates to Second ABAC Meeting, Santiago July 2014: Updates to Third ABAC Symposium, Seattle Washington USA September 2014: ABAC Report to Finance Ministers, Beijing

6 Work Stream 4 Two focus areas for recommendations to Finance Ministers Cross-border investment market practices, access and repatriation Technical substructure mapping for financial market infrastructure

7 China Thailand Malaysia Singapore Indonesia Philippines Hong Kong Japan 7 Geographic Focus Australia

Cross-border investment, market access & repatriation promoting cross-border investment flows emphasis on risk management, standards and platforms that can selectively harmonize market access repatriation practices, enhancing interoperability, liquidity and connectivity of domestic and cross- border financial markets, and reduce systemic risks 8

TECHNICAL SUBSTRUCTURE Rules, norms and conventions Ensuring solvency Prudential oversight Regionally focused Institutional infrastructure Financial Market Architecture POLICY AND PRACTICE Technology Standards Communication Standards Security and Resilience Promotion of liquidity Supervision Resolution Insurance Oversight, supervision Enhanced capital mobility Ability to recognize spillover effect between asset markets INSTITUTIONAL INFRASTRUCTURE Computing and Protocols

10 Work Stream 4: Next steps? Identifying ways to improve or define cross-border market practices, including KYC and AML and working with stakeholders on adoption of agreed market practices; Promoting a deeper understanding within the Asia-Pacific industry of the issues around a shortening of the settlement cycles and developing consensus on best practice; Identifying standards that can selectively enable harmonized market practices and cross-border connectivity across FMIs; and Facilitating better understanding of other key enablers required in the securities investment ecosystem that are being driven by current initiatives like Asia Region Funds Passport (ARFP), including domestic technical standardization, data availability, confidentiality and privacy rules/regulations, risk identification and management and the need for dispute, recovery and resolution mechanisms.

11 ContactCompany Beth Usama Rebecca Terner Lentchner Boon-Hiong ChanDeutsche