Cross-Border Panel Discussion
ACSDA Leadership Forum
Lisa Argento, International
Cecilia Humphrey, Americas Representative
October 10, 2007
Global Factors Are Transforming Markets
• Rapid Advances in Technology Enabling Ease of
Access, Driving Volumes
• Emergence of New Growth Markets
• Complex Trading Strategies
• Explosion of Financial Instruments
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• Global Competition for Risk-Managed Returns
Today, Investors Are Demanding Global
…despite diverse regulatory structures, taxes, laws, accounting
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practices, complicated by culture, currency and time zones
Today’s Markets Are Reshaping
• Cross-border Exchange Mergers
• For-profit and Demutualized
Exchanges
• Consolidation and Mergers in the
Market Infrastructures Sector
• Exchanges Buying Stakes in Other
Markets
• Cross-listed Issues and Indices
• Cash Markets Growth Dwarfed by
Futures, Derivatives, Options
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• Rise of Alternative Trading
Platforms
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Transformed Exchange Ownership
EuroCCP & Turquoise
• Turquoise – Consortium of Major
Financial Institutions Launching New
Pan-European Trading Platform
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• DTCC’s EuroCCP Subsidiary Selected to
Provide a Clearing & Settlement Solution
for Turquoise
MOUs – Cooperation & Collaboration
• Signing “Memoranda of Understanding” with Asian
Infrastructures:
− Taiwan Securities Central Depository (TSCD) - August 2003
− Japan Securities Depository Center, Inc. (JASDEC) - August 2003
− Korea Securities Depository (KSD) - April 2004
− ChinaBond (CDC) – December 2006
− ChinaClear (SD&C) –June 2007
− National Securities Depository Ltd., India – June 2007
− Central Depository Services of India Ltd -- June 2007
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− Pakistan Central Depository (CDC) –July 2007
Global Conferences & Meetings
• Active participation in many global
organizations:
– ACSDA
– ISSA, SIFMA Cross-Border
– Global Standards Groups – ISITC, SMPG
– CSD9, Korea, April 2007
– Asia-Pacific CSD Group (ACG), Beijing, September
2007
– Sibos, Boston – October 1- 5, 2007
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– ACSDA, CCP12, ISITC & SMPG Meetings in Boston
CSD Linkages
Cross-Border Collateral Pledges
Custody and Book-Entry Deliveries
Clearance and Settlement vs. Payment
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Central Counterparty Guarantee Links
Why Consider Linking?
Promote global markets and issuance by providing
other markets with US local support for their trading
of US issues
Similarly, gain support for international issues
from their local infrastructures.
Promote best practices and establish global
standards for settlement
Link messaging should be based on ISO
standards
“Link eligible” securities expanded as needed
Jointly address inefficiencies relevant to
cross-border transactions or asset servicing
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Overall goal: Enable participants to process
increased cross-border transaction volumes at
lower cost and risk levels, and maximize
participants’ capital effectiveness
Current CSD Links – Clearing,
Settlement and Custody
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Canadian Depository For
Securities account, with
full DVP and clearing.
Current CSD Links into DTC – Custody
and Book-entry Delivery
Clearstream Banking Frankfurt
(Germany)
Central Depository Pte Ltd
(Singapore)
Cavali (Peru)
Caja de Valores (Argentina)
CRESTCo (UK), now Euroclear UK
Necigef (Euroclear Nederland)
Hong Kong Securities Clearing
Company
Tel Aviv Stock Exchange Clearing
House (Israel)
Monte Titoli (Italy)
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JASDEC (Japan)
Indirect Links into DTC
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Agent Banks
Current CSD Links into DTC- Pledgee
Accounts
CBLC Brazil
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Canadian Derivatives Clearing
Corporation
Current DTC Links into CSDs
- Canadian Depository
for Securities
- Clearstream Frankfurt
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- SIS SegaInterSettle
DTC’s Current CSD Links
DTC
Securities
Delivery
DTC Participant
CSD Participant
Payment
Arrangement
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CSD
ACSDA Cross Border Links Committee
 Arrangements for knowledge sharing
and implementation of technology
 Develop linkages with growing markets
to strengthen the markets for foreign
investment.
 Establish global standards and
capability development
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 Settlement Advisors for Ibero-America
Stock Exchange Federation Market
Links Project
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