Got The Message?: Competition To SWIFT Is Hotting Up
Got The Message?: Competition To SWIFT Is Hotting Up
Got The Message?: Competition To SWIFT Is Hotting Up
Volume 6 No. 43
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P.08 Executive Profile P.19 Analyse This: China P.20 German Custody P.22 Panel Debate
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
P.04 News
Editor’s letter
interviews with top delegates. however, still pending in the
On the up The mood at the event was credit rating sector. After a
altogether buoyant, with so significant degree of flak from
Major changes continue many firms in both banking the media and the market
to impact the international and technology eager to build during the financial crisis, this
financial system, and very their contact lists and explore ubiquitous investor service
much for the better. After the the opportunities that Asia is will look to begin a clean slate
Features editor: blood transfusion that central increasingly presenting. from 2010. Some of the rating
Ben Roberts banks had been providing their
ben.roberts@2i.tv This issue of ISJ, the agencies seem to have pre-
countries through quantitative penultimate for 2009, is also empted some of the regulatory
senior correspondent: easing – treasury bonds for cash looking to embrace change, crackdown with structural
Craig McGlashan
craig.mcglashan@2i.tv – market liquidity and capital growth and new options in changes to avoid the accusation
is growing. The global stock investor services. Over the last of ‘business as usual’.
Reporter:
Kimberley Ferguson
markets continue an overall rise, few weeks, Craig McGlashan Risk management - as ISJ
kimberley.ferguson@2i.tv and despite concerns that this is has kept his ear to the ground readers will know - is a subject
a shallow indicator for economic regarding the future of to which we keep returning. This
Contributing editor:
anthony harrington resurgence, institutions seem messaging services. SWIFT, still issue we quiz a panel of experts
to be able now to look and plan the dominant player, may face in different areas of the financial
account manager:
Cicely lewis that little bit further ahead. increasingly strong opposition industry who nevertheless gave
cicely.lewis@2i.tv This point is partly testified in the field of investor us fascinating insight. n
by the amount of requests Risky
for business? communication. Ben Roberts
senior account manager:
Patricia De la Grange proposals that have appeared Poland seems to be heading
trish.delagrange@2i.tv over the last month or so, with towards a bigger, Securities lending program parameter adjustments
Business development manager: custodians polishing theirInterestingly, for respondents
brighter future
that did make as Program parameter adjustments: The inherent flexibility in many securities
James olweny service pitch in the face ofparameter changes,the SOURCE: RBC Dexia Investor Services
james.olweny@2i.tv
markets ‘come
including those that
suspended participation, they tended to make
lending programs is intended to be used to
the advantage of beneficial owners. And while
institutional investors seeking a back’
multiple changes – ones after putting
that reflected their
STATS-SNAP: The
securities lending is generally a conservative
web producer: new home for their assets. SGSS
focus
in place a number of
on managing risk. graph illustrates
product from a risk perspective, there are real
Peter ainsworth the risks
fivewhich
main must be understood and closely
peter.ainsworth@2i.tv
in particular has enjoyedThe anmost common adjustment
legislative was in changes.
relation managed. These risks, and their mitigants,
astonishing run, and its reported Latin cited
to borrowing counterparties, America,
by 38% of too, changes being
should form an integral part of a beneficial
operations manager: seven mandate wins in Italy this
those that made program changes, followed by made to securities
owner’s securities lending policies and
nicolette whittaker continues
adjustments to the type to see
of collateral accepted. procedures and be actively monitored.
year seems to have fully paid lending programs.
nicolette.whittaker@2i.tv astonishing
Considering the exceptional market turmoilgrowth
off its outlay for Unicredit’s
that ensued following the collapse of Lehman Lenders are
Brothers, this was anin its fund sectors
Managing director:
securities services business three
entirely rational reaction.
predominantly
Type of collateral accepted
rather than
The Sibos conference last presenting numerous
Chairman: stopping the
Mark latham month was another fruitful trip opportunities
mark.latham@2i.tv programs,
for companies and journalists for international according to a
2i uK 16-17 Little Portland Street, alike, and ISJ.tv is proud to custodians. survey.
London W1W 8BP, UK present a number of video Changes are,
T: +44 (0) 20 7299 7700
F: +44 (0) 20 7636 6044
2i usa 410 Park Avenue, 15th Floor Securities lending survey results | Latest mandates
RBC Dexia Investor Services 6
Contents Letters
regulatory bodies. Unfortunately,
Dear ISJ a move to rationalise SEPA and
competition and innovation in EBICS to seems to be a long way
In this issue off.
the messaging market.
Most of the taxpayer SEPA is not just about the
support of firms returning to Eurozone, it affects businesses
Regulation
COVER STORY ‘business as usual’ remains in globally that deal in this currency
COVER STORY
12 Poland - Legislation place, which includes liability zone.
- Poland has Westernised its guarantees, access to central The implementation cycle
regulatory framework for short bank facilities, money market perceived by the regulators,
selling. mutual fund backstops, etc. so primarily the ECB, was that
that the playing field remains the banks would communicate
highly subsidised and distorted. detailed SEPA process changes
14 Credit ratings The real question is how things to their customer base –
- Reform will go once these supports are particularly the corporates – but
Ben Roberts rounds up the stripped-away and how the it has been no surprise that the
changes in the credit rating taxpayers will be compensated banks have not exactly rushed
sector and the growing use of the for shouldering these massive to do so.
CDS market as an indicator of a guarantees. There was no other organised
firm’s financial health. In many countries they are form of communication out to
very angry, and have good the commercial economies of
Custody
reasons to be, especially when Europe, so it is probably true to
Got the message? financial firms return to say that for a long time many
Technology, page 10 16 Latin America - Market “business as usual” and the next corporations believed that SEPA
growth Anthony Harrington big crisis may be only a few years was another ‘banking thing’ that
finds that regulatory changes and did not affect them, and perhaps
down the road. The reputation
booming markets are creating
People of the industry is at an all-time a good number of commercial
many opportunities for custody
low, for good reasons. organisations still believe this!
02 Letters business.
There is a short-term risk for
Professor Ingo Walter, commercial consumers who
04 News The last month of updates 19 ECB is lending help - SimCorp StrategyLab n persist in trading through the
in custody, clearing, securities Securities lending The older, very-costly-to-maintain
lending, legal, regulation, prume ECB paper is a vital reminder of payments instruments.
brokerage and technology. the benefits of securities lending. In particular, cash
Dear ISJ transactions and cheque
transactions are already being
06 News analysis - Custody Analyse This - China penalised in many countries,
concern of EU rule draft Guest comment about the growth
SEPA was originally and will be hit very hard in the
Plus, reader reaction to the Sibos of sub-custody in the world’s
devised by regulators, near future – only partly to cover
conference. most populous country. primarily for the benefit of the bank processing costs – the
financial services consumers in greater objective will be to price
People
22 Meeting client needs in the Eurozone. However, banks them out of the market and kill
08 Meeting the challenges Germany - Depot banks have had to bear the burden of them off.
the associated implementation The costs of SEPA
- Executive Profile The choice between a bundled
Laura Pollard and Deborah and tailoredcustody service is costs, actually incurring implementation have yet to be
Culhane of Fidelity a vital decision for instituional transaction business losses in covered. Possibilities include new
ActionsXchange chat to Craig so doing. Therefore, it is no big tariffs, affecting both private and
investors.
McGlashan. surprise that they postpone commercial consumers, for both
investment of resources on national and international credit
Technology 24 ISJ Panel - Risk associated initiatives for as long transfers and direct debits.
management Three as they can – with much of the
10 Got the message? - The well-placed sages answer ISJ’s market becoming compliant Richard Spong, Financial
SWIFT alternatives - questions. only shortly before the phase Services Industry Marketing
Craig McGlashan investigates the end-dates, mandated by Manager, Sterling Commerce,
legislation. EMEA n
25 Directory of services The countries already bound
The company listing.
to EBICS are resisting the SEPA
to renew your subscription priority for the moment, as To express your views, write to
please telephone: they have existing compliance ben.roberts@2i.tv or write a blog at
MEMBER - periodical +44 (0)20 7299 7700 www.ISJ.tv
publishers association or visit... WWW.ISJ.tv
commitments to their national
2 Me
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reader reaction
to appoint an EU-domiciled alternative investment industry,
custody provider. as well as Jean-René Giraud,
The Compliance Exchange, director of development,
an online news and ideas from the French business
exchange forum for risk and school, EDHEC’s Risk & Asset all at Sibos.
This year’s Sibos conference
compliance professionals Management Research Centre. “For a Sibos taking place in
retained its importance in
(http://compliancex.typepad. In Giraud’s view: “Because Asia, it lived up to expectations.
the diaries of many movers
com) points out that US the regulator (any regulator) is I didn’t see much difference in
and shakers, despite previous
custodians, such as BNY rarely able to prevent all risks attendance to the Sibos that
concerns of a decline in
Mellon, JP Morgan, and State through systematic control of took place in Sydney.
numbers.
Street Corp, as well as non-EU industry practices, it seems that “We were in China, and
Peter Sandhu, CEO of
players such as UBS and AG, a structure whereby control is China is of course a very
Synergy Financial Systems
may not qualify. mutually organised throughout important subject. So there
(attended), told ISJ: “Sibos
The Compliance Exchange the industry is (a better way to were a lot of questions and
for us is more a networking
quotes Sheenah Gordon- go).” discussions on Asia and
event than anything else. It’s
Hart, the London-based In particular he advocates China and how the various
part of being the community
head of regulatory strategy reinforcing the responsibility organisations were positioning
– everybody’s there so it makes
for JPMorgan Worldwide of the administrator/custodian themselves in that particular
it really easy to talk to SWIFT
Securities Services in Europe, insofar as pricing the financial market.”
and partners.
the Middle East and Africa, instruments of the fund is Deborah Culhane and
“This year’s Sibos was a little
as saying: “Everybody in the concerned, and also called for Laura Pollard from Fidelity
bit quiet. It certainly wasn’t as
industry is taking this very increased transparency on the ActionsXchange, who did not
good as last year. But I think
seriously. While it is not nature of the risks incurred attend, said it was still on their
it will be busier in Amsterdam
necessarily life-threatening, by underlying investments radar for future years despite
next year.”
we all need the criteria to be – including liquidity risk, so other commitments this year.
Sébastien Danloy, global
workable, cost-effective and that investors understand in Goran Fors, global head of
head of sales and relationship
principled — not one that advance what the liquidity custody at SEB, said: “It was a
management at Societe
shoots from the hip.” parameters of the fund are, great turnout, I was positively
Generale Securities Services,
The Directive argues that particularly in a funds of surprised. There was also a
said: “This year’s event was
since the risks associated with funds situation with illiquid good presence among the
well attended by senior people
alternative investment funds underlying funds. people who did come, from a
– maybe fewer junior people
lie at the manager level, it does Custodians have been used high standard of institutions.
attended but as far as meeting
not really matter where the more frequently by hedge In general, the atmosphere was
the people who count in our
fund is domiciled as far as the funds in order to segregate
industry, they were definitely great.” n
objectives of the Directive is certain assets from their prime
© 2009 Euroclear SA/NV, 1 Boulevard du Roi Albert II, 1210 Brussels, Belgium, RPM Brussels number 0423 747 369
ING Wholesale Banking is a marketing name of ING Bank N.V. ING Bank N.V. is registered by the Authority for the Financial Markets. Copyright ING Wholesale Banking (2009).
“Trying to create
a global financial
It may surprise some that Paul the opportunities afforded by the internet
services messaging
Reuter, the founder of Reuters press
agency, used carrier pidgeons as recently
revolution.
A quick search of SWIFT’s online
standard is like
as the 19th century to transport news
and stock prices. Police departments in
history for the word “internet” turns up
no results. That is not to say that the firm
trying to boil the
the Orissa state of India only replaced does not offer any services like support or
downloads over the internet, but in the
ocean”
the birds for the internet for emergency
communications as recently as 2002. words of ex-SWIFT employee Graham
Bright, managing director at Financial
Hugh Cumberland,
SWIFT, the global financial messaging
network, has enjoyed similar domination Tradeware, SWIFT thinks of the internet
BT
over thius area of financial communication “more as a threat than an opportunity”.
in the last few decades, but could the In particular, common delivery of ASP
internet also make SWIFT go the way of a web-based internet services should be
cousin of the pigeon - the dodo? making SWIFT question its fundamental
pricing models, he believes. calls they receive from abroad. But he adds
The Society for Worldwide Interbank
“I think they should be giving away there is one key difference: that instead of
Financial Telecommunication – to give it
their software and promoting messaging a cost added to the bill at the end of the
its full title - allows banks and institutions
and looking at transaction charges month, the user will be told that he or she
to communicate electronically. The
which will then cover all the costs of the needs a new phone.
company began in the 1970s, with a
interfaces,” Bright explains. Bright’s company offers a bureau
“handful of people and an ambitious idea”
There are two issues, he says: interface service to firms wishing to join the SWIFT
in Brussels. The group - with the support
charging and moving to a transaction- network but he believes the SWIFT pricing
of more than 200 banks from a range of
based model. mechanism is not conducive to good
countries – began creating a common
Currently, SWIFT offers users reduced business.
language for international financial
traffic costs depending on the volume “If I want to bring 100 new smaller
transactions along with a standard
of messages sent. However, these savings players onto the network and our bureau
communications link.
are inconsequential compared to the traffic increases, we have to absorb
SWIFT went live in 1977, and by 1978
higher license fees for interfaces if they additional individual license fees or pass
the network had processed 10 million
reach a certain threshold of messages, as that cost directly to the user,” he says. “It
messages. It was the dominant player
interface charging is based both on both seems illogical that those livcense fees
in the financial messaging space for a
messages sent and received - something may be far greater than some vendor
number of years and is the organiser of
Bright describes as “penalising, nowt applications that drive business.”
the yearly Sibos event. However, voices in
rewarding, those looking for economies Hugh Cumberland, product strategy
the industry have expressed discontent at
of scale”. He adds that a high volume net director of secure messaging at BT Global
some of SWIFT’s policies – and a range of
receiver of trtaffic pays for the privilege of Banking and Financial Markets – a rival
competitors have sprung up, buoyed by
10
of SWIFT – disagrees with this sentiment. by phone, use internet-based custodian forward networks were state of the art – in
His company also includes a licensing links and or alternative free messaging 1977. He argues that the technique was
system for bureaux but argues that “when platforms, and use multiple brokers. used when servers were less reliable and
users get to a certain messaging level They are very unlikely to use SWIFT for copies of messages had to be stored –
they have to invest in a new platform settlements, and most likely outsourceany “these days, servers and networks can be
because there is a finite limit to what one messaging to a SWIFT-enabled kept up 14/7”, he adds. “We’ve provided
individual gateway can support in terms administrator.” 100% availability on Settlenet over the
of number of messages and number of ONe of the reasons businesses continue last five years and 100% availability on
customers”. But he adds that the costs for to use SWIFT is because it is seen in Managed Secure Messaging – both IP
the BT infrastructure and messaging are the industry as offering security. Peter based.”
“reasonably modest”. Sandhu, an ex-SWIFT employee and CEO While Synergy’s Sandhu is a fan of
How does Cumberland – another ex- at Synergy Financial Systems, a service the store-and-forward approach, he does
SWIFT employee - believe the BT offering bureau, explains that SWIFT offers extra admit that BT certainly beats SWIFT
improves on SWIFT? value over BT as it validates the messages in terms of price. “BT is looking at the
“It is a fully managed service, end- it processes and uses a store-and-forward number of kilo characters that they
to-end, which makes the overall cost of network, meaning messages can be send, along with a standing charge for its
ownership very favourable,” he explains. retrieved months after they have been sent. gateways, on a fixed annual charge,” he
“You don’t need to buy expensive software, However, this model may not be to says. “SWIFT’s pricing model is a lot more
you don’t need to buy hardware to run it everyone’s taste. SWIFT received some bad complicated than that: it’s based on various
on, and you don’t need to pay a consultant publicity recently when it emerged that different elements, and they still charge on
to come in and test it and install it for messages between European banks were the number of characters you send over the
you and do the annual upgrades. That’s being stored in a data centre in the US network.”
all included in the very modest service fee – effectively allowing the US Treasury to SWIFT also has a role as a forum for
that we charge.” the creation of financial message standards
BT’s Settlenet services processes around “[SWIFT] should and offers a system for third-party vendors
four million messages a day and has now
processed more than 10 billion messages be giving away to be recognised as SWIFT-accredited.
However, there are concerns that the
their software
since its inception 13 years ago. BT also multitude of standards that SWIFT offers
has around 12,000 financial services firms accreditation for are not always necessary.
connected to its IP network worldwide,
from banks to hedge funds. and promoting Sandhu explains: “It’s just not feasible
to get involved with all the accreditations
BT is not the only other company
offering financial messaging services messaging they come out with. We tend to cherry pick
the ones we think are going to be useful to
however. EMXCo has a message system
which was responsible for routing more and looking at us in the business.”
However, Financial Tradeware’s Bright
than 2.4 million messages in August 2009,
equating to more than EUR6.2 billion in
transaction charges” goes one further: “If you’re a small vendor
and you want recognition as having SWIFT
funds flow. The system is used for services messaging capability, SWIFT has a well-
such as risk mitigation, settlement and established vendor programme enabling
valuations.
“Our client portfolio of around 97
Graham Bright, companies to get technical support,
standards information, courses and access
providers includes both on and offshore,
retail, institutional and hedge funds,”
Financial Tradeware to a message test bed. However, if you
want to earn a product accreditation from
explains EMXCo CEO Yannic Weber. examine transactions that had been made SWIFT, which in no way guarantees fitness
“We have around 339 intermediaries in the European Union. for use, you have to pay a hefty amount
including stockbrokers, banks, While this problem should be mitigated per application. The proof of application
asset managers, fund of funds, fund as a result of a new SWIFT data centre suitability is not whether it can support a
supermarkets, wrap platforms, life in Switzerland, some are unhappy at the specific MT or MX format, as this is just
companies, IFAs, pension administrators perceived lack of privacy – something that one small element of application selection,
and pension funds.” could be seen as impacting on SWIFT’s but how it meets the individual customer
The range of clients of BT and EMXCo, reputation for security, according to BT’s requirements.”
from multinational banks down to hedge Cumberland. Some vendors – who did not want to go
funds with just a handful of clients, is “In terms of security BT is every bit on record - have also been unhappy that
another area where some are concerned as good as SWIFT,” he says. “Every time in some instances, SWIFT has evaluated
that SWIFT is being left behind. you open a message or every time you their software to ensure that it is SWIFT
“SWIFT is not visible in the hedge take a copy of a message you create an compliant, and then a few months later
fund market - they want to be but they information security risk. So BT doesn’t launched a similar product on to the
are driven mainly by message standards, take a copy of the message on the gateway market. Few of these believed that the
syntax and sale of interfaces, not by the or the network and it doesn’t open it SWIFT offerings were true “competitors”,
primary operational demands of the either. So it’s a completely private exchange given that they were a poor quality of
industry,” explains Bright. “A small hedge of information. That really mitigates that product, but they were unhappy at the
fund with a few high value messages a day information security risk.” behaviour of a company with which they
won;t use SWIFT. They will execute deals Cumberland adds that store-and- were supposed to be a “partner”.
11
12
most important market institutions have on ways to increase securities lending - will this increase the western markets
followed the recommendation of the transactions. ‘’Another topic being participation in Poland, or could it
WSE and KDPW by bringing together the introduced into the public discussion is potentially act as a deterrent?
representatives of brokerage houses and that of the use of close-out netting,” says As Mr Popiolek points out: “The
custodians, and adopted a set framework.” Mr Popiolek. “So far there is not much flagging of short sales is not new to
This framework is the lending clarity around this topic, therefore, most international markets. In some of the ‘new’
agreement prepared by the International lending relationships in Poland assume markets, this is already in place, such as
Securities Lending Association (ISLA), the lack of collateral netting, which has in Hungary. Therefore, the most obvious
known as the Global Master Securities a negative impact on the supply side road block- a system development need-
Lending Agreement (GMSLA), along and volumes. Although it is hard to give shall not materialise, as brokers- both local
with a Polish Supplement, which defines specific deadlines yet, the legislation and remote- should have all the necessary
in detail the terms and conditions process is advancing, which means that infrastructure in place. The short selling
for applying the standards to entities this show stopper will also be finally bans in various markets may lead to an
operating in the Polish market. Moreover, removed in the future.” assumption that Polish market regulators
in order to allow the regulations on Adam Maciejewski, a management will force monitoring of such activity as
making financial instruments lending free board member of the Warsaw Stock well, so either a flag or extending reporting
of stamp duty clearer, it was proposed that Exchange, has put forward more ways to in place.
this tax relief be introduced directly into “A securities loan in case of a seller’s
the wording of the legislation.
Jacek Popiolek, head of domestic “It has been default will become an additional step
between failing settlement and a buy- in
securities finance, Deutsche Bank Polska,
believes that these amendments will acknowledged that procedure of the clearing house, a kind
or forced auto fails coverage. This rule
significantly help to regenerate the Polish
securities lending market.
generally accepted impacts brokers, as they ought to sign up
at least one supplier in order to provide
“In general, the upcoming law change
deregulates short selling and securities
standards need to short selling to their clients.”
Mr Maciejewski agrees: “The Warsaw
lending enough to stimulate an increase
in traded volumes, and also add necessary
be introduced in Stock Exchange is absolutely convinced
that such restrictions will not be a
liquidity to the Polish market. Current
legal framework describes the short selling
Poland” deterrent for any market participants.
In fact, such restrictions give us certain
process in a very detailed and restrictive control over the risks coming from short
manner.” selling transactions. In our opinion, short
The short seller is not only forced to Iwona Sroka, KDPW selling control provided by stock exchanges
enter into a securities lending master or financial supervision authorities is
agreement with the executing broker, but expected by market participants.”
also follow specific rules for collateral: 50% boost volumes of transactions and levels Mr Popiolek adds: “Some of the
of order value before execution, and not of liquidity in the Polish market. “In co- regulations in the Act in Trading in
less than 130% after settlement. operation with the KDPW, we are going to Financial Instruments, such as the selling
Withdrawal of collateral is allowed create a platform to trade securities. of the National Depository of Securities
above 150%, and, in some cases, collateral “This platform will be intended for shares by Polish Central Bank, have raised
may only be pledged, and no tri-party institutional investors, and in the first political discussion, which caused a major
solution is possible. stage, will give them an opportunity delay in the implementation of the law.”
The new law will bring a completely to trade bilateral securities lending In Poland, once a law has been
different set of rules, allowing short sellers transactions in the same way as on the approved by the Constitutional Court, as
to borrow securities from different entities OTC market- without standardisation. “In it has here, it goes to the Polish president,
rather than just the executive broker, and the future, we are going to trade securities Lech Kaczynski - who is the head of state
enabling one to agree collateral terms with lending in the form similar to financial and has the power to veto this legislation.
the lender directly. instruments (like derivatives), with the The president is currently reviewing
Mr Popiolek gives the example of KDPW acting as a central counterparty. this change in legislation with the Polish
credit worthiness and volatility deciding We are going to popularise short selling Parliament. There is no fixed term for this
on haircuts, rather than decree. Although transactions and securities lending- activity, but once the new bill is signed by
the new Act of Trading in Financial especially among institutional investors the President, the new Act on Trading in
Instruments introduces a market driven who are the natural source of securities Financial Instruments will come into force
approach to short selling and securities lending supply- and since Polish pension within 14 days.
lending, it does not fully de-regulate the funds cannot lend securities without a Mr Popiolek said: “Following this,
process. “Some of the current security special decree, we are going to take action the detailed regulations on this act- for
rules are going to exist in the regulations to convince the relevant ministry to issue example, on the brokerage houses and
of the organised markets (for example, proper rules, so they can do so.” custodians banks activity- come into force
the Warsaw Stock Exchange), as well as in There is evidence of an overwhelming with an assumed delay allowing market
the detailed law governing the activities of desire to Westernise the Polish securities participants to adjust their processes and
custodian banks and brokerage houses,” he lending market. But with the increased systems. I see the Polish market to be in the
says. scrutiny- for example, the flagging of sales fully new law regime some time in the first
Deutsche Bank Polska also has ideas which could potentially be short sold half of 2010.” n
13
Credit ratings
Credit rating agency reform and the alternatives is still a strong and
timely debate, finds Ben Roberts.
Timothy Geithner, US Treasury correct transparency and oversight in
secretary, offered a prologue to last the future. The proposed guidance and
month’s meeting of G20 finance ministers compliance changes are still pending.
in a newspaper article that articulated This summary is the latest point of
the grounds for unwinding the fiscal view in a nuanced industry debate. In
and economic stimuli that have acted as a comment piece in Investor Services
a market “safety net”. He added a final Journal in January, Standard & Poor’s
warning that credit ratings agencies – emphasised that a rating is simply “one
along with other areas such as derivatives tool for investors to use in assessing credit
and securitisation – could expect tougher quality”. An over-reliance on this service,
regulation. the firm would argue, would be myopic on
The scrutiny and backlash aimed at experience and history to draw upon to the part of the investor.
credit rating agencies has existed since the rate these so-called ‘structured’ products as Last month also heralded a high-profile
beginning of the financial crisis. Before they would with simpler assets. return of securitisation, as Volkswagen
recession was a threat for many countries, The rating agencies, he says, “have revealed plans for a securities issue backed
the fallout from the use and trading of got 100 years of history ratings bonds, by car loans, estimated at around EUR500
complex instruments such as mortgage and they’ve got pretty good at it. The million. For some this news emphasised
backed securities (MBS) was partly defined market started changing [with] structured the latest indication of business-as-usual
by accusations aimed at the companies products, then hybrid products. They’re after a return to profitability of many
that provide risk analysis. the things causing the problem for the banks – and a resumption of the rating
The debate typifies wider discussions ratings agencies as they don’t have the activity for such products.
concerning corporate governance, history to draw on.” One area up for reform was the
accountability, and the tools for risk He adds that one problem with potential conflict of interest in which
management in the middle office of structured products, unlike equities and the company undergoing a rating paid
financial institutions. bonds, is that they are composed of many the agency for the service. To combat
The creation of ‘structured’ and often different financial instruments, such this, the regulator aims to prevent firms
opaque MBS instruments containing as bundles of mortgages. This creates a from consulting with any company that
mortgages became viewed as the dark problem of correlation that is difficult to they also rate, as well as strengthening
side of trading innovation as the credit assess as a rating agency. disclosure and management of such
crisis hit. The freeze in interbank lending “Structured products have the factor conflicts. Each rating report will disclose
was chiefly linked to these structured of correlation: how correlated are the the fees paid by the issuer for a particular
products that were starting to default mortgages or instruments in the pool used rating, as well as the total amount of fees
indiscriminately: an institution could not to create the product?” paid by the issuer to the rating agency
borrow money if it was suspected to incur In truth, a reform to the sector had in the previous two years. Every rating
huge losses -or brought down entirely - been mooted before the crisis. In 2006 the agency will also be required to designate a
from these failing products on its books. Credit Rating Agency Reform Act gave compliance officer.
The proliferation of such instruments the Securities and Exchange Commission The SEC’s proposals have led to nods
was encouraged by their top, triple-A (SEC) exclusive authority over the of acceptance from the rating industry and
rating given from apparently independent registration and qualification of the the companies they serve and analyse.
rating agencies. This widened the blame companies offering the service. The regulator also aims to clamp down
pool as credit market fear spread. This April, the G20 countries called on ‘ratings shopping’, where an issuer may
It led to calls for reform, including for a co-ordinated approach to reforming attempt to ‘shop’ among rating agencies
new disclosure requirements concerning the regulation within which the agencies by soliciting ‘preliminary ratings’ from
the methodology used to rate securities sit. On 21st July 2009 the Treasury sent multiple agencies and then only paying for
and financial institutions, and a fresh Congress proposals for full reform of the and disclosing the highest rating it received
look at the conflict of interest between sector, enhancing the authority of the SEC. for its product.
the analytical and commercial sides of the In a statement, the Treasury Regulators would now require an issuer
agencies. acknowledged that investors had become to disclose all of the preliminary ratings it
John Hull, Maple financial professor “too reliant” on the rating agencies that had received from different credit rating
of derivatives and risk management at the often failed to describe the risk of rated agencies, so that investors will see the
Joseph L. Rotman School of Management, products. “This lack of transparency amount of ‘shopping’ that occurred, and
University of Toronto, said that a key prevented investors from understanding whether there were discrepancies with the
problem that faced these agencies is the full nature of the risks they were final rating.
that they don’t have the same depth of taking,” it said, and vowed to ensure It also mooted the possibility of
14
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Sunil Chadda,
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of Alternative
Investments,
Carne Global
Media
2
multiple ratings for each security and oversight boards. indicator for market participants.
financial institution. A spokesperson for The Risk Assessment Oversight Sarah Nicholson, head of securities
Standard and Poor’s told ISJ this makes Committee is independent of S&P Ratings finance at Aviva Investors, told an
sense, particularly as greater disclosures by Services. It provides risk assessment of audience at a securities lending conference
the rating agencies must be parallel with S&P’s business strategies and plans and in London that it was partly due to
greater disclosure from the rated firms. evaluates emerging risks. recognition as to the limits of the credit
“The SEC has said it wants to encourage The Policy Governance Group, also rating agencies. “It became apparent that
healthy competition among ratings firms, independent of the ratings analysts, credit ratings were not the be-all and end-
including having multiple firms rating develops and approves all new ratings all and so we’ve taken to using the CDS
individual issuers or securities,” he said. policies and procedures. Members of market [in our analysis].”
“One way to achieve that is for debt issuers the Group include representatives of the John Hull also believed the rise of the
to disclose more information so that more legal and compliance teams as well as the CDS market for company analysis was a
ratings firms can form an opinion of Analytical Policy Board. sign of the times. “Traditionally, the only
creditworthiness.” So what are the alternatives for risk way you can get some idea of whether a
S&P has, to its credit, attempted to meet management teams when assessing company is likely to default in the next
the upcoming changes to credit rating companies and securities? year or so is to go to rating agencies, look
agencies head on with a series of initiatives. The credit default swap (CDS) market at what their rating is and any reports
The firm established a rotation system has emerged as one such investor service. they’ve produced, you can read the
of analysts, with ‘look back’ reviews in The market for CDSs - insurance contracts company’s financial statements.”
the second half of 2008 when an S&P taken out to cover the risk of counterparty Instead, he says, the CDS market may
analyst leaves to an issuer. It also created an default - exploded at the height of the be the most innovative service available.
Ombudsman to speed unresolved matters credit crisis as financial institutions sought “We have this very active CDS market
to the McGraw-Hill (S&P’s owner) CEO – protection from vulnerable companies. An where people are trading exactly what the
open to public and SEC scrutiny. Since last analysis of this market – ie, who is seeking company is interested in – the chance of
year it also has a variety of protection from whom – has become a key the company defaulting.” n
• Maximum control and transparency through separate account solutions tailored 18 Best in Class Awards for
to unique investment guidelines, counterparty eligibility constraints and reporting needs Securities Lending
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The products and services featured above are offered by JPMorgan Chase Bank, N.A., a subsidiary of JPMorgan Chase & Co. JPMorgan Chase Bank, N.A., is registered by the FSA for investment business in
the United Kingdom. J.P. Morgan is a marketing name for Worldwide Securities Services businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. ©2009 JPMorgan Chase & Co. All rights reserved.
14-19 ISJ43.indd 17
JPM_SecLend_2i_ad_8.26.indd 1 07/10/2009
8/26/2009 13:38
2:33:57 PM
Custody ISJ |ISJ Investor
Investor Services
Services Journal
Journal
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
some 51%, with HSBC in second place, The new freedoms given by the CVM space, though this is not through lack of
with around 22% of market share. Itaú of allowing more pension fund holdings interest. Fund managers are well aware of
Unibanco is in third place with 9% of the to be based in equities makes the Brazilian the phenomenal performance of the BRIC
foreign services custody market in Brazil market particularly exciting, he says. From countries and Brazilian securities are seen
and Santander is fourth with about 4.5%. there, the logical next step will be for them as highly attractive.
“On the domestic side, which means to start buying Brazilian fund of funds, Ed Oliver, global head of consulting
providing services to the Brazilian pension and after that, they can be expected to start at Data Explorers points out, the rules of
fund sector, which dominates the Brazilian moving into overseas securities. the game in Brazil mean that all securities
fund industry, the custody business is in Commenting on Mexico, Kalavritinos lending has to be through the central
the hands largely of the big local banks. says that post the crash there has been a depository, an adjunct of the exchange,
Banco Bradesco is number 1, with Itaú huge flight of Mexican fund capital out of which then becomes the counterparty for
Unibanco in second position, followed by US assets and back to Mexican assets. The the borrower.
Banco de Brazil, and HSBC is in fourth largest sub custodians in Mexico are the The central depository, standing in
position.” Mexican banks, virtually all of which have the middle of the trade, both restricts fine
Mike Kalavritinos, managing director been acquired by major foreign banks, tuning of the collateral by either party and
of Bank of New York Mellon’s Latin with BBVA and Santander being major it means that the lender’s clients are fully
American Asset Servicing Group, points players along with Citigroup. exposed to the exchange. If it goes down,
out that the total funds market in Brazil Hugo Arbat, head of custody and their money is gone.
is worth around 1.2 trillion Brazilian real, clearing at HSBC Argentina, says that “The Brazilian authorities know that
about USD600 billion. Kalvitrinos says while the securities market in the country this system is hugely unpopular with
that 2009 net inflows of funds by foreign has only 110 stocks, the exchange has the securities lending industry and they
investors into Brazilian securities have
been high, and will probably reach around “Some borrowers are showing some signs of being willing
to listen. However, what it essentially
USD20 billion.
He points out that CVM, the Brazilian who really want means is that some borrowers who really
want Brazilian securities will double
regulator, has enacted several significant
changes to the rules governing investment Brazilian securities collateralise. They will collateralise in local
currency or Brazilian treasuries, which
funds in Brazil over the last two years. It
has cleared a two-way path: the entrance will double are held locally by the central depository.
Then they will put up another subset of
of foreign investment and the overseas
investment of domestic funds.
collateralise” collateral outside of Brazil. This essentially
treats the Brazilian collateral as valueless,
He adds that prior to the global crash, which makes very little sense.”
the high interest rates and high returns Thus, if you are a lending agent wanting
enjoyed by domestic investors in Brazil
made it seem unnecessary for domestic
Ed Oliver, to promote new trading opportunities
for a client, you would need to put up a
fund managers to look abroad for high
rates of return. However, plunging real
Data Explorers tremendously convincing case and give
them a vast amount of information about
interest rates have turned that on its head. what you wanted to do in Brazil before you
“Brazilian pension funds are mandated more than 100 years of history behind it, would have a chance of signing them up.
to earn 6% above inflation. Interest rates and many US companies are dual listed in Securities lending as far as custodians
are currently 8.75% and with inflation Argentina, with a number of Argentinean is concerned is completely different. The
forecast for 4.4% for 2010, it is clear that companies dual listing on US and successive reforms of the Mexican financial
fund managers will not achieve these European exchanges. system mean that the practice there follows
returns without looking abroad. The CVM The Argentinean pension funds were European and US best practice.
had a long standing limit of just 3% on the biggest institutional investors in the Mexico, the other Latin American
the amount of assets pension funds could market, but their nationalisation in 2008 heavyweight, has benefited hugely from
invest abroad. It raised this to 10% two in a shock “grab” by the Argentinean being open to foreign players since its
years ago and the current situation is likely government has raised huge question disastrous economic crisis in 1994.
to push investors to use the additional marks over their future activities. This Andrés Borrego, country head at Credit
slack the CVM has extended to them.” leaves the insurance companies and Suisse, points out that foreign banks
At the same time, the CVM raised the institutional funds as the major investors have invested heavily in the Mexican
limits on foreign holdings for Brazilian today. A recent regulatory change means financial market over the last few years
hedge funds to 20% and, according that all local insurance companies have to and have brought fresh expertise and new
to HSBC’s Roberto Cortese, the local have their assets under custody with a local financial products to the market, including
insurance commission has now created custodian. HSBC, he says, is one of the consumer loans, mortgages and “micro-
a special class of local fund that has been major custody providers for local investors. finance”. Credit Suisse’s history in Mexico
authorised to invest up to 100% of its There is no securities lending market goes back three decades. The bank was the
portfolio in overseas securities. in Argentina because the regulators will pioneer behind Mexico’s first sovereign
BNY Mellon, though it outsources only allow banks to lend directly, not to act bond issues and custodial services are well
local custody, is the eighth largest fund as an agent between two parties, a lender established with a number of local and
administrator for Brazilian clients buying and a borrower. Brazil and Mexico are the global players. n
Brazilian and foreign assets. only markets worth highlighting in this
18
19
Moritz Ostwald,
“A few years ago there was less
workload as its emphasis on voting. Now people
European peers
know they have to take care of their
voting rights, demanding not only the BHF Asset Servicing
instructions but specific reporting for
every vote they had.
they need the best service possible and so “For example, we send a detailed
go directly into the market.” report to clients in those very rare cases
Local knowledge, the capacity to where a voting agent did not follow and fiscal developments.
‘tailor’ services, and the speed to react to 100% the voting instructions given by “On the other hand, when talking
market changes are three key benefits of our clients, thus ensuring a high level of about regulation, clients are requesting
local service. Still, however, institutional transparency nowadays demanded by us to lobby into our own market. That’s
investors have two additional concerns: their auditors.” where a local market specialist comes into
cost and flexibility. Ostwald adds that the speed of play: although not the largest in size, BHF
There are occasional cost-savings from corporate actions service, including Asset Servicing is well connected within
using one provider. But Ostwald points processing votes right up until deadline, the German financial services industry
out that with the default of Lehman is another strength of a local provider. and is perceived as a specialist institution
Brothers’ still fresh a year on, there is less Further, an investor may also consider for custody in the market, which is also
appetite for the investor to put “all their during its request for proposal (RFP) how important for its customers: to have a
eggs in one basket”. This creates a tough effectively a provider can lobby for his presence through their sub-custodian.”
decision for clients in choosing between own ideas. Beyond the size and domiciliation of
diversification and costs. “It has become Legal expertise is another service investors entering the German market,
more important to spread the risk and increasing in importance and relevance. there is no “best solution”, says Ostwald.
have a ‘back up’ custodian in place to share Though a Depotbank is not technically The selection of securities services by a
the responsibilities. an adviser, the custodian needs to be fully client can vary from fellow clients, but
“In the downturn it might become versed in new or upcoming national and over time too. This is where the flexibility,
more expensive. Price is important but on international rules. It’s a two-way street, knowledge and track record makes
the other hand it’s more important to have says Ostwald: “On the one hand you need the difference between providers in a
the quality for the price; the third pillar is certain experience in your own group to competitive environment – particularly as
credit rating as well as commitment to the inform your client adequately on legal Germany continues its global resurgence.n
21
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Asset Servicing
Consultancy
SMA Financial is the UK’s premier provider of SWIFT services and a long standing Simon Murby
business partner of SWIFT. SMA’s vast experience in the banking and securities Managing Director
industry has provided high quality provision of SWIFT related consultancy, training, SMA Financial Limited
system care and bureau services which is second to none. SMA prides itself on their Telephone : +44 (0)20 7940 4200
in-depth and highly experienced team of consultants chosen from the banking and Bramah House,
securities industry. The introduction of the SWIFT bureau service has witnessed much 65-71 Bermondsey Street,
success by providing cost effective and quality hosted connectivity services to many London. SE1 3XF
satisfied clients. Website: www.sma.co.uk
BHF Asset Servicing GmbH comprises the custody, depotbanking and securities services
of BHF-BANK Aktiengesellschaft. With around 250 members of staff, approx. EUR 270 Strahlenbergerstraße 45; 63067
billion in assets under administration and a depotbanking volume of EUR 85 billion, Offenbach a.M. Germany
BHF Asset Servicing GmbH is one of Germany’s leading specialists in depotbanking •Contact: Moritz Ostwald
and custody business. It develops innovative and high-class services for investment •Phone:+49 69 667744 838
companies, institutional investors and foreign banks, and excels at tailoring solutions to •Email: moritz.ostwald@
the individual needs of its clientele. bhfassetserv.com
DnB NOR is the leading provider of Custody, Clearing and Remote Member Service in T: +47 22 94 92 95
Norway. DnB NOR offers a full range of securities settlement, Corporate Action and cash F: +47 22 48 28 46
management services for both foreign and domestic institutional clients. The bank Contact: Bente I. Hoem, Head of Global
has a strong commitment to the Custody business in Norway and the staff is highly Relations & Network
knowledgeable and experienced. In addition, DnB NOR provides a wide range of value- E: bente.hoem@dnbnor.no
added services for foreign clients such as Securities Lending, Income Collection, Proxy W:www.dnbnor.com
Voting, Tax Reclaim, and MIS reporting.
As the largest commercial bank in Norway, DnB NOR offers clients full services in
securities trading, registration, foreign exchange and Money Market.
Banking Securities Services provides award winning local and regional custody services
for investment professionals. We are proud to be the largest custodian provider in
terms of assets and number of foreign clients in Central & Eastern Europe. ING has For further information please contact
been providing Securities Services in CEE since 1994 and we will continue our ongoing Lilla Juranyi, Global Head Custody
pursuit of excellence through new technology. Innovation and client focus are the key at + 31 20 7979 435
drivers to service our clients the best way. or contact her by email:
Other activities of ING Wholesale Banking Securities Services are Paying Agency Lilla.Juranyi@mail.ing.nl
Services and web-based management of employee stock option & share plans.
ING is your local partner in: Belgium, Bulgaria, Czech Republic, Hungary, Poland,
Romania, Russia, Slovak Republic and Ukraine.
24
Nordea is the leading financial services group in the Nordic and Baltic region and operates
through three business areas: Nordic Banking, Private Banking and Institutional &
International Banking. Nordea is the leading custody services provider in the region. Nordea
provides high quality, tailor-made custody services for local and foreign investors dealing with Contact:
Nordic and Baltic securities. Due to the unique history of being formed from four established Nina Groth
banks, Nordea is the only Nordic custody provider with strong local presence and expertise in all Head of Sub-custody and Clearing
four markets. Nordea combines Nordic competence with local expertise, and has proven ability Tel: +45 3333 6124
to deliver high quality services that meet both clients’ and each local market’s requirements. E-mail: nina.groth@nordea.com
Leading Nordic custodian: Critical mass and resources available; deep local experience and
active involvement in each Nordic market; Complete operational capabilities and best-fit
systems developed in each Nordic market; Proven ability to deliver high-quality service in all
Nordic markets; Excellent connection with key players in all Nordic Markets; Extensive product
and service offering; Your single point of entry to the whole Nordic region.
Santander is Spain’s leading financial institution and the largest bank in the euro zone
by market capitalization. Our commitment and contribution to the securities industry is
T: Europe: (34) 91 2893932 / 28
well established after more than a century of providing services in this field.
T: USA: (1212) 350 39 02
Santander’s cutting edge technology enables it to offer a comprehensive array of
W: santanderglobal.com
innovative services in a broad range of markets. Santander currently has full local
E: globalsecurities@
capabilities in Iberian and Latin American markets along with a franchised presence in
gruposantander.com
many others. Santander`s experience and product range ensures that every aspect of
the securities business is fully contemplated.
SEB is the leading provider of securities services in the Nordic and Baltic area. We
are committed to custody and clearing processes for the wholesale market. We hold
T: +46 8 763 53 04
securities worth over 560 bn EUR and provide services in more that 75 markets, 10 of
F: +46 8 763 69 30
them under the SEB name (Sweden, Norway, Finland, Denmark, Luxembourg, Germany,
C: Goran Fors, Global Head
Estonia, Latvia, Lithuania and Ukraine).
of Custody Services
We offer a full range of securities services including corporate action and information
E: goran.fors@seb.se
services, securities lending and services to remote members of the Nordic and Baltic
W: www.seb.se
stock exchanges. We continuously develop new products in connection with clients and
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securities industry; we know the market and our clients well.
Société Générale Securities Services offers institutional investors, asset managers and Sébastien Danloy
financial intermediaries a comprehensive range of financial securities services: custody, Global Head of Sales,
clearing & trustee services, fund administration, asset servicing and transfer agency. Investor Services
SGSS currently ranks 3rd European custodian and 9th worldwide custodian (Source: Société Générale Securities Services
Globalcustody.net) with EUR 2,580* billion in assets held and valuates 4,354* funds T: +33 (0)1 41 42 98 65
representing assets of EUR 405* billion (as of June 2007). E: sebastien.danloy@socgen.com
W: www.sg-securities-services.com
25
With an extensive network that spans over 70 countries, well-positioned in the emerging trade and
investment corridors across Asia, Africa and the Middle East, Standard Chartered’s Wholesale Banking
business combines global capabilities with local expertise to develop innovative products and services C: Giles Elliott, Global Head, Securities
to meet the diverse needs of our corporate and institutional clients in some of the world’s most dynamic Services
markets. Building on a rich banking heritage, Standard Chartered is noted for a client-focused approach P: +65 6517 0134
to business, unmatched on-the-ground expertise and a solid track record of innovative, award-winning E: Giles.Elliott@sc.com
financial services solutions, reflecting our continued commitment to power our clients’ ambitions. As W: www.standardchartered.com
one of Asia’s leading custodians, Standard Chartered serves global, regional and local custodians and
broker-dealers, as well as local and regional fund managers. The Bank plays a key role in promoting the
development of these markets and keeping the international investor community informed of industry
developments across the region.
Data Services
Market Data & Analytics provides high-value real-time market data, indices and back Avox
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cooperation partners like STOXX Ltd. and the Irish Stock Exchange. Avox®, a majority- United Kingdom
owned subsidiary, validates, corrects, enriches and maintains business entity data. With
an operational model, unique in the industry, Avox® enables clients to comply with T: +44 (1978) 661 813
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Interactive Data Corporation (NYSE: IDC) is a leading global provider of financial market www.interactivedata.com
data, analytics and related services to financial institutions, active traders and individual T: 020 7825 7800
investors. The Company’s businesses supply real-time market data, time-sensitive F: 020 7608 3514
pricing, evaluations and reference data for millions of securities traded around the Brendan Beith
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trading, analysis, portfolio management and valuation activities. Through its businesses, Fitzroy House
Interactive Data Pricing and Reference Data, Interactive Data Real-Time Services, 13-17 Epworth Street
Interactive Data Fixed Income Analytics, and eSignal, the Company has approximately London EC2A 4DL UK
2,300 employees in offices located throughout North America, Europe, Asia and
Australia.
SmartCo is a leading provider of data management solutions for the financial industry. For further information: www.smartco.fr
SmartCo’s software, Smart Financial Data Hub, covers all the data area, including or info@smartco.fr
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SmartCo offers to its customers the ability to respond in the fastest way to regulatory and T: + 33 1 58 22 29 60
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W: www.smartco.fr
Fund Administration
With more than 35 years’ industry experience, Capita Financial Group provides fund
managers with fast and cost effective third-party administration services, enabling Leah Cox
you to free up your day to focus on growing your funds and business. Our main focus is +44 (0) 207 954 9559
to provide a ‘Best in Class’ administration service, we work in partnership with you to leah.cox@capitafinancial.com
innovate, increase efficiency and provide the high level of customer service that you and www.capitafinancial.com.
your clients expect. With our UK and offshore centres (Jersey, Guernsey, Ireland and
Gibraltar), we offer a bespoke service to our clients and each area’s unique regulatory
environment.
26
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Fund Services holds a leading position in the area of hedge fund administration Cayman Islands: Darren Stainrod,
with specialized teams around the world. We offer a complete range of services tel. +1-345-914 1076
Eire: Don McClean, T: +353-1-436 3636
including accounting, NAV calculation, shareholder services, banking and credit
US: Concetta Mastrangelo,
facilities. tel. +1-212-882 5523
With specialist expertise in both single manager and fund of hedge fund W: www.ubs.com/fundservices
administration, services can be provided for both onshore and offshore funds. C: Darren Stainrod, T: ++1-345-914 1076
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Prime Brokerage
Newedge Global Prime Brokerage Group is a global, multi-disciplinary, solution-
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banks and pension funds). The Newedge prime brokerage team offers a global range Vincent Tournant, Head of Business
of brokerage services covering a wide range of asset classes including equities, Development T +44 20 7676 8171
bonds, currencies, commodities, and their related listed and OTC derivative products. Duncan Crawford, Head of Capital
We also offer an innovative portfolio-based cross-margining solution, a dedicated Introductions T +44 20 7676 8504
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Société Générale, with both companies having 50% ownership.
Securities Lending
Data Explorers (www.dataexplorers.com), based in New York and London, is the UK: 2 Seething Lane, London, EC3N 4AT
world’s most complete resource for data, analysis and insight into securities T +44 (0) 20 7264 7600,
lending and short selling. The company’s proprietary data gives an unrivalled, F +44 (0)20 7392 4004
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directly from securities lending desks of over 100 of the top lending firms and New York, 10019, USA
representing most of the global securities lending market, Data Explorers has built T +1 212 710 2210 F + 1 212 710 2212
a reputation with leading financial institutions as the source for short intelligence Julian Pittam T +44 (0) 207 264 7616
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com/companies/data-explorers sites. www.dataexplorers.com
28
Eurex is one of the largest derivatives exchanges and the leading clearing house
in Europe. Wherever you are located, we provide you with access to the benchmark
futures and options market for European derivatives. Eurex also offers short term
funding products, such as Eurex Repo. Eurex Repo is among the forerunners in
providing integrated trading and clearing for repo transactions. Eurex’s latest W: www.eurexseclend.com
innovative marketplace is called Eurex SecLend. T: +41 58 854 2066
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intermediaries. They all benefit from Eurex’s leading state-of-the-art trading and Eurex Zurich Ltd., Selnaustrasse
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of advanced trading practices. Find out more on www.eurexseclend.com.
FINACE® is the only fully integrated solution today which supports the future T: +41 (0)44 298 92 00
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can be quickly and easily applied to the standard component set. www.comit.ch
JPMorgan’s Securities Lending program is unparalleled due in no small part to New York: William Smith
the Firm’s breadth of capability, financial strength, professional expertise and T: 212-623-5664
seamless operations. Our program enables investors to access a broad spectrum of E: william.z.smith@jpmorgan.com
lending markets, with a diverse borrower base, offering a broad indemnification London: Michael Fox
against borrower default, while achieving very competitive bids for their T: 44 207 742 0256
securities - all of this in an environment designed not to compromise the activities E: michael.uk.fox@jpmorgan.com
of their fund managers. As one of the founding members of EquiLend, a global Sydney: David Brown
T: (61-2)92504606
automated platform for borrowers and lenders, JPMorgan is at the forefront
E: david.ldn.brown@jpmorgan.com
of technology and is ideally placed given its integrated lending, custody and
W: www.jpmorgan.com/wss
accounting platforms.
29
Technology
BI-SAM is a leading provider of analytics software, client reporting and data
management solutions to the investment management community.
Our integrated and innovative solutions have already been adopted by many A: BI-SAM Ltd
renowned asset managers in France, Belgium, Luxembourg, UK, Hong Kong and 1 Cornhill
London EC3V 3ND
Singapore who have assets under management ranging from 10 to 450 billion Euros.
T: +44 (0)20 3008 5834
The B-One suite of products covers: performance measurement, performance
F: + 44 (0)20 3008 5831
attribution (equities, balanced and fixed income), risk attribution (ex-post and ex-
E: marketing@bi-sam.com
ante), as well as multi-lingual client reporting and factsheets. This suite of products W: www.bi-sam.com
can be used either as stand-alone applications or ASP hosted solutions.
The Company has approximately 45 employees in offices located in Europe (Paris,
London, Luxembourg). Offices in Asia and North America are under consideration.
The Company is headquartered in Paris.
DST International is the world’s premier vendor of technology solutions to the global investment T: UK +44 (0)20 8390 5000
management community with over 700 clients in 55 countries, and 1500 employees in 19 of the Boston +1 617 482 8800
world’s leading financial centres. Our wide range of asset management solutions meet the needs of Hong Kong +85 225 812 880
fund managers, dealers, settlement staff, custodians and record keepers operating as international F: +44 (0)20 8390 7000
asset managers; from front office simulation, opinion management and modelling functions, E: info@dstintl.com
through data management, dealing and settlement to custody and corporate actions. The suite of A: DST House, St Mark’s Hill, Surbiton,
products can be used either as stand-alone applications or brought together in flexible combinations Surrey, KT6 4QD
according to specific needs. W: www.dstinternational.com
Financial Tradeware provides integrated solutions for medium to small sized Investment
Management firms, Fund Managers and Hedge Funds, covering the full trade life cycle. W: www.f-tradeware.com
It is part of the Dharma Group of companies and benefits from the joint contributions T: +44 (0)20 7493 2773
and experiences within the group of market traders, business analysts, financial services F: +44 (0)20 7495 4858
professionals and skilled Microsoft Certified programmers. The company has developed a C: Graham Bright
suite of applications that integrate and Straight Through Process (STP) real-time trading, E: info@f-tradeware.com
back office administration, accounting and compliance. Ultra.net®, S-Messenger® and A: 31 Dover Street
H-Fund® arwe the company’s flagship products all based on Microsoft.NET infrastructure. London W1S 4ND UK
The company also offers a Member Concentrator for hosted SWIFT connectivity and Member
Administered Closed User Group (MA-CUG) services for Corporates and Hedge funds.
Isis Financial Systems provides mission critical investment management software and
services to many large and small companies. Our customers perform a broad range of
functions including fund accounting, derivative and hedge funds, wealth management, Contact:
and pension and endowments, etc…. Our integrated solution services the front, middle, Isis Financial Systems
and back offices of these companies with software that accommodates most any security 14 Felton Street
type. Built on a contemporary three tiered architecture our application helps financial Waltham, MA 02453
companies improve operating efficiencies, increase accuracy and reliability and improve Sales@IsisFS.com
customer service. (00-1) 781-209-0262
IsisFS has the experience and IMS has the tools to improve your operations and save you
money.
30
For more than a decade, administrators, managers, and advisors have relied
on KOGER for dependable software tools backed by extensive industry T: 001-201-291-7747
experience and expertise. Now, for those who want to reduce costs and streamline F: 001-201-291-7808
business processes, Koger offers Fully Integrated Fund C: Mr Ras Sipko
Administrator, a vertically integrated suite serving the back-office software needs of the E: ras@kogerusa.com
fund industry. KOGER USA
Fully Integrated Fund Administrator consists of three core programs: 12 Route 17 North
~ NTAS, the New Transfer-agency System Suite 111
~ E*TAS, Electronic Transfer Agency System Paramus
~ GRID, Global Reach Interface Daemon New Jersey, NJ 07652, USA
Other programs, such as PTAS, KIT, and KORS available separately, complement the core W: www.kogerusa.com
competency of Fully Integrated Fund Administrator.
Building on over twenty years of experience in capital markets and cross-asset software
solutions, Murex introduces Mx Asset Manager - a unique cross currency, cross asset fund C: Hélène Desbiez
management solution capable of handling the full range of products, from plain vanilla to Business Development Manager
the most complex derivative products. T: +33 1 44 05 32 00
Coupled with a high degree of flexibility and customization, Mx Asset Manager E: helene.desbiez@murex.com
features a multifaceted design catering to the needs of both service providers W: www.murex.com
(prime brokers, administrators, asset servicing providers) and direct clients (portfolio
managers for mutual, pension or hedge funds, insurance companies).
With so many new challenges presented to buy-side managers when integrating
increasingly-complex derivatives into their portfolios and funds, Mx Asset Manager
represents a strong and reliable ally for dynamic position keeping and multi-dimensional
risk management in a thriving market.
31
peterevans is a leading provider of front to back office solutions for the financial services
sector. With 23 years experience peterevans takes a sophisticated and dynamic approach
peterevans
to assist customers in reducing costs and witnessing an increase in margins by seamlessly New Broad Street House
replacing costly and restricting legacy platforms. peterevans works in a collaborative 35 New Broad Street
manner and sees clients as partners to help meet all the demands in today’s marketplace. London EC2M 1NH
The xanite product suite offers a highly configurable, flexible and fully integrated, browser T: +44 (0) 29 20 402200
based, comprehensive front to back solution that complies with message standardization E: info@peterevans.com
and settlement harmonization. Deployed as a single application or integrated as W: www.peterevans.com
components into your existing platform. Each of the xanite modules can be delivered via an
ASP or self-hosted. Covering: wealth management, custody corporate actions clearing and
settlement private client and on-line stock broking.
Pirum provides a full suite of automated reconciliation and straight through processing
(STP) services supporting Operations within the global securities finance industry. The T: +44 20 7220 0961
company’s on-line SBLREX service encompasses daily contract F: +44 20 7220 0977
compare, monthly billing comparison, mark-to-market & exposure processing, pending C: Rupert Perry
trade comparison, income claims processing and E: rupert.perry@pirum.com
custody reconciliation. A: Pirum Systems Limited
Subscribers to Pirum’s services significantly increase their operational efficiency and 37-39 Lime Street
reduce their risk by using Pirum’s solutions, as staff are able to focus on fixing the London, EC3M 7AY
exceptions instead of using their time to check and process routine business. These W: www.pirum.com
automated processes are more scalable and risk controlled too, allowing
significantly higher volumes to be managed without corresponding increases in
operations headcount.
Princeton Financial Systems (PFS), a 100% subsidiary of State Street Corporation, is a leading
provider of portfolio management and accounting systems, investment compliance, data For more information, visit Princeton
management, and reporting solutions to the global investment industry. Our solutions are
used worldwide by over 430 leading investment managers, custodians, insurance companies, Financial’s website at www.pfs.com or
pension funds, hedge funds, and banks, which manage combined total assets of over $5 www.pfs.aquin.com.
trillion in more than 40 countries.These include ABP, AEGON, AIG, Allianz Global Investors, T: +1 609-987-2400
BNP Paribas, CaIPERS, CACEIS Investor Services, Citi, Commerzbank, Credit Suisse, HSBC F: +1 609-987-9320
Insurance, Metropolitan Life Insurance, Nationwide, Northwestern Mutual, Prudential, RBS, C: Lorne Whitmore, Vice President,
Société Générale Securities Services, and State Street. MIG21, PFS’s award-winning investment Global Sales & Product Management
compliance and risk monitoring solution, optimizes pre-trade and post-trade compliance E: lwhitmore@pfs.com
checking, the administration of regulatory, prospectus, and internal investment guidelines A: 600 College Road East,
along with the consequent resolution workflows. PFS, headquartered in Princeton (NJ), has Princeton, NJ 08540, USA
offices located throughout the United States, Canada, Australia, Singapore, and China as well W: www.pfs.com, www.pfs.aquin.com
as in United Kingdom, the Netherlands, Luxembourg, France, Germany, and Switzerland.
Netik’s team have spent the past 25 years perfecting the art of bringing For more information please
together market, reference, portfolio accounting, performance and risk data visit: www.netik.com
from disparate sources into a single version of the truth (SVOTTTM). The result or email: marketing@netik.com
is a highly scalable and sophisticated business data model that has been
designed to process all securities and offers a complete model for traditional
and alternative markets.
SunGard is one of the world’s leading software and IT services companies. SunGard serves SunGard Global Trading
25 Canada Square, London E14 5LQ
more than 25,000 customers in more than 70 countries, including the world’s 25 largest
financial services companies.
Tel +44 (0)20 8081 2000
Dedicated to post trade securities operations, GL RIMS is your comprehensive real time Fax +44 (0)20 8081 3399
securities post execution processing solution, covering middle office, settlement and
accounting requirements. Its wide use of automation enables global capital markets www.sungard.com/globaltrading
organisation to achieve maximum STP. It is a flexible, highly scalable and easy to install
platform with a new Service Oriented Architecture feature that allows smooth and Email: info.globaltrading@sungard.com
efficient connections with other third parties within a company.
32
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