1. ISO 20022 and Regulatory Reporting
Alexandre Kech, Head of Securities markets & Standards, APAC
May 2016

2. The global utility for secure financial messaging services User-owned cooperative Headquarter Brussels Overseen by central banks Servicing 150+ settlement infrastructures globally ISO enabler

3. Belgium Canada Australia France China Germany Hong Kong Italy India
Oversight Group Co-operating Central Banks from 22 countries Led by Central Bank of Belgium SWIFT is domiciled and headquartered in Belgium
Belgium
Canada
France
Germany
Italy
Japan
The Netherlands
United Kingdom
United States
Switzerland
Sweden
ECB
Extended oversight
Australia
China
Hong Kong
India
Korea
Russia
Saudi Arabia
Singapore
South Africa
Turkey

4. Increase transparency, reduce systemic risk
G20 summit and new regulations
G20 commitments September 2009
2008 financial crisis: OTC derivatives pose risks to financial stability
Among others – to subject standardised OTC derivatives contracts to on- exchange trade, cleared through CCP and reported to TRs US
APAC EU
Dodd-Frank
Country specific
EMIR
TR’s:
DTCC 
TR’s:
DTCC 
Domestic MIs
Others
TR’s:
DTCC  (for GTR)
REGIS-TR 
UnaVista, KDPW, CME, ICE
 = connectivity can be done via SWIFT

5. Intensified Regulatory Development
Regulations are global and national
Source: KPMG, Evolving Banking Regulation, March 2015

6. Resiliency & reliability Regulation & compliance
Key trends are highly relevant for SWIFT APAC core businesses
Payments
Trends
Securities
Renewal
New systems: ISO messaging – rapidly growing interest in XML messaging capabilities
Multi-currency clearing, PvP
Extended operating hours (e.g. HK RMB 20.5 hrs)
Aging technology
Fin tech (distributed ledger)
Regional ambition-collaboration
ISO 20022
Real-time 24-7
Convergence btw high & low value
Real-time
(New services)
Issuer to investor CA announcement
Funds
Collateral management
OTC clearing
ASEAN Economic Community (AEC), CIPS, Pacific payment system
Increasing international connectivity of infrastructures
ISO adoption
Regionalization
ASEAN Economic Community (AEC)
Regional harmonization: ABMF, ASEAN Link, HK-CN, TW-SG, CSIF cross-border DVP
ISO adoption
Demand for safer and more reliable infrastructure
Cyber threats increasing
CPMI-IOSCO PFMI & Annex F for CSPs
Resiliency & reliability
Demand for safer and more reliable infrastructure
Cyber threats increasing
CPMI-IOSCO PFMI & Annex F for CSPs
Fighting financial crime, monitoring & control, compliance recommendations.
FATF, Basel III, FATCA, FCPA, AML, Sanctions
Regulation & compliance
CPMI-IOSCO Principles
Mandatory OTC clearing (collateral management challenge)
Securities regulatory reporting
T+2
APAC Securities 2020 strategy plan

7. Scope of Regulations in Europe
Derivatives
EMIR
2014
Money Market
MMSR/ SMMD
Mid 2016
Equity
MiFID II/ MIFIR
Jan 2018

8. EU Regulations Adopting ISO 20022 for Regulatory Reporting
EMIR
Money Market (MMSR)
Money Market (SMMD)
MiFID II / MiFIR
Scope
Financial and non-financial counterparties
OTC and listed derivatives
53 Euro banks (wave 1)
Euro Money Market transactions
12 GBP Banks
GBP Money Market transactions
Investment firms
All (but SFTs, primary markets, give-ups)
Information to be reported
Transactions
Positions valuation
Collateral amounts
Transactions
Transactions
Transactions
Reference data
Addressee
Trade Repository
ECB
NCBs (DE/FR/IT/ES)
BOE
Approved Reporting Mechanism (ARM)
National Competent Authority
Format
Proprietary format
Consultation feedback: ISO 20022
ISO 20022
ISO 20022
ISO 20022
Frequency & Deadline
Daily
D+1 at the latest
Daily
D+1 07:00 at the latest
Daily
D+1 07:00 at the latest
Daily
D+1 at the latest

9. Data Exchange between TRs and authorities
Proposal maintained:
An XML template based on ISO methodology
Harmonised
Ensures correct and
harmonised handling of communications
Compliance
High level of compliance with envisaged legal requirements
Standardised output, data exchange, performance and extensibility
Basis of Assessment
Operation
Positive improvements to STP, transparency, regulatory compliance and interoperability
Expected to reduce long-term costs to bot TR and authorities
Facilitative
Facilitate daily data collection and timely processing
APAC Securities 2016 detailed
Source: Draft technical standards on access to data and aggregation and comparison of data across TR under Article 81 of EMIR, ESMA, April 2016

10. Regionalisation Initiatives Progressing using ISO 20022IM B
SMI C C B

11. Trade Reporting - APAC Progress at a Glance
Staggered and at different stages of development CN
CFETS (PBOC) – IRS, RMB FX, credit
CSIS -SCM and FMCs to report OTC derivatives trades JP
JFSA (direct) or DTCC
OTC forwards, options, swaps, CDS
North Korea
Japan
South Korea KR
BOK-FSC
CR, IRD, FX and EQD
FSC designate KRX as TR (2015) IN
RBI – CCIL
FXD, IRS and CR
China
Nepal
Taiwan
Bhutan
Bangladesh
Philippines
India
Laos
Hong Kong
Myanmar
Thailand MY
Consultation issued in 2014 by BNM, SC and PIDM
CR, IRD, FX, EQD, Comm and Islamic Derivs
Vietnam TW
FSC – Gretai
CR, IRD, FXD, EQD and ComnD
Maldives
Cambodia
Brunei
Sri Lanka
Malaysia
Singapore SG
MAS – DTCC (LFTR)
CR, IRD, FX
Indonesia HK
HKMA&SFC – HKTR (DTCC as agent)
FXD and IRS
East Timor
Australia
Australia AU
TR rules phased in since 2013
DTCC, CME
IRS, FXD, EQD, CommD
In progress
Live
As at Jan Various sources.

12. “Recipe” for Standards
Why ISO for Reporting?
Preferred Data Model
“Recipe” for Standards
Universal Language
Adopted Globally
Ideal for harvest, aggregate and interpret data
Unambiguous, clear and equivalent irrespective of its source
Encourage consistent data submission
Is syntax agnostic but recommend XML
Has a development methodology, a registration process, and a centralised, machine processable “e-repository”
Open methodology for developing new financial messaging standards
Open methodology for harmonising existing financial messaging standards
Can be shared by business, legal and technical experts
Simplifies interpretation and implementation
Open and transparently governed standard
Platform neutral, free to download, implement and extend
Allows for characters such as Chinese, Thai and etc
Widely adopted in the financial industry – central bank and market infrastructures
US – US payments, DTCC, Etc,
EU – T2S, SEPA, ESMA, Etc.
APAC – CNAPS, JASDEC, SGX, ASX, Etc.
APAC Securities 2016 detailed

13. Towards a harmonised use of ISO 20022
ISO Harmonisation Charter
Publish your standards information in a consistent format on MyStandards [messages/versions used, release timeline, market practice]
Publication
Adhere to/promote Global market practice
Align with best practices for version management
Adherence
Market Practice
Information sharing
Share information on ISO messages, versions and market practice

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