Merger Mania

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					Q1 2011

Merger Mania
Trading Venue
Consolidation Discussed

Consolidation among trading venues           just under £5bn ($7.7bn), including           the OTC markets will ensure that they
had been mooted for many months              debt. It will have a combined 6,700           do not hold a dominant position.
but few expected to see the rapid fire        listings, making it the world’s largest       In a joint statement both exchanges
succession of mergers in the first two        exchange by numbers of companies              have also said they would not sell Eurex
months of 2011. Within a short space of      traded as well as home to the biggest         or Liffe, because they “complement
time, the surprise London and Toronto        number of mining company listings.            each other ideally on interest rate
stock exchange deal was eclipsed             Regulators will also be raking the            products, with Eurex specialising in
by the NYSE Euronext and Deutsche            Deutsche Börse and NYSE Euronext              the long end of the interest rate curve
Börse merger while the Bats and              deal over the coals in an anti-trust review   and NYSE Liffe the short end.
Chi-X transaction albeit expected was        by the European Union which could             Although it is too early to determine
announced soon after the other mega          take up to 12 months. The combined            the outcome of the antitrust review in
tie-ups. The attention may be on the         entity aims to create the largest equities    Europe or the discussions in Canada,
front end execution component but it will    and derivatives markets group with            there is no doubt that the leading
be the clearing services and technology      revenue of $5.4bn according to last           contenders will try and break Deutsche
that could cause the most problems.          year’s figures of the separate exchanges.      Börse and NYSE Euronext’s hold on the
One of the driving forces, as with           This puts it at nearly double that of its     derivatives trading market. The LSE is
any mergers, is the cost savings and         next-largest rival, CME Group. Deutsche       already moving ahead with its launch
synergies. For example, NYSE Euronext        Börse would be the majority owned             of a pan-European equity-derivatives
and Deutsche Börse have estimated that       at 60% but the new company would              business in the second quarter. The LSE
they can derive an estimated €300m of        have joint headquarters in Frankfurt and      operates Russian, Scandinavian and
cost savings from information technology,    New York, with key operational centres        Italian derivatives businesses but they
clearing, and market operations, as well     in London, Luxembourg and Paris.              account for only 6% of group revenues.
as from corporate administration and         Careful scrutiny will be given to the         Chief executive officerXavier Rolet,
support functions. At the granular level,    combination of NYSE Euronext’s Liffe          who is leading the LSE’s acquisition of
the new exchange company has said it         and Eurex, the exchange jointly owned         Canada’s TMX Group previously stated
plans to streamline European derivatives     by Deutsche Börse and the Swiss               that the derivatives market in Europe."
and share trading and US stock-options       Stock Exchange. The deal would put            is dominated by the „duopoly” of NYSE
trading across multiple platforms,           over 90% of the Europe’s exchange-            Liffe and Eurex. Rolet has said he
while cutting down on future project         traded derivatives market in the hands        was aiming for “somewhere in the
spending and administrative costs.           of one organisation. According to             region of 25%” with the new platform
The trick of course is to migrate in         industry reports, the newly formed            although he did not give a timetable.
a seemingly seamless manner to an            company would trade more than 19m             Meanwhile, BATS Chi-X Europe, the
integrated single platform without           derivatives contracts a day, including        new pan-European stock-trading group
disrupting trading or losing market share.   more than 6m US options contracts.            being formed by BATS Global Markets’
This is easier said than done if history     Linking the two would not only bring          acquisition of Chi-X Europe is thought to
is anything to go by. However, it will not   much of the anticipated savings, but          be considering entering the derivatives
be the only stumbling block as there are     also likely to alter NYSE Euronext’s          fray with a platform. Bats Global Markets
already rumblings in Europe and Canada       plans to construct its own proprietary        operates an equity options platform in
about the merits of these acquisitions.      clearing unit on the continent.               the U.S. which they could leverage for
Politicians in Ontario, whose capital,       In their defence the companies have           futures and options trading in Europe.
Toronto, is Canada’s financial centre,        argued that they only have a small
are already debating the ‘net benefit’        slice of a global derivatives market
the LSE’s all share takeover of TMX          because the vast majority of trades
would produce. The combined group,           are over-the-counter. In addition, they
which will have a dual stock market          claim Europe’s fragmented clearing
listing and be jointly headquartered         system combined with the various
in London and Toronto, will be worth         regulatory pushes for transparency in


      12   FOR A RUSSIAN CSD?
           An interview with Eddie Astanin, CEO of the newly
           formed National Settlement Depository

      14   Lilla Juranyi, Global Head, Investor Services at ING
           Commercial Banking discusses different approaches to
           dealing with custody issues in central and Eastern Europe

           Natasha Sidorova, head of ING Securities Services in Russia
           explain the challenges of navigating the Russian market.

           DMA IN RUSSIA
      17   In Line With World Trends - Irina Kozachok, Director of
           Marketing and Client Relations at ARQA technologies
           takes a detailed look at Russia's trading infrastructure

           Clive Triance, Chief Executive Officer of Penson Financial Services Ltd.
           assesses the benefits of using a third party provider and considers the
           challenges and opportunities of extended outsource arrangements

      26   An interview with Stefan Lepp, Member of the Executive Board
           and Head of Global Securities Financing (GSF) at Clearstream

      28   REGIS-TR chief Thilo Derenbach talks about the Conception and
           present standing of the newly created OTC derivatives trade repository


                                          COMING TO TERMS WITH
                             30           NEW REGULATION
                                          Philip Brown, Member of the Executive Board and Head of
                                          Client Relations Europe & Americas, Clearstream Banking

                                          LESSONS FROM AN EMERGING MARKET
                             32           Wagner Anacleto, Operations Director, CETIP

                                          THE SPANISH MODEL
                                          Jesus Benito, Iberclear

                                          STAYING AHEAD OF THE GAME
                             33           Kavitha Ramachandran, Head of Client Relations,
                                          Maitland (Luxembourg) looks at the evolving
                                          role of the hedge fund administrator.

                                          BENCHMARKING GLOBAL
                             35           CUSTODIANS IS MUCH MORE
                                          THAN JUST CUSTODY
                                          By Tony Child

                                          TAKING CORPORATE ACTIONS
                             38           Standardisation and automation is only one part of the equation.
                                          By Kevin Maxwell

International Securities Services          Production Manager:                    Design:
Q1 2011                                    Alan Atterbury                                 
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                                                                                  the views expressed by
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Lynn Strongin Dodds                        Commercial Director: David Hancock            


CME Group Signs Term Sheet
With Global Dealers
CME Group, the derivatives               board comprised of several buyside     “Thanks to the collaboration and
marketplace has signed a non-            market participants, including         commitment of our founding clearing
binding term sheet with 10 global        BlackRock, Citadel, Fannie Mae,        members and client advisory board
swap dealers to support its clearing     Freddie Mac, and PIMCO.                members over several months,
service for over-the-counter (OTC)                                              we have designed a world-class,
                                         CME Group’s cleared OTC interest
interest rate swaps. The founding                                               open access and truly competitive
                                         rate swaps is an open access
members incldeBofA Merrill Lynch,                                               clearing solution for interest rate
                                         solution that provides market
Barclays Capital, Citi, Credit Suisse,                                          swaps,” said Terry Duffy, CME
                                         participants with the flexibility of
Deutsche Bank Securities,., Goldman                                             Group Executive Chairman. “These
                                         the OTC market without having to
Sachs, J.P. Morgan, Morgan                                                      groups have helped us bring to
                                         change their execution processes.
Stanley, Nomura, and UBS.                                                       market a clearing solution for
                                         The service builds on the strength
                                                                                interest rate swaps that will meet
The service, which was launched          of CME Group’s interest rate
                                                                                the needs of all qualified market
on October 18, 2010, has cleared         products business as well as
                                                                                participants. The non-binding term
just under $1 bn in gross notional       the risk management and legal
                                                                                sheet entered into today provides
value to date, and has 12 clearing       safeguards of CME Clearing. The
                                                                                additional momentum and further
members, including the ten founding      goal is to offer capital efficiencies
                                                                                demonstrates dealers’ commitment
members. In addition, the service        through cross margining OTC
                                                                                to support our solution and reduce
is supported by a client advisory        products with benchmark futures.
                                                                                systemic risk in the market.”

The Depository Trust & Clearing          in a timely, fair, and seamless        to global financial authorities and
Corporation (DTCC) has launched          manner, without any preferential       banking supervisors in fulfilling their
an automated portal to provide           treatment across geographic            regulatory mission in this regard.”
regulators worldwide with direct, on-    jurisdictions worldwide,” said
line access to global credit default     Stewart Macbeth, DTCC managing         The portal allows for each regulator
swap (CDS) data registered in            director and general manager of        to access reports tailored to their
DTCC’s Warehouse Trust Company           DTCC’s Warehouse Trust subsidiary,     specific entitlements as a market
(Warehouse Trust) global repository.     which operates DTCC’s global CDS       regulator, prudential or primary
The global regulatory service, which     trade repository. “We have been        supervisor, or central bank. These
currently 19 regulators around           committed since the inception          detailed reports are created for
the world, is the first of its kind in    of DTCC’s central repository to        each regulator to show only the
the financial marketplace. It was         providing data on global OTC           CDS data relevant to its jurisdiction,
designed based on guidance               derivatives transactions so that       regulated entities or currency, at the
provided by the OTC Derivatives          regulators can view risk exposures     appropriate level of aggregation.
Regulators Forum (ODRF) with             from a central vantage point as        The information DTCC provides
respect to data access protocols.        a means to help protect markets        through the portal is consistent with
                                         against systemic risk. DTCC            the data sharing guidelines outlined
“In constructing this new portal,        anticipates that the creation of       by the 40 plus regulators and
DTCC’s goal is to provide access to      this portal will be of great value     supervisors that comprise the ODRF.
OTC derivatives data to regulators


Buyside Group Creates
FIX Guidelines
for Broker Reports
A group of some of the world’s          includes Capital Group Companies,      aggressive in the FIX data fields. FIX
largest fund managers working           representatives from American          is the protocol used by the trading
under the umbrella of FIX Protocol      Century Investments; Eaton Vance       community to execute orders.
Limited (FPL) havedeveloped a set       Management; Fidelity Investments;
of guidelines for the information       Fidelity Templeton Investments;
U.S. broker-dealers can send            Franklin Templeton Investments;
them on post-trade reports.The          GMO; Lone Pine Capital and
goalisto ensure that buyside traders    Wellington Management Company.
understand where their orders
                                        The Subgroup recommends that
are being filled and whether the
                                        the broker-dealer include the final
executing venues were the best
                                        destination of an order, whether
choice for the fund manager.
                                        the transaction was executed on
The committee, known as the             a principal or agency basis and
BuysideExecution Venue Subgroup,        whether the liquidity was passive or

LSE Moves
to Millennium Platform
In the midst of the merger mania,       That outage, which has since been      traders. The LSE bought the
the London Stock Exchange               explained as “human error, caused      new platform in 2009 for about
finally migrated trading in its cash     the LSE to delay the move of its       $28.9 m because of the potential
market to the new Millennium            cash market from November 1 as it      to cut trading speeds to less than
IT platform on Monday without           investigated just what happened.       a millisescond from TradElect’s
any reported glitches.                                                         much slower 2.7 milliseconds.
                                        The transition to Millennium will
The successful switch comes after       allow the LSE to better compete
November’s embarrassing outage          with alternative trading platforms
at the LSE-owned multilateral           such as Chi-X Europe and BATS
trading facility Turquoise just weeks   Europe which have increasingly
after its migration to Millennium IT.   become popular for high-frequency



                                              Is the wait
                                              finally over for
                                              a Russian CSD?
                                               An interview with Eddie Astanin,
                                               CEO of the newly formed National
                                               Settlement Depository

How are the plans                        What are the main                       Russian capital markets and
progressing for the launch               challenges facing                       we can certainly reassure those
of the Russian CSD?                      this project?                           investors that they will have all
Will the launch definitely                                                        the necessary services at their
                                         A lively debate has taken place
take place and if so what                                                        disposal such as clearing and
                                         between two conflicting points of
is the time frame?                                                               settlement, corporate actions
                                         view as to whether the Russian
                                                                                 and, of course, safe keeping
Recently we have celebrated              securities infrastructure should have
                                                                                 of their assets. That’s why the
setting up the National Settlement       one or two CSDs because there have
                                                                                 appearance of a CSD on the
Depository. It was very nice to host     been 2 candidates for this position;
                                                                                 Russian landscape will be both a
not only our staff, but also our Board   National Settlement Depository on
                                                                                 positive and extremely valuable
and committees’ members as well          our side, we are a member of the
                                                                                 step for the Russian market.
as two regulators at the party; I        MICEX Group, and the Depository
mean Bank of Russia and Federal          Clearing Company, DCC, on the           National Settlement
Financial Market Service of Russia.      other. This company is owned by         Depository is a merger
                                         RTS. That has been the main focus       between MICEX Settlement
I am kidding. But to be serious,
                                         of the debate over the new CSD’s        House and NDC. What
the first draft of the CSD legislation
                                         profile - whether it will be a single    will be the involvement of
was accepted by our parliament
                                         CSD model or a two CSD model.           other important players
several years ago but now at the
stage of the second and hopefully                                                such as RTS and the
                                         Assuming the launch
final draft of the legislation our                                                regional exchanges?
                                         is successful, what
regulator has decided that some          opportunities will this                 National Settlement Depository
adjustments need to be made to           present both to Moscow                  as an entity was created with
the overall concept and there is         as a financial centre and to             the co-operation of the MICEX
still some debate about the final         International investors?                Settlement House and NDC. RTS
wording. So we are waiting for the
                                         We know and understand that             and DCC did not participate in this
final decision regarding this draft but
                                         a single Central Securities             process. We do, however, have
I believe that within several months
                                         Depository is an absolute               some plans to provide services for
this matter will be resolved and that
                                         necessity for foreign investors         other stock exchanges such as
the final regulations will be passed.
                                         wishing to participate in the           Stock company Saint-Petersburg

                 We know and understand that a single
                 Central Securities Depository is an absolute
                 necessity for foreign investors wishing
                 to participate in the Russian capital markets.”
Currency Exchange and in                    platform. Because of this we may         improvement once that is published.
November we started to provide              have to operate for quite some time,     This has recently been discussed
settlement services for this exchange       possibly as long as three years,         by our Supervisory Board and is a
particularly for municipal bonds.           with two separate IT platforms,          matter of great importance to us.
                                            one for securities and one for cash.
So what if a foreign                        So it’s essential that we have a         How do you propose to
investor wishes to do                       solid and cohesive IT strategy for       overcome the regulatory
business with both                          this period and we are now in the        challenges being
MICEX and RTS?                              process of devising this strategy.       thrown up by new US
Well that shouldn’t prove too much
                                                                                     and EU regulations?
                                            Which global (non
of a difficulty. There is no reason at all                                            This does not concern us directly
                                            Russian) institutions are
why an investor shouldn’t use both                                                   at the moment but we are watching
the floor of RTS to trade securities
                                            involved in the project?
                                                                                     the situation carefully, especially
and the facilities and services of          A number of the very biggest global      the European situation. We are a
the National Settlement Depository          players, companies such as JP            member of ECSDA, the European
for safekeeping of their assets.            Morgan Chase, Deutsche Bank,             Central Securities Depositories
However if there continues to be            and ING Commercial Banking,              Association, so, theoretically at least,

                  A number of the very biggest global players,
                  companies such as JP Morgan Chase,
                  Deutsche Bank, and ING Commercial
                  Banking, are our shareholders and many of
                  their representatives and staff sit on our
                  various committees.”
the absence of a direct contract            are our shareholders and many            we are involved in this discussion but
between RTS and the new NSD                 of their representatives and staff       it is not currently a challenge for us.
then that could, conceivably, place         sit on our various committees,
an obstacle in the path of investors        which is very useful when it comes       Do you foresee Moscow
who wished to operate in that way.          to discussing new products and           becoming the main
                                            new services. And of course we           regional financial centre
Will the new CSD be able                    work very closely with our partners      for the whole of Central
to deal with all financial                   Clearstream Banking and Euroclear        and Eastern Europe
instruments including repos                 Bank. We have accounts with both         or just Russia?
and securities lending?                     these ICSDs and they provide some        I would hope that at some stage
Yes. We already provide services            settlement services for our clients,     NSD becomes a regional ICSD and
for our clients in repos and in April       for example with Eurobonds.              when I say regional, I mean firstly
2011 we are going to present                                                         for Eurasia in co-operation with our
                                            What is being done to
them with some brand new                                                             colleagues from these countries.
                                            guarantee standards
securities lending technology.                                                       I believe the demand is there
                                            in the area of risk
                                                                                     both from industry practitioners in
What technology challenges                  management (both systemic
                                                                                     these countries and from investors
are arising and how are                     and trading risk)?
                                                                                     from those countries who wish to
these being overcome?                                                                operate in the Russian financial
                                            NDC has received an AA- rating from
This is a huge challenge for us             Thomas Murray. That’s quite a high       markets with Russian securities.
at the moment because we are                rating and means low operational         For those investors the Russian
in the process of changing our              risk. As NSD we are going to be          CSD would be a point of entry into
securities IT platform. And once            included in the 2011 Thomas Murray       the Russian financial markets.
that has been completed the next            rating survey in order to get a credit
step will be to change our cash IT          rating and I hope you will see a great



Lilla Juranyi,
                                         network managers but also for the
                                         local sub-custodian banks to assess
                                                                                    variety of local differences in one
                                                                                    region. However, it is important
Global Head, Investor
Services at ING Commercial               the unified features of 8-10 countries      to find the right balance between
Banking discusses different              with such significant differences.          the role of the regional relationship
approaches to dealing with               Occasionally, creative solutions           and the local market specialists.
custody issues in central                had to be developed to highlight           Some clients prefer using the
and Eastern Europe                       “regional strength” to clients. On         regional point of contact while
                                         the other hand, nobody doubts,             others opt to go directly to each
It has been a long-lasting dilemma       if a regional approach is set up           local office and there are also
as to whether the custody world          correctly, that a sub-custodian can        those that use a combination
goes for the regional, multi-market      provide a uniform service, provide         of both these approaches.
or the individual country approach       easier market access to several
                                                                                    There are, however, certain issues
when a geographical region is to         countries in the region and have a
                                                                                    that need a wider remit. This is
be assessed. Global custodians           central IT platform which, in turn, will
                                                                                    particularly true of the harmonisation
as well as local sub-custodians          considerably mitigate the risks and
                                                                                    of all procedures, such as a
such as ING Commercial Banking           enhance operational efficiencies.
                                                                                    European Union member doing
are all faced with the same issue.       The best way to have a good                business with Russia or Ukraine. This
The terminology often has different      understanding of the challenging           is not only difficult because of the
meanings and sometimes the               CEE markets is to standardise the          status of being in or outside the EU
regional or multi-market provider        service and offer strong, regional,        and using local currency or euro, but
terms are used as synonyms.              single point of contact relationship       also due to the significant differences
During the pre-crisis period             managers. This efficient regional           of the market infrastructure and
global custodians, including ING,        relationship model, which is strongly      flexibility of the authorities to
increasingly tried to appraise a whole   supported by the local market              adopt international trends.
region like Central & Eastern Europe     specialists, mitigates the clients’
(CEE). It was a big challenge for the    pain when they are faced with a

                 It has been a long lasting dilemma as
                 to whether the custody world goes
                 for the regional, multi-market or the
                 individual country approach when a
                 geographical region is to be assessed.”

                                         THE RUSSIAN
                                         AND OPPORTUNITY
                                         by Natasha Sidorova, head of ING Securities
                                         Services in Russia explain the challenges
                                         of navigating the Russian market
Russia has always been positioned        be implemented but things do             from brokers to custodians) plus
at the top of the tree in terms of       now seem to be moving forward            the further liberalisation of the
the relative importance of CEE           with recent break-through in             government bond market. The
countries due its size, strengths,       legislation on insider trading, stock    latter is not only going to make
challenges and the ever changing         exchanges and clearing activity          investments in government debt
environment. It is the same within       implementation of which should           instruments more attractive and
ING’s CEE network: Russia is             lead to major renovations in the         easy for foreign investors, but also to
taking the lead in the region with       market infrastructure. Introduction by   eliminate or at least level the current
its transaction volumes and clients’     FSFM of the system for monitoring        differences between settings required
portfolios as well as with its role to   of stock exchange trading is one         for equities and debt instruments,
support market developments.             of the practical examples of the         up to potential introduction of OTC
                                         serious intentions to combat             trading for government instruments,
Living in Russia, knowing and
                                         unlawful brokerage activities,           not permitted at present.
loving the country, it is always
                                         market manipulation and illegal
difficult to stay indifferent and                                                  It is also clear that over the last
                                         usage of insider information.
neutral towards its evolution. At                                                 year the regulator has been closely
the same time, constantly dealing        Other promising recent major             addressing some of the key risk
with foreign investors and knowing       initiatives include the creation of      issues, associated with the Russian
their vision of the market, it has       several sub-government groups on         market, such as registrars’ risks and
become impossible for me to              the IFC, major proposed changes          stability as well as transparency of
abstract myself from how this            in the tax agent functions (switching    the market. In particular, this relates
country is seen from the outside,
and sometimes from the bitter truth.
For many years, Russia has
been challenging the other
BRIC economies and teasing
foreigners looking to invest in
Russia with promises for major,
imminent infrastructure changes.
Nevertheless, until very recently
nothing had changed, even in
the wake of the country’s senior
officials having announced their
ambitions to make Russia (Moscow)
an International Financial Centre,
similar to London and Hong
Kong. Right from the outset there
has been confusion and a lack of
clarity over just how the plan would

to the practical application of the
principle of joint and several liability                    The best way to have a
of the issuer and the registrar for the
maintenance of the shareholders’                            good understanding of the
register, proposed introduction of
amendments to the operational
procedures of the registrars that are
                                                            challenging CEE markets is
supposed to mitigate the fraud risk,
changing licensing requirements for
                                                            to standardise the service
the registrars and introduction of
new minimum capital requirements
                                                            and offer strong regional
for different categories of market
participants. Another aspect relates
                                                            single point of contact
to improvement of the market’s
corporate governance practices                              relationship managers.”
– better protection of rights of
minority shareholders in course of         newly re-organised NSD (formed out         a major problem. The President’s
mandatory tender offers, guidelines        of NDC, the settlement depository          recent speech in Davos, which
for issuers on disclosure of material      of the MICEX Stock Exchange after          was devoted to the modernisation
information via internet and clear         NDC joined MICEX Settlement                plan of the Russian economy and
determination of the period within         Chamber) still fight for their first prize   creation of favourable market
which dividends have to be paid            of being awarded the title of CSD.         conditions, did not leave audiences
– i.e., within 60 days after the           Whereas DCC could be satisfied with         that optimistic. Despite the recent
decision on payment of dividends           the role of “one of the two”, NSD’s        regulators’ initiatives the fairness of
has been taken by the company.             ambitions are to become the “one           justice in Russia (The Khodorkovsky
                                           and only.” And, as often happens           case being an often cited example),
Separate discussions are held
                                           in Russia with regard to other such        bureaucracy and corruption, and
on another area of the securities
                                           matters, the very concept of the           the overall level of safety (The
market, being development of repo
                                           CSD has still not been fully decided.      Domodedovo bomb attack, high
market and securities lending and
                                                                                      levels of crime, the lowering of
introduction of close-out netting.         The model keeps changing, going
                                                                                      ordinary Russians’ living standards),
                                           from a CREST like concept to
Rules on foreign securities                                                           has left investors concerned.
                                           various variations on that theme
admission to the Russian market
                                           due to the efforts of major lobbying       However, it is not all doom and
have been further outlined, and
                                           groups. At the same time, local            gloom. We are optimistic about
FSFM has published the draft
                                           custodians with foreign origins            the future which is why we have
order introducing the procedure
                                           have also lobbied robustly and             invested in this market and built a
of circulation and recording of
                                           finally made their voices heard. The        strong presence in Russia. We do
ownership rights on securities
                                           latest trend is to make the CSD            believe that the forthcoming changes
assigned for qualified investors
                                           model satisfy and be recognised            will finally make an impact and that
and securities of foreign issuers,
                                           by foreign investors (including            Russia will become a transparent,
intended at making investments in
                                           17f-7 eligibility criteria and similar     attractive and safer country to do
foreign securities more attractive
                                           foreign compliance requirements).          business in. Competition is strong
and transparent. Meanwhile, first
                                                                                      from peer global banks and a few
foreign securities – Belarussian           Looking ahead, the CSD saga has
                                                                                      state ones but we are proud to
government bonds – have been               still a long road to run especially in
                                                                                      be the largest custodian in Russia
already admitted to the market.            the wake of MICEX announcing a
                                                                                      in terms of assets and one of the
                                           plan to buy around 53% of RTS.
In spite of the above developments                                                    few top market players who serve
                                           The regulator does not seem to have
and plans for the future, there is                                                    the majority of foreign investors
                                           much power in the decision-taking
one area where the progress is                                                        who increasingly demand better
                                           process, and has even admitted
more than slow, and this is the                                                       service levels, products and lower
                                           that it is at the crossroads over the
area of the central securities                                                        fees. It remains to be seen how
                                           best solution and what kind of the
depository regulations. The two                                                       much time it will take before the
                                           CSD the market really needs.
main candidates linked to major                                                       Russian banks begin to compete
stock exchanges – market-owned             The other issue is that the investment     equally on quality of service and
DCC (the settlement depository for         climate in Russia has not really           products that foreign investors
the RTS Stock Exchange) and the            improved and corruption still remains      demand from their custodian.


                                        IN RUSSIA
                                        In Line With World Trends - Irina Kozachok, Director of
                                        Marketing and Client Relations at ARQA technologies
                                        takes a detailed look at Russia's trading infrastructure.

In Russia, DMA is the prevailing
method used by institutional                            Trying to meet the needs
and private investors to get
access to exchange trading                              of brokers IT vendors had
by financial instruments.
Trying to meet the needs of brokers                     been gradually providing
IT vendors had been gradually
providing them with opportunities                       them with opportunities
of trading from remote terminals
at both Russian and international                       of trading from remote
trading venues which meant access
to new classes of instruments,
and new modes of trading and
                                                        terminals at both
settlement. Access to international
venues is generally implemented
                                                        Russian and international
through integration with interbroker
technological networks (like GL NET).
                                                        trading venues.”
Sometimes however it could be
direct integration of “Russian broker   For particular venues (FORTS),        they have become a necessary
– foreign primary broker” type.         rules and algorithms implemented      component in QUIK brokerage
                                        inside the trading system can be      system configurations used by
Presently “the standard set”
                                        used. They may be used as a           banks and investment companies.
offered by Russian DMA-systems
                                        supplement to the risk assessment
includes such features as:                                                    At the same time with striving for
                                        model implemented in the brokerage
                                                                              software optimization to accelerate
• access to different trading           system or used dependently when
                                                                              the operation of the brokerage
venues from the same terminal,          the risk assessment module of
                                                                              systems, developers including ARQA
• multi asset trading in                the brokerage system does not
                                                                              Technologies as well are intensively
different modes (Level 2,               work for the given market.
                                                                              working to work out special solutions
REPO, transactions with central         As the basic functional set of the    and process loops for organizing the
counterparty or Central Bank),          brokerage system goes together        low latency direct access to trading
• taking delayed settlement             with the risk management module,      platforms of most popular trading
with any lag into account.              the developers encounter a kind of    sites (exchanges or their segments).
                                        challenge as far as operating speed   To develop above solutions the
A huge advantage of DMA systems         is concerned. The advantages for      FIX protocol is used. ARQA
made in Russia is that they include     the organization of broker service    Technologies has created two low
a built-in risk management module       provided by functional capabilities   latency interfaces for direct access
with pretrade control of risks          that allow evaluation and reduction   to trading systems of Russian
and positions in compliance with        of risks at the time of sending       exchanges: FIX2MICEX (access to
standard rules set by the broker.       an order are such, however, that



                 A huge advantage of DMA systems made
                 in Russia is that they include a built-in
                 risk management module with pre-trade
                 control of risks and positions in compliance
                 with standard rules set by the broker.”
MICEX Stock Exchange, MICEX            market data and sending transactions             using FIX, it makes available
Government Securities Market and       from QUIK server to external                     the whole functional scope of
Money Market) and FIX2PlazaII          software systems with access to                  QUIK server as regards pretrade
(access to FORTS). Some                international trading venues. The                control as well as pretrade control
characteristics of these solutions     QUIK’s program interface FIX is also             implemented in trading systems
are shown in the table below.          used to export data on orders and                of some exchanges (FORTS).
Pretrade control of operations         trades from QUIK server to external
                                                                                        As a result of above processes,
is carried out by the exchange         systems of the broker (accounting,
                                                                                        DMA attains a sufficient degree
itself for the FORTS or using          risk management, and other).
                                                                                        of development in Russia from
information received from QUIK         Some characteristics of this solution            the viewpoint of international
server for MICEX markets.              are shown in the table below.                    standards, has its own advantages
                                                                                        and uses comprehensible
Owing to the versatile nature of       This solution can be used to
                                                                                        technologies to arrange both-way
FIX protocol, this interface enables   arrange access to all markets
                                                                                        connectivity with Russian and
low latency connectivity from          represented by QUIK. If applied
                                                                                        international exchange markets.
external trading platforms (other      to provide connectivity with QUIK
brokerage systems and algorithms)
to exchange trading systems. This
feature may be of interest for both
                                         Pretrade control of operations                                   Available
Russian and international traders
wishing to use familiar interfaces       Feasibility of transactions                                      Available
of their own systems to provide
access to trading venues.                Feasibility of obtaining market data                             Available
As everywhere in the world, the
                                         Processing time per one FIX transaction (the time of
implementation of low latency access                                                                      90 μs including
                                         processing a transaction
to trading venues requires both                                                                           pretrade control
                                         by the exchange trading system not included)
adequate software and complete
infrastructure. Implementing joint
                                         Delay in reception of market data                                100 μs
projects with brokers at its Moscow
Data Center, ARQA Technologies
builds such complete facilities
for high-speed access to the
exchange trading systems.                Pretrade control of operations                      Available
FIX protocol can be applied for
integration of external software         Feasibility of transactions                         Available
platforms with the Russian broker’s
                                         Feasibility of obtaining market data                Available
QUIK server as well. Originally
such integrations were intended for
                                         Processing time per one FIX transaction
sending transactions from external                                                           6-7 ms including the transaction
                                         (the time of processing a transaction by the
systems through the QUIK server                                                              processing time at QUIK server
                                         exchange trading system not included)
to the exchange trading systems
available in QUIK. Later, upon                                                               200 ms including the buffering
requests of brokers, projects were       Delay in reception of market data
                                                                                             interval for listing by QUIK server
implemented aimed at receiving


                                                                    Survival of the fittest
                                                                    will be the case for
                                                                    trading venues as
                                                                    well as CCP’s and
                                                                    it will undoubtedly
                                                                    lead to consolidation
                                                                    in both spaces.”

Clive Triance, Chief                 that allows each of them to focus      has felt the effect of both the arrival
Executive Officer of Penson           on building and selling the products   of technology and globalisation.
Financial Services Ltd.              they are good at? Have we, the         Mid tier and larger firms the world
assesses the benefits                 market, missed something?              over have embraced both changes.
of using a third party                                                      They have used the impact of
                                     One way to address this question
provider and considers                                                      globalisation to move functions
                                     is to look at other industries and
the challenges and                                                          within their core business to new
                                     understand what has occurred
opportunities of extended                                                   locations that provide process and
                                     and how they have structured
outsource arrangements.                                                     cost efficiencies. Many companies
                                     themselves. Of interest is the way
                                                                            have also embraced outsourcing,
The financial markets and trading     they have divided their business
                                                                            which allows them to operate a
firms of London have been trail       into core expertise and revenue
                                                                            successful business without actually
blazers in embracing automation      areas as well as recognising those
                                                                            owning every part of the end to
and globalisation but one question   functions that others can complete
                                                                            end cycle of their business flow.
remains. Have they really gone as    for them in a more efficient manner.
far as they safely can in creating   Just about every firm from the local    As we all know, outsourcing is not a
an automated, outsourced solution    grocer to the global conglomerate      new initiative. It is used to describe


                The global economic downturn and ever
                increasing regulatory demands are forcing
                more financial trading firms to consider
                outsourcing their post-trade responsibilities”
more than one thing and is actively      example in the areas of financing          participants. Survival of the fittest will
employed by many of the worlds’          or specific client reporting.              be the case for trading venues as
leading international companies.                                                   well as CCP’s and it will undoubtedly
                                         The rest of the processes can be
Take for example the The Stobart                                                   lead to consolidation in both spaces.
                                         outsourced to a third party which
Group, a name synonymous with
                                         can save time and effort. With            The deepest pockets
road haulage that also has rail,
                                         so many events occurring the
sea and air transport arms to its                                                  As we all know this is a volume
                                         possibility of process duplication is
logistics business. They provide                                                   driven business and those with
                                         extremely high unless considerable
haulage to many of the top retail                                                  the largest wallets benefit from the
                                         investment has been made in
manufacturing companies such                                                       lowest fees. Why then would a
                                         straight through processing
as Tesco and Homebase. If these                                                    mid tier trading firm want to own
                                         platforms and experienced staff.
firms had to run their own logistics                                                and fund the cost of a back office?
their costs would sky rocket. With       A firm that trades an emerging             For example, would it make sense
carefully structured outsourcing deals   market may find it more efficient           for Tesco to own and maintain its
they are able to focus on their core     to tap into an outsourced pool            own haulage fleet with all of their
business, giving them the freedom        of skilled resources rather than          associated costs? Would SKY have
to articulate their unique selling       having that support in-house.             a factory line producing digital set
points and grow their revenue.           The global economic downturn and          top boxes? This would detract
                                         ever increasing regulatory demands        from their core business and lead
Outsourcing can                                                                    to inflated costs that would make
make a difference                        are forcing more financial trading
                                         firms to consider outsourcing their        no economic sense for them.
The same dynamics apply to many          post-trade responsibilities. Lower        True transaction cost analysis is
other industries including financial      costs cannot truly be realised            needed and many firms would
services. Over the past ten years,       until the clearing and settlement         benefit from moving from a fixed
there have been an increasing            landscape is resolved which will          cost base to a variable and,
number of fund managers who              take time. The European Union             perhaps critically as they grow,
have struck outsourcing contracts        push towards interoperability             a more scalable solution. In the
with major global banks for fund         has not been fulfilled and, in fact,       broking world I am sure we are
services processing. Global and          Europe has seen an increase and           about to see a revolution where
regional brokers and other trading       not a reduction in the number of          chief executives and chief operating
firms by contrast have been far           central clearing parties. Until this is   officers undergo a review of their
slower to embrace true back office        resolved, trading costs will remain       business across the front, middle
outsourcing. According to a study        high in relation to the US which has      and back offices.. Only then will we
undertaken a few years ago, there        one clearing and settlement entity.       really have a fair model where the
are about 160 events that can
                                         In addition, the European trading         end investor isn’t overpaying for
occur in the lifecycle of a trade.
                                         landscape will not be able to attract     market inefficiency. Although many
This ranges from the gateway
                                         the overseas flow that it craves.          new trading firms have decided to
that receives the trade through to
                                         According to industry estimates,          outsource post trade responsibilities
the static data, on to validation
                                         over 50% of the worlds trading still      over the last few years there are
processes, settlement, books and
                                         occurs on US exchanges. When full         numerous well established brokers
records, reconciliation and P&L. Just
                                         interoperability commences there          who would benefit from the scale,
40 of those events can reasonably
                                         will be an explosion of new market        expertise and cost reductions that
be identified as differentiators, for
                                                                                   an outsource partner can provide.


in the middle
Already established in the back                                                    with cost considered not as a
                                                                                   simple in-house versus outsource
office of many investment managers,                                                 equation, but one that takes account
outsourcing is moving into the middle                                              of total cost of ownership over a
                                                                                   five to seven year lifecycle. The
office. Sarah Underwood considers                                                   cost umbrella may also shelter the
the challenges and opportunities of                                                price of keeping up with regulations,
                                                                                   introducing new products and
extended outsource arrangements                                                    moving into new jurisdictions.
After years of hesitation caused by       business director at investment
                                                                                   A maturing market
concerns about control, cost and          management consultancy Investit,
flexibility, investment managers           says: “An asset manager needs            Market maturity has also created
are moving with significant                to have a full understanding of          what Hockley terms new frontiers
momentum towards outsourcing              business strategy and the operating      in outsourcing. He explains: “Once
middle office functionality.               platform that is needed before           a firm is in the outsourcing space,
                                          considering a sourcing strategy.         where does the outsourcing frontier
A decade ago, the driver behind
                                          The decision to outsource often          lie? The hand-off between client and
outsourcing the back office was
                                          reflects the philosophy of a firm          provider is no longer in one place.
predominantly cost, particularly
                                          about its business, perhaps it           Defining frontiers is important, also
the desire to replace fixed costs
                                          believes its remit is to create and      where responsibilities and liabilities
with more flexible arrangements.
                                          distribute investment products           lie. The equity trading process is fairly
Now, asset managers are far more
                                          making outsourcing an acceptable         commoditised so it is easy to hand
discerning and demanding when it
                                          solution. Then there are practical       off, but processing derivatives is not
comes to adding the middle office
                                          catalysts to think about, such as        so commoditised and frontiers are
to an outsourcing contract. Some
                                          technology infrastructure that is near   different. Frontiers for every part of
remain driven by cost, but in a far
                                          the end of live or a platform that       an outsource must be pinned down.”
more complex way, others need
                                          is no longer scalable and flexible        Growing sophistication in the
to rethink technology platforms
                                          enough to support future strategies.”    user community is reflected in
that are no longer fit for purpose
in an increasingly sophisticated          Hockley notes that outsourcing           a competitive supply market
market, and a few suffer the              investment operations is a 10 year       dominated by custodian banks
‘burning platform’ problem caused         old phenomenon. “In the first five         seeking to generate multiple fees
by vendors that stop upgrading            years people were learning their         from one asset base and move
and maintaining old products.             way forward. Only now are we in          up the outsourcing value chain
                                          the second phase of the market,          from the back office to the front
Outsourcing the middle office may
                                          where there is a degree of maturity.”    office. Working with start-up asset
be appealing, but there is still a need
                                                                                   managers, some are also entering
to consider all the options of build,     This maturity extends the issues and
                                                                                   into the front office with complete
buy or outsource. James Hockley,          opportunities around outsourcing,

outsource solutions that leave            Glaysher says outsourcing for           smaller steps. Asset managers in
only strategy and stock picking on        start-ups is the company’s fastest      the US take a mixed approach.”
the asset manager’s desktop.              growing aspect of its asset
                                                                                  Simon Pilkington, State Street
                                          processing business and sees the
Toby Glaysher, senior vice president                                              head of business development and
                                          provision of outsourced front office
and head of global fund services                                                  product strategy for investment
                                          platforms handling functions such
Europe at Northern Trust, says:                                                   operations in Europe, says it can
                                          as trade execution and pre-trade
“There are natural synergies                                                      take six to nine months from
                                          compliance coming into scope.
between the middle office and                                                      deciding to outsource to selecting
back office – the same trades,             Before this, the challenges of          a provider and concluding a
but a different slice of data. As an      middle office outsourcing must           contract. It can then take a further
asset servicer, a custodian can           be overcome. As well as control         12 months for the outsourcer to
support multiple clients, reducing        issues, these can include data          bring the client business on board.
costs, increasing efficiency, cutting      integration, the time it takes to get
                                                                                  He explains: “The challenge is
time to market for new products,          up and running, consistent global
                                                                                  integrating the client’s front office
reducing capital expenditure on IT        coverage and, at a basic level,
                                                                                  with the middle office of the provider.
and transferring operational risk.”       deciding exactly what to outsource.
                                                                                  Inbound transactions need to be
He draws the outsourcing line at          On the last issue, Daron Pearce,        integrated with data feeds and
‘anything that differentiates the         head of asset servicing at BNY          back end data and data must
asset manager’, but warns that            Mellon UK & Ireland, comments:          then be passed back to the client
outsourcing is not as easy it may         “Deciding on what to outsource          in a way that will work with its
first appear. For large organisations,     is not just about cost, but also        systems and match the way it uses
loss of control can be a real issue       about future proofing technology         data. There is significant time and
in outsourcing. “Not all providers        architecture and operational            complexity in data integration.”
are flexible about making changes.         infrastructure, and considering
                                                                                  Having conquered data
A change process needs to be              what regulation will mean going
                                                                                  integration itself, State Street
agreed that is more formal than an        forward. Global asset managers
                                                                                  claims to differentiate in the
in-house arrangement, but does            particularly need to question
                                                                                  market by providing a single,
have the benefit of showing the true       whether they will leverage the
                                                                                  global integrated architecture
cost of change. For example, if a         outsourcing infrastructure and
                                                                                  that allows clients to start small
firm wants to half its reporting cycle     experience of companies already
                                                                                  in outsourcing and build out on
for a client, the outsourcer must be      tackling regulatory issues.
                                                                                  a global basis as they develop.
able to manage immediate change.
                                          Our experience is that UK firms are
The need is to select an outsourcing                                              Kevin Bonar, EMEA head of middle
                                          more comfortable with a big lift and
partner very carefully, but overall the                                           office & wealth management at Citi
                                          move to a one stop shop outsourcer,
net benefit of mid-office outsourcing                                               Global Transaction Services, concurs
                                          while those in continental Europe
is difficult to argue against unless                                               with the view that international
                                          are more conservative and favour
the manager is a behemoth.”                                                       capabilities are essential, as is the
                                                                                  flexibility for clients to introduce new
                                                                                  asset classes and instrument types
                                                                                  quickly and efficiently. He says: “This
                                                                                  is not just about transaction services
                                                                                  any more. The sophistication of
                                                                                  many firms and their desire to add
                                                                                  more products and connect into
                                                                                  new jurisdictions means they often
                                                                                  turn to us for help as they evolve
                                                                                  investment strategies. We have
                                                                                  the capability and knowledge to
                                                                                  advise them, bringing components
                                                                                  from across Citi to help clients
                                                                                  not just to outsource the middle
                                                                                  office, but to unlock value.
                                                                                  Interconnecting with other parts
                                                                                  of Citi is a sea change for us.”


                                              The Road
                                              An interview with Stefan Lepp,
                                              Member of the Executive Board and Head of
                                              Global Securities Financing (GSF) at Clearstream

What has been the impact                management process across all            Can you tell me about the tie
of the financial crisis?                 products and gives us immediate          up with BME and Iberclear?
                                        access to liquidity. As a result
If we go back five years there                                                    New regulations come in with
                                        have seen a growing number of
was trust in financial institutions.                                              the registration of OTC products
                                        collateral under management
Everyone was more or less happy                                                  and we decided we needed to
                                        and it has proved to us that our
with the facilities in place. There                                              position ourselves. Based on our
                                        decision to widen the number of
was growing volumes for tri-                                                     relations we decided to team up
                                        products was the right one.
party repo as well as bi-lateral                                                 with Bolsas y Mercados Españoles
agreements and significant growth in     “We are constantly improving             (BME) to create a trade repository,
uncollaterised transactions However,    the number of asset classes              REGIS-TR, that will collect and
this completely changed with the        eligible as collateral for our Global    administer details of all OTC
sub-prime crisis and the collapse       Liquidity Hub while at the same          transactions reported by users.
of Lehman. Triparty arrangements        time expanding the number
collapsed because of the lack of
trust between financial institutions,
while bilateral repos decreased                           Triparty arrangements
significantly and uncollaterised
transactions almost disappeared.                          collapsed because of
Our global liquidity hub was
impacted because of shrinking                             the lack of trust between
numbers on tri-party repo but
because of our integrated offering                        financial institutions”
we were able to compensate this
loss with GPC pooling, our electronic   of links towards infrastructure          It aims to comply with transparency
money market product. Euro GC           providers across the globe. Our          requirements of future EU
Pooling on Eurex Repo enables           global extension allows for a new        regulations, to give market
euro cash liquidity trading secured     level of collateral optimisation by      participants and regulators access
with one basket of ECB-eligible         leveraging a centralised collateral      to a consolidated global view of
securities while Eurex Clearing can     pool servicing, for example, global      OTC derivative positions. Clients
step in as a central counterparty and   margin calls in line with local market   will be able to access the data
ensure anonymous trading. GPC           requirements of products so they         via a web-based platform.
provides an efficient centralised risk   are stable in all weather conditions.

We are not limiting ourselves
to just interest rate swaps or                         The cooperation is another
forward rate agreements but are
encompassing a broader scope of                        milestone in our strategy
OTC derivatives, covering underlying
assets such as fixed income,
equities, currencies, commodities
                                                       to cover global exposure
and others. We are also not limiting
our client base and covering both
                                                       through a consolidated and
financial and non-financial firms.
                                                       optimised collateral pool.”
What about the agreement
with the Brazilian CETIP
(the Brazilian CSD which               This service will be offered on a     We offer collateral management
operates fixed income                   fully automated basis incorporating   services on a global scale and
securities and OTC                     auto-allocation, auto-substitutions   across multiple time zones. This is
derivatives in Latin America).         and optimisation of the underlying    another route for our customers to
                                       collateral. It will initially focus   collateralise their multiple exposures
CETIP been dealing with regulation
                                       on the collateralisation of OTC       on a streamlined basis by leveraging
for 20 years but there was no
                                       derivative exposures managed via      our growing Global Liquidity and
collateral management facility.
                                       CETIP but will then be extended       Risk Management Hub. The
It was still all done on paper.
                                       over time. We see this as the         cooperation is another milestone
This deal provides multi-time-
                                       blueprint for global solutions.       in our strategy to cover global
zone collateral management in-
                                                                             exposure through a consolidated
sourcing offering in real-time and     What about the                        and optimised collateral pool.
is in line with the observed trends    arrangement with Oslo?
towards a global consolidation of                                            In general, I think there is a
                                       Clearstream provides Oslo Clearing    new spirit of co-operation for
collateral management activities.
                                       with an integrated collateral         Infrastructures. They understand
The new service will provide
                                       management services for margining     that we need to work closer together
CETIP’s clients in their time zone
                                       incorporating auto allocation,        for the benefit of our clients.
with access to Clearstream’s
                                       optimisation and auto substitution.
collateral management services.


                                               REGIS-TR chief Thilo Derenbach talks about the
                                               Conception and present standing of the newly
                                               created OTC derivatives trade repository

Tell us about the                        participants need absolute                 who seem to be suggesting that
conception and present                   reassurances as to how their data          a global trade repository would be
standing of Regis-Tr                     is protected and who will receive          a good idea. We don’t agree with
                                         access to the data. They need to           that not only because we don’t
Regis-tr is a co-operation between
                                         know that their information is safe        think a global trade repository
Clearstream and Iberclear who are
                                         from access to any third party.            can be flexible enough or that
the two sole shareholders and was
                                         The question being raised with             competition in this area can increase
built by and is operated by Iberclear.
                                         regard to the US is about who              the value for the participant.
 What is required in a trade             will be allowed access to data.
                                                                                    A trade repository is not going to
repository is not just a web based
                                         Whats the difference                       add value to your business model
application where participants
                                         between your product                       so it’s a cost issue which will need
can upload their transactions but
                                         and others?                                to be offset with value added
because of the sensitive information
                                                                                    services which will only come if
concerning trading activity they need    We understand that ICAP with Tri-          there is competition. The other
someone that they can trust who          optima is providing a trade repository     issue is that I don’t see one global
will ensure that all such information    for interest rate swaps. It’s not          service provider evolving for many
is kept secure and protected. The
Regis tr infrastructure runs on the
exchange infrastructure of the
Spanish stock exchange. So all                            There’s got to be
the redundancies, mirroring of day
times and back applications and
security measures that you would
                                                          a level playing field
expect from a standard European
exchange infrastructure, you enjoy                        amongst providers.”
as being a participant of Regis tr.
Another advantage of working
with Iberclear is their geographical     entirely clear that they are specifically   product classes in the OTC world.
location - we understand that            promoting one global trade                 Just because there is no precedent
European and Asian participants          repository per product class but that      - the European Commission is
would prefer to have their data          would seem to favour their business        trying to break up monopolies and
stored outside of the US. Market         model. We have a very different view       it’s going to be difficult to align the
                                         from DTCC, Tri-optima or Swapwire          US view with the European view.

Also, if we went down that route        should be similar if not identical       It seems we are to be accepted
you would need one global               across the globe. It’s a global market   as providers for corporates as well
trade repository for all products,      and there should not be different        as financial institutions. Although
in which case there would be            requirements in the US than in           it’s still a Spanish customer base,
no value per product class and          Europe and Asia and possibly Africa      we are looking to expand to a
that’s not what we’re about.            once they set up such a structure.       solid European base including the
The new draft EMIR regulations
issued on 5th January, 2011 have
deleted reporting thresholds for
                                                        we are looking to expand
corporates which means that
all financial as well as corporate
institutions will now have to comply
                                                        to a solid European base
and report on all their transactions.
So we’re taking the approach that                       including the UK.”
if everyone has to comply with
transactions, we want to provide        What’s being done to ensure              UK. Organisations need to take
a service that is flexible enough
                                        regulation in US and Europe              decisions in the first half of 2011
to catch all of that at a price that
                                        is complementary and what                because, even though legislation
is adequate to the size and the
                                        would the consequences                   in Europe is going to kick in at the
activity profile of the participant on
                                        be if they weren’t?                      end of 2012, as we know projects
a global scale. However, we are
                                        Differences always come at a cost        take some time. We’re on the
European so we’ll start in Europe
                                        so if you have to set up different       road educating people about the
because it’s imminent that we
                                        structures to serve all different        developments of the regulation.
have to respond to requirements
under European legislation but          types of participants whether it’s       So for us 2011 is obviously a very
fortunately most of the participants    European or global. All structures       important and interesting year when
are set up on a global scale.           must be flexible yet comply with          we will develop the majority of our
                                        the respective requirements and          services. We can’t do everything in
Should there be a global                that’s always going to come at an        one year but the important things
set of standards for                    additional development cost and          will be developed in the course of
clearing houses?                        thus a cost to the participant.          this year - collateral management
Yes. There’s got to be a level                                                   and exposure services as well. We
                                        What’s the Timeframe?                    will expand the product coverage
playing field amongst providers. The
requirements to operate a trade         The company was founded on               to cover the full product range by
repository should be the same           9th December 2010 so it’s up             the end of 2011. We will develop
whether you are a German domestic,      and running and already providing        the trade repository service base
European or non-European trade          interest rate swaps trade reporting      and of course hope to develop
repository applying for admission       services to pilot customers.             a good customer base.
with ESMA (European Securities and      We have four pilots, BBVA, Banco
Markets Authority). The requirements    Sabadell, Telefonica and Iberia


                                                          WITH NEW

                                                          Philip Brown, Member of the Executive
                                                          Board and Head of Client Relations Europe
                                                          & Americas, Clearstream Banking.

Can you tell us your                    variation margin and often corporates     OTC derivatives but against your
thoughts on the Trade                   don’t post initial margin because a       repo activity, central bank finance,
repository REGIS-TR                     lot of banks are willing to give them     and CCP activity. This centralisation
product for OTC                         effectively a collateral free credit      both helps reduced overheads
derivatives?                            exposure in order to get their flow.       and minimises collateral utilisation.
                                                                                  Corporates don’t want to have their
I know you have talked to Thilo         The repository and collateral story
                                                                                  assets tied up any more than the
Derenbach about Regis- TR and           becomes very interesting because
                                                                                  banks and it is our view, and we’re
Stefan Lepp about the financing          none of these organisations have
                                                                                  willing to be challenged on it, that
side and what I find interesting is      any credibility to manage collateral.
the confluence of the trade collateral   The attraction of Stefan’s liquidity      of the three real players in the trade

                 The whole T2S argument is about lowering
                 the cost of cross border settlement but in the
                 ICSD and the bond world it already exists.”
management capability and trade
registry. This is because come          risk management hub is that it is         repository business in Europe -
next year corporates will have to       a centralised collateral location         DTCC, Tri-optima (the ICAP product)
collateralise 100% of their OTC         whereby you can provide collateral        and our product, Regis-TR, ours is
exposure. What happens today is         management across multiple                the only product that’s proactively
that you have an initial as well as a   obligations. It’s not just against your   targeting the corporate sector.

Can you explain about                     and this is where we come in.             market to operate in because you’re
pilot programmes?                         We partnered with them to jointly         running omnibus accounts but
                                          develop, promote and distribute           regulators want to see disclosed
Right at the end of 2010 we formed
                                          tri-party collateral management           positions. It’s taken us quite some
a company and launched a pilot
                                          services. This has been good news         time to figure out with our local agent
phase with Telfonica, Iberia, BBVA
                                          for us as we go into the Regis-tr         down how we resolve that issue. We
and Banca Sabadell who have
                                          with BME because have a model             work with local partners in Brazil
subsequently become our first
                                          we can leverage for the Spanish.          – not all connected to Cetip - but
clients. I think that’s a good mix
                                                                                    part of the overall Latin strategy.
in that we have a global telecoms         What are the challenges?
firm, airline company and Spanish
                                          We have been grappling with the
                                                                                    How does that compare
regional bank with an international                                                 with the rest of your
                                          challenges of the Brazilian market
footprint. Currently, we have a                                                     global strategy?
                                          from a custody point of view for
pipeline of mainly German clients
                                          quite some time. Although an ICSD         If you talk about our cross border
and we are also talking to global
                                          may look like a global custodian,         European business we are preparing
custodians because we recognise
                                          we have 50 markets and clients            a T2S type model. We have
that we can’t distribute the
                                          and users in all 50 markets. Our          Clearstream Frankfurt as our CSD
service to everybody. We want
                                          architecture is built to create           connecting directly to other CSD’s
to provide the facility to allow
                                          internalisation of settlement soif        in Europe and holding account of
clients to repackage our services
                                          you’re a Clearstream client and           other CSDs. We are going directly to
and provide it on a white label
                                          trading with a Clearstream client for     domestic, almost sovereign CSD’s.
disclosure basis to their end clients.
                                          an Italian bond, for example, then        They’re not government owned
Can you expand upon your                  that bond never moves in the Italian      but part of the local infrastructure.
activities in Brazil and the              market. It sits in the Italian market     We’re increasingly moving towards
links you have with Cetip.                and the settlement takes place            what we call an account operator
                                          inside Clearstream. The benefits           model – we will maintain our own
Brazil is a very interesting market for
                                          are same day settlement which is          account with the local CSD and then
us and we have a strong partnership
                                          much more cost effective compared         hire a partner bank in the market to
with Cetip (operator of the leading
                                          to going into a domestic market.          operate the account on our behalf.
marketplace for fixed income and
                                                                                    It means that our safekeeping chain
OTC derivatives in Latin America)         The whole T2S argument is about
                                                                                    is in the infrastructure all the way
                                                                                    through. We don’t have to mediate
                                                                                    with a commercial bank. That
                 We’re increasingly moving                                          CSD/ ICSD chain is very attractive
                                                                                    especially to more risk averse
                                                                                    clients because they know exactly
                 towards what we call an                                            what is on the balance sheet.
                                                                                    That also has some more structural
                 account operator model”                                            advantages because of the way
                                                                                    the euro system works. For
                                                                                    instance if Clearstream Frankfurt
                                                                                    holds an account in Euroclear
which we have strengthened over           lowering the cost of cross border         France and we have that account
the past 12 months. One of Cetip’s        settlement but in the ICSD and the        assessed, it’s called assessment
advantages is the strong regulatory       bond world it already exists. They        by the Eurosystem. In doing so
environment in which it operates          have already created what looks and       we get special treatment in the
in. At the time of the crisis in 2008     feels like a T2S environment, with        way that accounts handled by
it was one of the few markets in          an internal settlement environment        the Eurosystem. It means we
the world where the regulator and         already existing between us and           can use collateral in a multiple
the Central Banks could instantly         Euroclear. In order to effect that kind   locations without physically
see what was owed to everyone             of internalisation you run omnibus        moving it against ECP funding.
else in OTC derivatives. However,         accounts for domestic markets.
what wasn’t existent in the market        Brazil has a disclosure framework
was an automated collateralisation        where individual beneficial owner’s
capability. They had the registration     holdings have to be disclosed. For
capability but no collateral service      an ICSD it’s quite a challenging


Lessons from an                             were unable to see with regard
                                            to OTC transaction was clearly
                                                                                        whereby CETIP calculates the
                                                                                        exposure and Clearstream develops
emerging market                             visible in the Brazilian market.
                                            The Brazilian regulator received
                                                                                        the collateral management system.
                                                                                        After we received support from the
                                            a file everyday from Cetip which
                                                                                        market and the regulator we set
                                            identified all the open positions
                                                                                        up teams in both Luxembourg and
                                            of all OTC derivatives and where
                                                                                        Sao Paolo. The system is expected
                                            the problems in the market were.
                                                                                        to go live by mid-June. In the first
                                            Consequently we did not suffer too
                                                                                        phase of the project the Brazilian
                                            much in Brazil from the crisis except
                                                                                        participants will use domestic assets
                                            with relations to those transactions
                                                                                        as collateral while the second phase,
                                            that were registered abroad.
                                                                                        which needs to be discussed with the
                                            Although we had a good solution             regulator, will introduce the conditions
                                            we also looked to see how we                for the Brazilian participants
                                            could improve the model further.            to use International assets as
                                            To that end, we implemented a               collateral also. At that moment
                                            solution developed by Algorithmics,         they are held by Clearstream.
Wagner Anacleto,                            a Canadian company, which
                                                                                        Since the product is not restricted for
Operations Director, CETIP                  calculates the exposure for OTC
                                                                                        use only for OTC derivatives, we see
                                            transactions .We are currently
There has been a regime of                                                              many opportunities to introduce new
                                            sending participants, on a daily
compulsory registration of all OTC                                                      types of businesses in CETIP such
                                            basis, market to market exposure
derivatives transactions in Brazil                                                      as repos and securities lending. We
                                            for almost 90% of total transactions
since 1994 so when the financial                                                         hope this will create a more liquid
                                            registered at CETIP. We also struck
crisis hit a couple of years ago what                                                   market for fixed income instruments.
                                            a partnership with Clearsteam,
regulators in the US and Europe

The Spanish                                 give security to the OTC derivatives
                                            market was through transparency.
                                                                                        end of the year. The aim is to
                                                                                        have the full product coverage

                                            We started to work with a group             by the second quarter 2012.
                                            of financial and corporate entities
                                                                                        Although Regis-TR is our reaction to
                                            in the Spanish market in order
                                                                                        the financial crisis, we are obviously
                                            to design the structure of the
                                                                                        following very clearly and closely the
                                            trade repository application that
                                                                                        new regulation that the European
                                            we are offering right now.
                                                                                        regulators are trying to impose on
                                            From the outset it was clear that this      the financial markets and specifically
                                            was an international project so we          for the post-trade services that we
                                            started the search for an international     are in. We are also involved in a
                                            partner and it soon became obvious          project called LINK UP markets –
                                            that Clearstream would be the perfect       which aims to facilitate cross border
                                            partner for us. We launched Regis-          settlement and custody for our
                                            TR in December last year with the           participants. I think there is clear
                                            registration of interest rate derivatives   demand from participants in the
                                            contracts. There is still a long way        market and from European regulators
Jesus Benito – Iberclear                    ahead as we want to become a fully          that cross border settlements should
                                            global repository service provider          be improved and so we created this
The Regis-TR project originated             giving a one stop solution to all           partnership venture located in Madrid
in BME about two years ago as a             participants to be able to register         for the sake of our participants.
response to the collapse of Lehman          all their OTC derivatives contracts.
                                                                                        We are also working on a related
Brothers and the subsequent
                                            We’re planning a step by step               project - Target2 securities, and last
financial crisis. It therefore anticipated
                                            implementation and hope to have             but not least in response to the
the US and European regulations
                                            FX derivatives contracts by this            growing demand for harmonisation
that are currently under discussion.
                                            summer, followed by equity and              in Europe we are reforming the
We thought that the best way to
                                            commodity derivatives by the                Spanish equities settlement system .


                                         OF THE GAME
                                         Kavitha Ramachandran, Head of Client Relations,
                                         Maitland (Luxembourg) looks at the evolving
                                         role of the hedge fund administrator.

                                         • Have an adequate liquidity             Independent administration
The $50 bn Madoff scandal following
                                         management system                        on the rise
closely on the heels of the 2008
financial crisis placed hedge funds       • Report on a systematic basis           Emerging general practice guidance
under the spotlight with the focus on    to the relevant authorities              given by the Hedge Funds Standards
regulation, independence, conflicts                                                Board also stipulates the need for
                                         • Prepare and distribute
of interest and governance. The                                                   hedge funds to have processes
                                         fund prospectuses
result has been increased regulation                                              for fund administration, valuation,
with the alternative investment          •   Publish annual reports.              custody and brokerage that are
funds management (AIFM) directive                                                 completely separate from the fund
                                         All of the above serve to improve the
being debated for most of 2009                                                    manager - something that was
                                         level of investor protection. Indeed
and 2010 and finally coming into                                                   clearly missing in the Madoff case.
                                         it is all about investor protection
force towards the end of last year.
                                         now and this has led to several          The importance of having the
In addition to regulation, supervision
                                         distinct trends in the hedge fund        custody, fund administration,
and EU passporting requirements,
                                         environment. For example, whereas        valuation and reporting to
the directive lays clear emphasis on
                                         historically the decision to outsource   investors separate cannot be
increasing transparency to investors.
                                         the back office was largely driven by     over-emphasised. Not only does

                Increased hedge fund regulation is a
                reality, bringing both opportunities and
                challenges for hedge fund administrators.”
Under the directive, hedge funds         internal business strategy (and many     it reduce operational risk, but
are now required inter alia to:          of these considerations remain highly    the fund manager can focus on
                                         relevant) there has been a dramatic      its main business of investment
• Have adequate resources,
                                         shift to the decision being informed     management by outsourcing
both technical and human, as
                                         by the requirements of external          these functions to independent
well as sound administration
                                         stakeholders. Increasingly, the          administrators. Further, there is a
and accounting procedures
                                         appropriate and effective segregation    move away from custodian-owned
• Implement procedures to ensure         of duties is a fundamental and non-      administration solutions although
proper and independent valuation         negotiable requirement of investors      hybrid models still provide arm’s
                                         and, whereas size and reputation         length operating independence
• Identify and manage
                                         were sometimes grounds for               combined with the financial backing
conflict of interest
                                         exemption, even this is changing.        of large financial institutions.

The process of choosing a               money laundering checks. The right       This convergence means that it is
fund administrator is no longer         technology and systems are key, and      important for the fund administrator
a simple tick-the-box exercise          spreadsheets are fast disappearing.      to be able to cater for high volumes
based on brand and fees. The                                                     at lower costs to remain competitive
due diligence process is exacting       The impact of convergence                without compromising on service.
with several criteria requiring         The retailisation of hedge funds         And so increasingly the administrator
close consideration, such as:           commenced a few years ago                is a crucial factor in the fund
• The business model                    and funds have gained increased          selection process. Fund performance
of the administrator                    transparency under the UCITS brand       and manager selection alone do
                                        which provides guidance under the        not drive the process as investors
• The operating model and               eligible assets directive for the use    now have stringent due diligence
efficiency of the administrator          of financial derivatives and other        requirements which include
• Best practices followed               alternatives. The risk tolerance of      scrutinising the administrator.
by the administrator                    investors has radically changed
                                        with investors looking for absolute      Increased hedge fund regulation is
• Independent valuation and             return as well as diversified and         a reality, bringing both opportunities
pricing polices and procedures
• Keeping track of investments
and where they are held                                    The importance of
• Technology, level of automation
and speed to deliver                                       having the custody, fund
• Appropriate controls
and audit (e.g. SAS 70)                                    administration, valuation
• Quality of the personnel, their
understanding of hedge fund                                and reporting to investors
strategies and communication
with the fund manager                                      separately cannot be
• Experience in fee
calculations i.e. performance                              over-emphasised.
fees, HWM, equalisation etc.
• Knowledge of fund jurisdictions,
                                        lower correlation strategies but their   and challenges for hedge fund
regulatory requirements,
                                        willingness and ability to source from   administrators. Administrators need
accounting standards and GAAP
                                        traditional hedge funds and funds        to review their business model
•   Communication with investors        of funds is diminishing. Surveys         on an ongoing basis, ensuring
                                        indicate that liquidity, a strong        that it supports the brand of the
•   Reporting capabilities
                                        regulatory framework, transparency       fund, that of the fund manager as
• Ability to deal with the              and the strong UCITS brand allow         well as its own. Only in this way
regulator and relationship with         hedge fund strategies within the         will they be able to stay ahead of
different service providers             UCITS framework. Of course               the game in achieving the goals
                                        this trend is continuing to push         of independence, transparency
•   Problem-solving capabilities
                                        convergence between hedge funds          and investor confidence.
•   Governance                          and traditional regulated products.
• Appropriate charges for
the services provided.
The above list shows that with the
hedge fund world rapidly changing
and evolving over the past two
years, no longer are administrators
just responsible for calculating NAV.
They are now required to provide
a host of value-added services
which include assisting in the fund
set-up, payments, transfer agency
and investor related services,
annual audit, regulatory reporting,
corporate governance, monitoring
investment restrictions and anti


                                           GLOBAL CUSTODIANS IS MUCH
                                           MORE THAN JUST CUSTODY
                                           By Tony Child

In the investment world a great            it was difficult to live up to those       control and what they would like
deal of attention is paid to the           promises. The reality was investors       to see included in the analysis.
performance of the underlying              and fund managers never really
                                                                                     Not only were our clients looking for
managers. Are they beating their           knew what level of service they were
                                                                                     strong operational performance from
benchmark after taking in to account       getting because they had nothing to
                                                                                     the mainstream essential custody
their often significant fees? What          compare it to. Companies such as
                                                                                     operations such as settlement,
is often overlooked however, is the        Amaces grew out of this need and
                                                                                     income, tax, voting and accounting,
operational performance of the             filled a space not really occupied by
                                                                                     but they also wanted to understand
custodian who also maybe providing         the traditional investment consultants.
                                                                                     if they were getting decent interest
fund accounting, investment                It was not all plain sailing for Amaces   and foreign exchange rates. In
operations or is a substantial foreign     or the other benchmarking firms.           addition, they were interested
exchange counterparty. Such a close        The key was to get enough interest        in the level of returns on stock
operational partnership normally           from the pensions and investment          lending as compared to their
runs far longer than the relationship      world and to convince the custodians      peer groups within the industry.
with a fund manager. Should senior         that the aim was to improve service,
operations staff or trustees pay more      create greater transparency and           Developing the
attention to the activities of what goes   to retain clients. We were lucky in       product range
on once a decision has been made           the early days in getting sufficient       In the fund management world the
by a fund manager to buy or to sell?       backing from some very large              custodians continued to develop their
Not paying close attention to what         money managers, and advising their        product set to cover the evolving
goes on in the custodian’s operation,      custodians that this was something        product lines. For example, the
can be a painful experience.               they wanted to do. Once we had            exponential growth in mutual funds
This specialist benchmarking sector        sufficient data from a number of           triggered an increase in demand
evolved about 20 years ago when            sources then pulling it together in a     for third party administration but
many pension schemes and fund              user friendly way was the next crucial    appointing a provider required a
managers went out to tender every          step. By piloting the initial custody     considerable leap of faith. Asset
three to five years. At that time it        and treasury benchmarking module          managers were concerned that
was usually to obtain better pricing       together with these large investment      providers would not fulfil their
coupled with many promises                 managers we were able to quickly          promises made through a RFP
on service levels from the newly           understand what was important to          (request for proposal) process.
appointed custodian. Invariably            them in terms of monitoring and

                 What is often overlooked is the operational
                 performance of the custodian who
                 also maybe providing fund accounting,
                 investment operations or is a substantial
                 foreign exchange counterparty.
We now have mutual fund clients
domiciled in the UK, Luxembourg                               In the fund management
and Dublin and saw an opportunity
to monitor closely the fund                                   world the custodians
accountant’s operational service
levels. The key area of focus have
been to provide data on net asset
                                                              continued to develop their
value production and accuracy,
errors resolution and cost. The
                                                              product set to cover the
main questions asked revolve
around whether the service provider
                                                              evolving product lines.
delivered the latest pricing on time
as well as reconciliation issues.          ensure integrity of data. By studying   One of the main concerns though
                                           the trend analysis over weeks and       was their inability to benchmark
Foreign Exchange                           months we can build a picture of        the service they received. We
One of the other big trends in             all trading activity when compared      have developed a set of strategic
the industry has been the growth           to rates in the market. In addition     KPIs (key performance indicators)
of foreign exchange trade order            we provide an exception report          from discussions with the fund
flow and investment operations.             of trades that fall outside the high    management community, custodians
Amaces first started benchmarking           of the day. The monthly analysis        as well as our own pilot group.
foreign exchange trading activity          allows comparisons to be made           Although the KPIs may change
for investment managers and larger         and quantifies the financial effect on    before the launch ou main focus
pension schemes with the small             the fund of the FX rates received.      is on trade confirmation and
trades – up to the equivalent of           Clients can immediately spot where      matching for bonds, equities, and
a couple of hundred thousand               margins have started to increase and    other instruments including OTC
US dollars. This covered off               after a quick word from them or us,     derivatives; corporate actions and
income repatriation and residual           banks will normally ensure rates are    cash and stock reconciliations.
currency balances. The spotlight           brought back to reasonable levels.      We are also looking closely at the
though turned to the larger trades                                                 timely delivery of various reports
after California Attorney General
                                           Investment Operations                   which have strict deadlines.
Edmund Brown had decided to sue            Looking ahead, we believe the next
State Street last year for allegedly       stage in benchmarking securities
                                                                                   One important aspect
overcharging two public sector             services should be investment
                                                                                   I have not mentioned,
pension schemes on foreign currency        operations. We are currently piloting
                                                                                   which should not be
trades. Investors have increased their     a scheme with a number of existing
                                                                                   forgotten is that a firm
scrutiny and are demanding greater         fund manager clients which we           such as Amaces is also
transparency into these activities and     hope to roll out later this year.       capable of generating
their contribution to the bottom line.                                             significant cost reductions
                                           Outsourcing investment operations       for the scheme or fund.
As a result, investors are looking         can be a complicated exercise.          Benchmarking and
for an independent method of               It often involves transferring          renegotiating fee levels
reviewing foreign exchange trades, In      staff by means of a ‘lift out’ and      or by obtaining improved
response we developed the foreign          running processes on legacy fund        terms from less transparent
exchange module which provided a           management systems before               services such as foreign
detailed analysis of all trades from all   transitioning the business on to the    exchange, interest
counterparties by size and by type         custodian’s own in-house system.        conditions and securities
– major, minor and exotics. Whilst         Once a strategic partner has been       lending all aid performance.
fund managers can benchmark                selected through a lengthy and
all their counterparties, pension          detailed RFP process the last thing     We believe it is our job to keep pace
schemes can see trades at the              either party would wish is to see       with the custodians whose aim is to
custodian and fund manager level.          the partnership fail. We have seen      further penetrate the large investment
                                           some high profile examples in the        management companies. As they
A comprehensive reporting package                                                  start to roll out their latest outsourcing
                                           UK of failed transacations but that
plots each currency trade against                                                  solution, operational benchmarking
                                           has not deterred an increasing
the mean and the high and low                                                      companies such as Amaces will be
                                           number of large fund management
for the day for a particular cross                                                 keeping a close eye on developments
                                           organisations from contemplating
currency. We take feeds from several                                               in order to develop products that
                                           this very strategic step.
independent market sources to                                                      provide greater transparency .


Standardisation and                       board. It is imperative that they be       call on high quality, experienced
automation is only one                    much better prepared to deal with          staff will reap the benefits of their
part of the equation.                     the anticipated volumes in a manner        investment. There is no substitute or
                                          which will instil investor confidence.      “software solution” when it comes
By Kevin Maxwell                                                                     to the practical knowledge that
                                          Whilst industry efforts to standardise
                                                                                     experienced staff will have built up
Corporate actions announcements           messaging is on-going , the
                                                                                     when dealing with risk mitigation.
are rarely straightforward. Whether       very nature of the more complex
                                                                                     Organisations are increasingly
they involve a bond redemption,           Corporate Action demands that
                                                                                     investing their time and money in
entitlement issues, an exercise of        as much attention be paid to
                                                                                     their employees – training them
warrants or variation thereof, the        ensuring that companies manage
                                                                                     and teaching them to remain at the
steps that are followed between           the operational risk associated
                                                                                     cutting edge of corporate actions.
the issuer (either directly or through    with communicating these actions.
an intermediary) to the investor          However, it is well worth pointing         And many organisations are taking
can result in specific details being       out that the efforts to ensure             a good, hard look at themselves
missed or left out, data dropped and      “standardisation of message” is            when looking to more effectively
investor decisions being delayed.         only addressing one element of the         deal with the increased complexity
                                          equation and should not be looked          of corporate actions. The manner in
The challenges of dealing efficiently
                                          at as being the ”be all and end all”       which they have previously handled
with these increasingly complex
                                          of how to deal with this issue of          the process of reporting corporate
actions is now, more than ever
                                          risk mitigation. Companies need to         actions is well worth examining. A
before, paramount in the minds of
                                          effectively harness the technology         wise man once said that “…those
those involved in the industry. They
                                          and the content of the experts,            who fail to learn history are doomed
face increased pressure to mitigate
                                          which would, in turn, provide them         to repeat it…” and never was this
the risk of processing complex
                                          with the ability to interpret, decipher,   more apropos than with corporate
corporate actions. Firms must
                                          and communicate the information            actions. However, this doesn’t
remain competitive and to do this
                                          across all interested parties in a         mean that every step of the process
they must constantly be enhancing
                                          much more highly effective manner.         must be automated. In fact, given
their own system capabilities.
                                                                                     the increasingly complex nature of
Custodians are being inundated with       The Holistic approach                      some of the actions, it is probably
information and are under constant
                                          What is very clear is that it has          impossible. It is, however, a simple
pressure to decipher it quickly and
                                          never been more urgent for                 enough plan to ensure that you
accurately. Firms are continuously
                                          organisations to ensure that they          have robust systems fed by reliable
searching for an innovative solution
                                          have all the elements for effective        data feeds that are monitored by
that is as close to STP as possible.
                                          and accurate corporate actions             experienced staff. One size clearly
The reality of corporate actions is
                                          communication in place – and this          does not fit all and the companies
that this will never really be possible
                                          starts and ends with the people            who cater to that will ultimately
and this, in part, is what drives them
                                          they employ. Companies that can            reap the benefits of their actions.
to take these advanced measures on


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