1. CSDs over SWIFT Current status, challenges and strategy
Market Infrastructures
May ACSDA

2. Market Infrastructures
Market infrastructures are one of the 3 top priorities of SWIFT 2020 strategy
Supporting more than 220 around the world, MIs are strategically important to SWIFT, and form a major part of SWIFT2020
SWIFT2020 Priorities | Core, Compliance and MIs
One-to-Many MIs
Many-to-Many FIs MI FI
Many-to-Many
Market Infrastructures
Messaging
Software
&
Connectivity
Shared
Services
MIs
Core
Compliance 2

3. Which market infrastructures use SWIFT today and why ?4
High Value Payment Systems - RTGSs
Low Value Payment Systems - ACHs
(I)CSDs and Securities Settlement Systems
CCPs
Market
Segments 7
Payment and cash management
Forex and liquidity management
Securities pre-trade/trade
Securities clearing and settlement
Custody and asset servicing
Funds
Trade and supply chain
Business
Areas

4. Let’s focus on CSDs: which CSDs are connected to SWIFT today ?
SWIFT has deep, global penetration, especially in mature markets
CSDs: 85 / 167 CA US MX
PAA PE BR AR CH 4

5. 800 million 85 12 to 16% 33 ISO 20022 9% growth > 60 % 90%
CSDs in figures
Global
Sales
Convention
12 to 16%
Market share in volume
MIs represent over a quarter of all SWIFT’s
volumes
2015 figures
33 ISO 20022 85
Projects to materialise in the next 24 months
Live CSDs, ICSDs and SSSs connected to SWIFT
800 million
FIN messages to and from (I)CSDs in 2015
9% growth
> 60 %
90%
FIN messages in 2015
Of SWIFTNet IA ,
Mainly for T2S, CREST, Jasdec,
DTCC and Euroclear’s Euclid
Of the CSDs / Central Banks that selected a T2S service provider chose SWIFT, using ISO 20022 5

6. CSDs have become instrumental to any major securities market evolution
Evolving
market model
Driving market changes
Risk Mgt.
CSDs are key to any regional project:
EU, ASEAN, MILA, SADC,
EAC
Evolving business: collateral,
investment funds, links with
CCPs
CSDs become change engines
for their markets
Driving market standardization
A clear move towards ISO and
Impact of regulation:
CPMI-IOSCO, ..
Focus on operational excellence
Unquestionable resilience

7. Driving market changes
What is SWIFT doing to support CSDs in their evolution ? CSDs are not treated as ‘simple customers’….
Evolving
market model
Driving market changes
Risk Mgt.
Develop complete messaging solutions with and for CSDs:
- CSDs can develop at their pace
without need to re-invest when
they decide to develop new
services
- more than counterparties
Develop communities around CSDs :
- migration to new standards
- commercial model attractive
to big and small players
- connectivity solutions
adapted to size and usage
Interoperable solutions using international standards
(ISO and 20022)
99.999% quality of services
24/7 support
Operational excellence services
Compliance with CPMI-IOSCO requirements

8. 85 CSDs, ICSDs connected to SWIFT
How do CSDs use SWIFT ?
CSDs’ participants
Cash leg
CSD to (I)CSD links
85 CSDs, ICSDs connected to SWIFT
Clearing and settlement
Asset servicing, corporate actions and custody
Collateral, FX and liquidity management
Regulatory reporting
In : foreign link into domestic market
Out : value added securities services in another market for CSDs’ participants
Agents, custodians
Cross-boarder clearing and settlement
Asset servicing
Link to collateral platforms
Funds hubs
Link to new SSS such as T2S
Link with clearing or settlement banks
Member of payment and RTGS systems 8

9. Some 15 CSDs communities are using ISO 20022 today
Communities, standardization and excellence of services are SWIFT key values
CSDs’ participants
Cash leg
CSD to (I)CSD links
ISO and ISO 15022
Some 15 CSDs communities are using ISO today
More than 30 CSDs
will launch new ISO projects in the next 24 months
Agents, custodians 9

10. Our value proposition for CSDs
Compelling messaging proposal
CSDs’ entire eco system
Complete securities and cash processing chain
Domestic and international
Links with other MIs : Euroclear, Clearstream
Value added services : compliance, analytics, ref data..
Harmonized usage of standards
Protects TCO
Ensures interoperability with all major systems
Facilitates CSDs developing new types of business (funds, collateral, asset servicing..)
Scalable solution
Scalable infrastructure
Scalable solution transparent to the market
Competitive and predictable pricing
Reverse billing : no need to re-charge customers and build a new invoicing mechanism
Competitive price for both small and big CSD customers
Infrastructure costs not impacted by volume evolution
Peace of mind : messaging solution operated at highest industry standards
Operational excellence
Resilience and risk management 10

11. Nordics case study: Leverage 20022 migrations to attract traffic from 6 banks and 4 CSDs over SWIFT
Participants

12. Case Study – Nordic CSDs
Preparing convergence to at domestic level in European markets
Nordic markets are made of Finland, Norway, Denmark and Sweden of which to 2 markets are moving on the T2S platform implementing the T2S guideline over 20022
All markets are progressively moving out of their proprietary formats in order to deploy new services and get prepared for future integration with the T2S markets
To lower down the cost of change for their participants, the CSDs are willing to offer co-existence of and while adapting their own internal systems
SWIFT is working on a domestic proposal enabling co-existence of standards at a competitive cost for the participants by leveraging their existing SWIFT infrastructures
IMs and Banks
IMs and Banks
15022
20022
Proprietary
15022
SWIFT domestic proposal
Co-existence
MIs –CSD
MIs –CSD

13. LinkUp Market and T2S (the Pan-European Securities Settlement System)
Case Study – LinkUp markets
LinkUp Market and T2S (the Pan-European Securities Settlement System)
LinkUp market was a hub connecting together about 10 European CSDs
The CSDs that had invested in this interoperability hub were facing 2 challenges with the arrival of the T2S platform: (1) make their interoperability hub scalable to the volume changes triggered by T2S, (2) interconnect T2S to their hub. The latest implied setting-up standards and a connectivity layer
SWIFT offered a scalable solution for cross-border links between CSDs over standards and a direct access to T2S with expertise on setting-up a based Settlement links
MIs –CSD
MIs –CSD
15022
15022
SWIFT inter-CSD link
20022
MIs –CSD
MIs –CSD

14. SWIFT’s VAN Solution for T2S
Market participant
CSD
T2S
SWIFT
Direct connectivity
Indirect connectivity
ISO20022
today: proprietary or ISO15022,
with T2S: as today or ISO20022
Technical Infrastructure to exchange data with T2S
Messaging Applications to handle the T2S flows
Consultancy Services to prepare and implement T2S

15. Technical requirements
T2S user activities in the T2S project SWIFT Services helping you along the way
Familiarise with T2S
Business study
Technical requirements
Integration project
Care
Impact assessment for T2S
Functional analyses for T2S
Support
Standards gap analyses for T2S
Integration design for T2S - testing and implementation
Care contract
Technical infrastructure review for T2S
End to End project Management
Training and knowledge transfer

16. Market Infrastructures – Global ISO 20022 adoption
200 initiatives
Under discussion > planned > rollout > live
90 countries
Europe
Asia Pacific
Americas FX
CLS
ISO20022 Adoption Trends_ACSDA 2016

17. Market Infrastructures – Global ISO 20022 adoption
ISO20022 Adoption Trends_ACSDA 2016