1. MT-MX Coexistence Event name, Location Name, Title, SWIFT
September 2008

2. Agenda Coexistence update Framework and improved approach
New products and tools
Questions and answers
MT-MX Coexistence - September 2008

3. Coexistence update
MT-MX Coexistence - September 2008

4. Financial industry standards → The current situation
SWIFT
Edifact ? ?
Proprietary ? ? ? ? ?
Domestic
FpML
FIX
MT-MX Coexistence - September 2008

5. Financial industry standards → The way forward (Coexistence)
ISO
20022
ISO
20022
This slide dates from 2004 !
Edifact
Proprietary
SWIFT
ISO
20022
ISO
20022
Domestic
FpML
ISO
20022
FIX
ISO
20022
MT-MX Coexistence - September 2008

6. What is driving the move to ISO 20022?
New initiatives
Global harmonisation
Giovannini and SEPA in Europe
Market infrastructures
Automation in the ‘funds’ market
New players
Corporates, fund managers
New technology
XML, SOA, web services
MT-MX Coexistence - September 2008

7. FIN message categories
Category 1 – Customer Payments & Cheques (18 messages)
Category 2 – Financial Institution Transfers (17 messages)
Category 3 – Treasury Markets – Foreign Exchange, Money Markets & Derivatives (27 messages)
Category 4 – Collections & Cash Letters (18 messages)
Category 5 – Securities (67 messages)
Category 6 – Treasury Markets – Metals & Syndications (20 messages)
Category 7 – Documentary Credits & Guarantees (29 messages)
Category 8 – Travellers Cheques (18 messages)
Category 9 – Cash Management & Customer Status (29 messages)
5 ISO 15022
53 ISO 15022
MT-MX Coexistence - September 2008

8. ISO 20022 messages 82 messages 148 messages Payments, Cash and Trade
Payments Initiation (5)
Payments Clearing and Settlement (7)
Payments Exceptions & Investigations (14)
Cash Management (3)
Trade Services Utility (50)
Invoice Financing Request (3)
Securities, FX and Derivatives
Investment Funds
Securities Trade (30) and Settlement (16)
Reference Data (3) and Acct Mgmt (5)
Securities Management (7)
Cash Forecast (6)
Other Securities
Pre-trade / Trade messages (32)
Securities Transaction Regulatory Reporting (4)
Proxy Voting (8)
Issuers’ Agents Communication (22)
Foreign exchange and OTC Derivatives
Non-Deliverable Forwards (7)
Currency Options (4)
Generic (4)
82 messages
148 messages
176 UNIFI messages Candidate UNIFI messages
MT-MX Coexistence - September 2008

9. Current ISO 20022 development pipeline Securities, FX and Derivatives
Funds Processing Passport Report (2 messages) (SWIFT)
Settlement and Reconciliation (SWIFT)
Corporate Actions (SWIFT)
Triparty Collateral Management (SWIFT)
Securities Post-trade (Omgeo)
Market Claims/Transformations (Euroclear)
Securities Registration and Holder ID (Euroclear)
Securities Issuance (Euroclear)
Total Portfolio Valuation Statement (ISITC)
Alternative Funds (SWIFT) – not yet approved
MT-MX Coexistence - September 2008

10. Current ISO 20022 development pipeline Payments, Cash and Trade (and others)
Cash Management (+/- 28 messages) (SWIFT)
E-invoice (UN/CEFACT TBG5)
Change/Verify Account Identification (GUF)
E-Mandates (SWIFT)
Bank Account Management (SWIFT)
Creditor Payment Activation Request (ACBI)
ATM Interface for Transaction Processing and ATM Management (IFX)
Card Payments Exchanges (EPAS)
MT-MX Coexistence - September 2008

11. Coexistence – what is it?
MTs
(FIN)
MT 103
MT 502
MT 300
Etc…
247 MTs
MXs
(InterAct/FileAct)
pacs
setr
No equivalent
Etc…
230+ MXs X
MT-MX Coexistence - September 2008

12. Coexistence – current status
The MTs are not going away anytime soon
SWIFT will support customers through the coexistence period with additional products and services designed to make coexistence ‘easier’
A coexistence implementation plan was started in 2007, but community feedback indicates it may be too early for consensus on milestones and dates for many MTs
SWIFT remains fully committed to ISO for all standards development
MT-MX Coexistence - September 2008

13. Guidelines for message development
New business areas – MX
TSU
MTs not adequate – MX to replace MT
Proxy voting, Funds, E&I
Regulatory or infrastructure driver – Both MX and MT
Payment infrastructures, SEPA, T2S
No business case for MX development – MT, for now
Precious and base metals
MT-MX Coexistence - September 2008

14. Community feedback and case studies
Six cases studies for ISO implementation completed in the first half of 2008
No clear positive business case, 50/50 split between positive and negative business cases
Replacing existing messages usually results in a negative case, new implementations often result in a positive or neutral case
Other drivers often help ‘make the case’ (technology, reputation, customer demand)
Country and national member group feedback even more strongly polarised
Some countries want quick ‘migration’, others want no migration
Some communities want to continue using existing MTs and see no business case to replace them with new MX messages
Pockets of adoption for some business areas (SEPA, Funds, E&I, cash management), but no overall critical mass yet
MT-MX Coexistence - September 2008

15. Framework and improved approach
MT-MX Coexistence - September 2008

16. Overall coexistence framework
1. Prepare MX
2 . Introduce MX
3. Implement MX MT MT
MT/MX MX
Business case and rationale
Coexistence support + tools
MX development and piloting MX
Milestones, dates and length of phase to be determined by each MT or MT group, governed by users
Decision to build/use MX
MX live on SWIFT
MT removal
Decisions by Standards Committee (STC) and business committees (BPC and SSC)
MT-MX Coexistence - September 2008

17. Coexistence – improved approach
1. Prepare MX
2 . Introduce MX
3. Implement MX MT MT
MT/MX MX
Business case and rationale
Coexistence support + tools
MX development and piloting MX
Strengthen the fundamentals of ISO by re-focusing on the ‘core’ (models, repository, dictionary)
Reinforce our toolkit of products that support implementation, mapping and translation
Let the market ‘catch-up’ and allow each business area and community to move at its own pace, while providing guidance on syntax
MT-MX Coexistence - September 2008

18. Proposed timeline for Investment funds
Draft
1. Prepare MX
2 . Introduce MX
3. Implement MX MT MT
MT/MX MX
Business case and rationale
Coexistence support + tools
MX development and piloting MX
2004
End 2009
End 2011
MX messages go live
102 Key users must be ready to send and receive new MX messages
Dates to be confirmed
at December 2008
Board meeting
MT template messages are removed from the network
MT-MX Coexistence - September 2008

19. Proposed timeline for Exceptions & investigations
Draft
1. Prepare MX
2 . Introduce MX
3. Implement MX MT MT
MT/MX MX
Business case and rationale
MX development and piloting
Coexistence support + tools MX
3Q2006
End 2010
End 2011
MX messages go live
Key users must be ready to send and receive new MX messages
Dates to be confirmed
at December 2008
Board meeting
MT 195, 196, 295 and 296 are removed from the network
MT-MX Coexistence - September 2008

20. Why ISO for securities?
Cost of a double migration, ISO followed by ISO 20022
Payback of migration costs to ISO 15022
Cost of coexistence
Have ISO for core areas available in time for Giovannini
ISO should have a 10 year lifespan
Design ISO for easy coexistence with ISO 15022
MT-MX Coexistence - September 2008

21. What does this mean for the core clearing and settlement messages?
SWIFT to develop ISO syntax versions of the core clearing and settlement messages:
Ready for functional validation 2Q2009
Final documentation available January 2010
Live deployment Standards Release 2010
Ensure mapping between ISO and ISO 20022
Limit ISO functionality to that which is available in ISO and synchronise maintenance
Provide solution to support coexistence, including translation and directory
MT-MX Coexistence - September 2008

22. New products and tools
MT-MX Coexistence - September 2008

23. Standards Products Easing the implementation of ISO 20022
Priorities aligned with market initiatives, regulatory requirements and coexistence framework
SCORE
SEPA
Proxy Voting
Investment Funds
Cash Management
Smart Test Messages   
Translation Rules   
Translation Reference   
Standards Repository for Implementers     
MT-MX Coexistence - September 2008

24. Standards Products What and When
Current Status
Planned Delivery
Smart Test Messages
Translation Rules
Translation Reference
Standards Repository for Implementers
Live
See UHB
Live
See UHB
Beta
End 2008
Beta
End 2008
Current plan, subject to change
MT-MX Coexistence - September 2008

25. Standards Products Smart Test Messages
Ready-to-use, pre-filled messages (payload)
Customers use to test their internal applications
Inbound to the customer, simulating messages they received from a customer, counterparty or correspondent
Realistic business data content, not dummy data
Valid (no errors) and invalid (with errors) test messages
Customizable content – e.g., BIC, IBAN, etc.
SWIFT-provided documented test results
Fully documented “how to” user guide
Packaged for use with SWIFT solutions
Smart Test
Messages
MT-MX Coexistence - September 2008

26. Standards Products Smart Test Messages
SEPA Credit Transfers
SEPA Direct Debits
Proxy Voting
SCORE (payment initiation)
Smart Test
Messages
MT-MX Coexistence - September 2008

27. Standards Products Translation Rules
Comprehensive documents .pdf (human readable)
Downloadable today from swift.com
Provide guidance when implementing equivalent MT/MX
Organised by business area
Credit Transfers and Investments Funds already available, Cash Management planned for end October 2008
BIC
IBAN
ValueDate MX MT
MT-MX Coexistence - September 2008

28. Translation Rules Downloadable now on swift.com
BIC
IBAN
ValueDate MX MT
Translation Rules Downloadable now on swift.com
MT-MX Coexistence - September 2008

29. Standards Products Translation Reference
Used to test that an implementation conforms to the published translation rules
Sample framework including test messages, XSLT and Java
Licensed as a reference product (not supported for production use)
Updated for MT and MX standards maintenance
BIC
IBAN
ValueDate MX MT
SWIFT and partners will provide translations services and customisation tools
MT-MX Coexistence - September 2008

30. Standards Products Commercial Solutions
SWIFT Integrator
Partners with Message Data Services (MDS) label
IONA (Progress Software)
Trace Financial
Volante Technologies
All of the above are based on the Translation Rules provided by SWIFT and tested with the Translation Reference
BIC
IBAN
ValueDate MX MT
MT-MX Coexistence - September 2008

31. Standards Products Standards Repository for Implementers
Processable XML repository (ISO and SWIFT MX)
Financial dictionary (reusable)
Message definitions (structures)
Contains detailed information that is not in the final schemas, but currently only available in documentation or web query tool
Contain all MX messages of all solutions, whether ISO registered or not
Future functionality is foreseen for
Formal definitions for business message usage rules
Business process definitions
MT-MX Coexistence - September 2008

32. Q&A ?
MT-MX Coexistence - September 2008

33. Thank you
MT-MX Coexistence - September 2008

34. Back-up slides
MT-MX Coexistence - September 2008

35. Coexistence timeline Board agrees to use XML for new developments
ISO/TC68 starts ISO specification
Research on coex & translation, no central translation
Ultimate dominance of XML confirmed, demand for framework and clear roadmap
Rejection of central translation, development of initial roadmap
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
White paper introduces modelling, XML and basics of coexistence
XML roll-out to be in CUGs, no systematic migration
Launch of first new MXs, coex to be tuned to business areas
Development of migration framework and tools
Community pushback leads to proposal for a more flexible approach
MT-MX Coexistence - September 2008