Transcript
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Présentation d’Ineum Consulting

T2S and its practical implications for Investor Services

12th Annual Clearing and Settlement ConferenceLondon, October 2009

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Agenda

T2S Business implications

T2S Organisational implications

T2S Reality for a service provider and service taker

Lisbon agenda

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Project functional scope is laying foundation for EU competition with rest of the world

CashManagement

CashManagement

CollateralManagement

CollateralManagementProduct

DistributionProduct

Distribution

NetworkManagement

NetworkManagement

ConnectivityConnectivity MarginsMargins

AccountManagement

AccountManagement

LifecycleManagement

LifecycleManagement

HumanResources

HumanResources

Corporateactions

Corporateactions

ReportingReporting

DataManagement

DataManagement

SecuritiesFinancingSecuritiesFinancing

InformationTechnologyInformationTechnology

T2S impact

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that has implications on all industry participants in the value chain

InvestorInvestor

TradingTrading

CCPCCP

Custodians and CSDs

Custodians and CSDs

Quality of ServiceReduction in costsProducts diversity and coverageOne stop shop solutionReal-time and onlineStandardisation

Cost controlCustomer retentionGrowth engineHarmonised functionality

European footprintCost reductionTransparency

T2S catalyst and driver

InvestorInvestor

Custodiansand CSDsCustodiansand CSDs

Tra

de

Pos

t tra

de

Investor : Purchasing powerEU: Single capital marketTrade: Cost reductionPost trade : Business model

T2S catalyst and driver

MarketParticipants

MarketParticipants

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On which industry participants can take different actions

Broker/Dealer

AssetManager

TradingVenue

CustodianBank

GlobalCustodian

CSD

Local market A Foreign market X

CSDSub

CustodianCentral Bank

Central Bank

Foreign market Y

CSDSub

CustodianCentral Bank

Tax Issuance Registration

Tax

Issuance

Registration

Tax

Issuance

Registration

Asset Manager View Global Custodian View (I)CSD view Sub custodian view

GlobalCustodian

BDAM TR

CU CSD CB

GCGC

SCSC

CB

CSD CSD

CB

x xx x

x

x xx

BDAM TR

CU CSD CB

GCGC

SCSC

CB

CSD CSD

CB

x x

xxx

x xx

BDAM TR

CU CSD CB

GCGC

SCSC

CB

CSD CSD

CB

x

xx

xx

x xx

BDAM TR

SC CSD

Loc

al m

arke

t

CB

GCGC

SCSC

CB

CSD CSD

CB

x

x xx

x GC

SC

CB

CSD

xx

CurrentCurrent

FutureFuture

Foreigncountry X Y X Y X Y X Y Z

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Agenda

T2S Business implications

T2S Organisational implications

T2S Reality for a service provider and service taker

Lisbon agenda

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Covering any aspect in an organisation

EnterpriseArchitecture

IT process re-engineering

Static data management

Strategy

Information Technology

Lifecycle mngt and matchingConfiguration, interface and connectiviy requirements

Business and IT integrated vision of Target modelIT sourcing

ISO20022/4217/10962/4177/3166/18773-4/6166/ISO/IEC 7002:2005Party references

EU structuring, analyzing and planning of architecture

Payments and Income

Connectivity and training

Settlement and custody

Compliance and controls

Operations

T2S HelpdeskISO20022 instructions and reporting

Corporate actions on flowIntegrated T2 payment flow

New deadlines and transaction typesPosition management and status change

Integration of monetary transactionsInvestor compliance such as registration

NetworkMngt

ProductDev

ProductMngt

Sales

Business

Modular componentsIntegration of CCBM2 functionality and T2S Online

Risk, audit, legalPricing and

billingProjectsMarketing

Corporate

Migration and testingChange Management

Integration of nature of service and complexity of service into existing fee scheduleUnbundling and transparency

Branding on EU levelT2S white paper

CSD and/or T2S contractsCounterparty liabilities and regulatory reinforcements

Lobbying and road showsCustomer profitability

Settlement eligibility rules Hold and release function

Review of SLA’sAccount management

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Agenda

T2S Business implications

T2S Organisational implications

T2S Reality for a service provider and service taker

Lisbon agenda

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Testing access

Valuation and

analytics

QoS

Open standards

Reliability Customer service

Maximal added value

Automation

Low risk

Responsiveness

KQI &KPI

Structured tools and methods

Agility

The service taker will not wait to put pressure on its providers

Profitability

ComplianceAssetallocation

Costs

Communication

Transparancy

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Client proximity (Hub and Spoke model, merger or joint ventureInnovative tools (In-house, off the shelf customised or buying of provider)

Concentration of depositsGrowth marketsClient integration programsOpen architectureEarly adaptorMerger or Joint ventureVolume discountsCommoditization and industrialisation of service offerings (e.g. back office)

Effective methodologyBest practices

Managing changeBusiness performanceOperational efficient

Effective methodologyBest practices

Managing changeBusiness performanceOperational efficient

Economics of scopeFunctional driven

Economics of scaleCost price and political driven

And the providers will have to respond with common sense

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Agenda

T2S Business implications

T2S Organisational implications

T2S Reality for a service provider and service taker

Lisbon agenda

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To what extend is this perspective reality

1) Project risks

2) Regulatory impacts

3) Reshuffling of business models and competition

4) (Un)-Materialised aspects of the credit crisis

5) Market trends

6) T2S Version X+1

Preparation phase Specification Phase Migration Phase

2007 2009 2011 2013

Production

Programme planProgramme plan

4CB Internal tests

Software development and technical integration

ECB acceptance testingECB acceptance testing

Migration periodMigration period

UDFS2.0

URD5.0

1) Realisation of CCBM2, T2S Online, Pricing and T2S Contracts

2) UCITSIV, Harmonisation of securities law, MiFID2, new SFD, …3) Repositioning of EU custodians, US and EU global custodians,

Euroclear and Clearstream4) Legislation, lending, Risk Management, Capital markets and

restructuring5) Globalisation, issuance growth, automation, standardisation, T+0,

collateral demand, …6) Adding of corporate actions, derivatives and commodities to the

scope

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End


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