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CCI via SWIFTNet Migrating you safely to Euroclear’s Single Platform

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1 CCI via SWIFTNet Migrating you safely to Euroclear’s Single Platform
This presentation gives and overview of SWIFT’s offering for connecting to Euroclear’s Single Platform through the Common Communication interface (CCI) London, July 2nd 2008

2 Chapter 3 – How can you use SWIFT for securities
Agenda 1 of 2 CCI update from Euroclear Charles Pugh, Senior Relationship Manager, Yves Lamote, Director, Project Manager Common Communication Interface, Demystifying ISO & 20022 Tom Alaerts, Business Analyst, Standards Initiatives, SWIFT CCI Implementation & CREST migration path Lut Buntinx, Manager CCI Project implementation, SWIFT Nigel White, CREST Service Manager, Key Clients Support, SWIFT Coffee break

3 Chapter 3 – How can you use SWIFT for securities
Agenda 2 of 2 Return from Coffee break SWIFT Infrastructure for CCI David Singh, Technical Consultant, SWIFT CCI via SWIFTNet – Your benefits Charles Robson, Account Director, SWIFT Integration challenges - Panel discussion Wrap-up and closing

4 Welcome to CCI and the challenge ahead
Chapter 3 – How can you use SWIFT for securities Welcome to CCI and the challenge ahead Charles Welham

5 Charles Pugh Yves Lamote
Euroclear Charles Pugh Yves Lamote

6 Euroclear Single Platform Common Communication Interface

7 Agenda Custody services in the Single Platform
Euroclear Group Consolidation strategy and projects What will we discuss today: Give you an update on what we are trying to do within the Euroclear Group How the things that we are rolling out are going to impact some of the services in a very positive sense for Euroclear Bank What are the changes in terms of communication, flexibility that we will be offering on the reporting side Last but not least we will cover how we will be migrating from the current situation to the new world And how will we support you during this migration process and what can you expect from the Euroclear side

8 Consolidation of markets within Euroclear Group
Customer Agent Access / Communication Common Communication Interface Euroclear UK & Ireland Euroclear France Euroclear Nederland Euroclear Belgium Euroclear Bank Contract / Relationship This slide shows the familiar business model, which, conceptually, hasn’t changed since it was proposed during 2002. It shows the client using the common communication interface to access either the domestic service or the full service, both of which use harmonised business processes on a consolidated platform. The intention is that, for a given function, the client will access that function in the same way, no matter which entity will execute the function. This similarity covers not just the message formats, but technical connectivity and business processes too. Service Domestic Service Full Service Central Banks & Payment systems Full integration of legacy systems and functionality IT infrastructure Single Settlement Engine

9 Timeline for platform consolidation Client impact
2006 2007 2008 2009 2010 CCI Single Gateway Early ISO Adoption SSE ESES SP Custody SP Settlement Harmonisation Technical only Euronext instruments Custody all Euroclear group markets Settlement all Euroclear group markets Here we see a high level plan for the implementation of the Business Model. The Single Settlement Engine was delivered in 2006 for Euroclear France and Euroclear UK and Ireland (formerly called CRESTCo) and in January 2007 for Euroclear Bank. The SSE is the first building block towards the Single Platform and concentrates on core settlement functionalities such as liquidity levels and managing securities transfers. ESES (which stands for Euroclear Settlement for Euronext-zone Securities) is the second phase is due for launch in November 2007 for the French market and in May 2008 for the Belgian and Dutch markets. ESES will provide the Euronext-zone CSDs with an integrated settlement solution and will support the Euronext Single Order Book. This phase will combine some infrastructure components of Euroclear France with strategic features of the Single Platform for settlement and custody. It will also prepare the way for the Common Communication Interface (CCI). The Single Platform, the third phase, will be launched in two steps: Single Platform Custody, in 2009, which will provide all Euroclear group CSDs and the ICSD with a common custody platform, harmonizing processes for corporate actions and meetings. CCI will then be the communication channel to use for Custody related operations. Single Platform Settlement, in 2010, which will provide a harmonized structure for settlement, payment and transaction management. At that stage, CCI becomes the only available communication channel for any type of operation as the Legacy systems will be phased out. Consolidation Settlement activity Euronext markets custody & settlement Custody on a single platform Settlement on a single platform

10 Objectives of harmonisation and consolidation in Europe
Markets are resolved to address fragmentation issue Benefits: Improved STP using ISO standards Reduction of costs and risks thanks to: Removal of paper processes Standardisation of practices Consolidation / simplification of platforms and processing systems

11 The role of Euroclear Group in addressing fragmentation issues
Result of the Euroclear Group market consultation Play leading role in supporting key market initiatives to remove Giovannini barriers (eg. ECSDA, …) Contribute to building a Single European Market: single, harmonised platform for corporate actions and meetings in Belgium, France, Ireland, The Netherlands and United Kingdom Reduce X-border transaction costs thanks to harmonisation of market practises

12 SP Custody Key improvements Euroclear UK & Ireland
Use of ISO formats and (Meetings) Harmonisation of Corporate Action processing in Euroclear UK & Ireland Classification and simplification of the CA’s Single Order of dates Introduction of interim securities for all distributions with options Cash distribution Entitlement reporting Single announcement for multiple accounts or per account Standing instructions Standardisation of CA processes Extended use of ISO, STP for input and reporting

13 CCI Principles CCI Migration 3rd Party Providers Support
Common Communication Interface CCI Principles CCI Migration 3rd Party Providers Support This section of the presentation introduces some of the key principles and features of the CCI, and looks at some of the implications in more depth.

14 CCI Features Three Channels
STP File Transfer (AutoFlow) Files of messages For bulk message exchange Parameters to trigger outbound files Format identical to messaging Screen channel (ScreenFlow) Mandatory for set-up and operator management Sole point of contact for smaller clients Back-up and exceptions for larger clients STP Messaging (AutoFlow) Individual messages Sent in real time Parameters to filter outbound messages STP channels (ISO15022 ISO20022) Messaging File transfer Screen interface Push Pull CCI Pull recovery The CCI offers three channels for communication. Which ones to use will vary on your volume of activity and automation you want to implement. The screen channel (now known as ScreenFlow) will provide access to: the full range of business functions, a certain number of administrative functions such as the setting up of operators. The screen will be the only way to use these administrative functions. Every client requiring direct access to the Single Platform will be required to have CCI screen channel capability. Smaller or low volume clients may find that the screen channel meets all their needs. Larger clients may use the screen channel as a back-up option in a business continuity scenario, or for exception processing. There are two STP channels (now known as AutoFlow): The AutoFlow Messaging channel will allow the transmission of individual messages in near real-time. The AutoFlow File Transfer channel allows the transmission of files containing messages. You can setup the trigger point of the transmission. One important point to note is that the format of the business messages within the files is identical to the formats used over the messaging interface. So your communications layer can keep formatting separate from transportation. You can send the same message either in a file or individually as a single message. The formats of the messages would be identical: only the transport mechanism would change. The next few slides look at some of the features of the screen channel.

15 CCI Features Network Providers
Client Network Euroclear group BT / SWIFT BT / SWIFT Network Provider gateway Network Provider gateway Single Platform

16 CCI Pricing CCI pricing components :
Reported items fees : cover the cost of the Euroclear reports Family Concept Sliding Scale Flat fee for ‘value added’ reports Network Provider fees Sender pays model : traffic sent is charged by the SMS provider Euroclear recharges SMS costs for reporting traffic Family concept: Aggregation of volumes of rep items for a client; across all network providers and communication channels (messaging, file transfer and screen usage);

17 CCI Principles CCI Migration 3rd Party Providers Support
Common Communication Interface CCI Principles CCI Migration 3rd Party Providers Support

18 CCI - Migration Challenges
Three Levels Of Change Connectivity Technical interfaces Network providers Migration facilitators Data Formats ISO Standards Broadly, there are three levels of change involved in the move to the Single Platform: Connectivity – the technical interface between the two systems (wires and sockets, so to speak). Data formats – the ISO standard formats of messages and files sent and received to and from Euroclear. Back office implementation – the way your Back office receives and treats the information sent and received to and from Euroclear. Back Office Harmonised processes Training

19 Rollout SP Custody / CCI and testing
Oct 08 Summer 09 2008 Q3 Q4 Q1 Q2 2009 Q3 Q4 Launch dates CCI gateway CCI ISO Validation = launch in test Participant Acceptance Test EB ESES EUI = launch in production ScreenFlow technical deployment CCI Single Gateway Production Testing facilities Now that you have acquired much more details about CCI, let’s focus on the different testing phases. The ISO Testing tool (starting on TBC) is a software that will allow our clients to validate their ISO messages against the rules implemented in the Single Platform. We will have a more detailed view on the tool later during the presentation. The Connectivity Testing phase implies that our clients have installed the CCI gateway at their premises and therefore can start doing some basic connectivity tests (basically from gateway to gateway, going through the provider’s respective networks). The network providers will assist and guide you during these connectivity tests. At a later stage (date To Be Confirmed) it will be possible to setup either an AutoFlow channel or a ScreenFlow Channel hooked up to the gateway and start sending business messages. These business messages will be validated by the CCI platform but not yet processed. The ScreenFlow application will be released as from October You can start deploying the ScreenFlow application within your organization then start connecting it via the CCI gateway to the Euroclear CCI environment. For example, ScreenFlow will be mandatory to setup Operators, Access Management and to create AutoFlow channels. More information about ScreenFlow functionalities is expected to be published on due time. In the course of summer 2009, a Participant Testing (PAT) Phase will start where our clients will have the opportunity to test the workflow of messages with the help of pre-defined scenario. That will allow you to perform a full end-to-end test between your back-office applications or ScreenFlows and CCI/SP. For Single Gateway candidates, testing facilities will be available as from October As from Q1 2009, the Single Gateway candidates, after having performed their test, can start going live with their Legacy ISO messages passing through the Single Gateway. N.B. All testing facilities in the same environment!!! Connectivity testing (CCI gateway) ScreenFlow (User & Subs. Mgt) and AutoFlow technical testing For all clients Permanent testing environment CCI / SP ISO syntax validation Functional Testing Additionally for CCI SG candidates CCI Single Gateway - Legacy ISO Testing Monitored Migration phases Analysis & Decision making Technical deployment phase PAT phase Functional implementation phase

20 CCI Principles CCI Migration 3rd Party Providers Support
Common Communication Interface CCI Principles CCI Migration 3rd Party Providers Support

21 Model 1 – Back-Office System Providers / Message Brokers
Contractual Agreement Contractual / Commercial Agreement Vendor EG Participants Euroclear Group Develops a back-office package Account Owner EG participants : Buy and integrate the back-office package

22 Model 2 – Service Bureaux
Contractual Agreement Contractual Agreement EG Participants Service Bureau Euroclear Group Account owners Operating the accounts owned by EG participants 4 potential levels of outsourcing : Management of the gateway (connectivity, security) Management of the channels (screen, STP) Management of the OAM Back-Office Management

23 CCI Principles CCI Migration 3rd Party Providers Support
Common Communication Interface CCI Principles CCI Migration 3rd Party Providers Support

24 Support Support from Euroclear Contact Q&A Service www.euroclear.com
Plenary and bilateral meetings Webinars (https://euroclear.webex.com) Documentation Contact Your Relationship Manager Euroclear will, of course, support you with a number of market-wide initiatives and documentation, or you can arrange a bilateral meeting through your relationship manager. There is also a wide range of documentation available on the Euroclear website. If you have a question, you can send it to the sp.connectivity address. Q&A Service

25

26 Demystifying ISO 15022 & 20022 for CCI
Tom Alaerts SWIFT Standards

27 Timeline for platform consolidation
2006 2007 2008 2009 2010 2011 CCI Single Gateway Early Harmonisation SSE ESES SP Custody SP Settlement Harmonisation Technical only Euronext instruments Custody all Euroclear group markets Settlement all Euroclear group markets Single Platform Custody (SPC): - Will be launched Q for Euroclear Bank and 2010 for CSDs (not clear yet whether all CSDs or one at the time). - Includes Issuer Agent (Q4 2009), ISO for corporate actions (Q4 2009), proxy voting (later in 2010 exact date TBC) but NO market claims. Single Platform Settlement (SPS): - Will be launched Q for Euroclear Bank, others will follow later. - Current plan is ISO but some FR and UK institutions using proprietary today might want to use ISO (Euroclear is currently organising a survey with its customers to better measure the interest in using ISO from the start. David Mellet suggests that SWIFT & Euroclear could co-operate on standards-related surveys.) - Includes Market Claims, Registration, Securities Issuance, Payments, collateral (Euroclear Bank participants might prefer ISO for the latter because they use MT 527 today but UK might go to ISO directly (TBC)). ESES (NL, FR and BE): - Will be launched end 2009. FR will continue to use proprietary; BE and NL will use ISO ISO syntax versions of the core clearing and settlement messages: - Ready for pilot SR 2009 - Live deployment SR 2010 Consolidation Settlement activity Euronext markets custody & settlement Custody on a single platform Settlement on a single platform Source: Euroclear

28 Standards for Euroclear CCI
Business area Business justification 15022 20022 Developer Co-existence support Issuing agent Done x v EoC New issuance Market claims Registration ?? Corporate actions SWIFT Settl & reconciliation Tri-party collateral Sec. ref data ? Proxy (v) Tax ??? Administration (Done) Cash Collateral CA Issuer Agent 22 messages Pass RA Quality Control Obtain SEG approval (3 month process) Market Claims and Automatic Transformations ISO reverse engineering of MT566 Eg Clearstream, US want to be able to use MT566-like message for claim execution Securities Issuance Inclusion of reference data Registration Accommodation of French participant flows

29 Chapter 3 – How can you use SWIFT for securities
The principles of ISO 15022 Information is identified and programmed once, but reused continuously Two concepts: Generic field Start and end of block fields

30 A typical ISO 15022 FIN message
Sender PEFIGB22 MT 502 (order to buy) Receiver BDAPGB22 :16R:GENL :20C::SEME//3455 :23G:NEWM :16S:GENL :16R:ORDRDET :16R:PRIC :90B::LIMI//ACTU/GBP25, :16S:PRIC :22H::BUSE//BUYI :22H::PAYM//APMT :98A::EXPI// :16R:TRADPRTY :95A::BUYR//PEFIGB22 :16S:TRADPRTY :36B::ORDR//UNIT/900 :35B:ISIN GB :16S:ORDRDET ISO is a good standard in that it is very predictable (unlike the SWIFT proprietary standard). For example: 20C always = reference 90a always = a price 98a always = a date What is a generic field? Used to describe groups of business data that are common throughout the messages They are then made unique by the addition of a qualifier, which gives a specific business meaning to the field Examples of generic fields: :19a: Amount :20a: Reference :22a: Indicator :36a: Quantity of Financial Instrument :90a: Price :95a: Party :98a: Date/Time 36B always = a quantity of financial instrument 95a always = party

31 The principles of ISO 15022 Start and end of block fields
Chapter 3 – How can you use SWIFT for securities The principles of ISO Start and end of block fields Message Type Sequence 16R Start of Block Set of Data Fields Start and end of block fields define the start and the end of a set or sequence of fields, that, from a business perspective, logically fit together. This enhances the approach of the message, improving maintenance by organising the data into natural groups. 16S End of Block

32 Euroclear message inventory
Complete overview, at the message level, of the messages available to clients on the Euroclear platforms, including legacy systems and the Single Platform The Message Guide identifies each message function on the Single Platform, explains its usage and identifies the correct ISO standard message to use The Migration Guide provides a comparison between the Single Platform message functions and existing proprietary and ISO messages on the various legacy systems, and then tracks the rollout of ISO messages in the SP. You will find it on the Euroclear website: To help you with understanding how to translate your existing Legacy messages into the new ISO ones, Euroclear has published a conversion table which is available on-line. You will find in there all existing Legacy messages type, for all markets covered by the Euroclear group, and their corresponding SIO standardized ones which will be used on Single Platform. During the course of june 2008, Euroclear will publish the CCI data exchange manual. This manual will permit our clients to define precisely the type of messages they will need to implement within their back-office systems. It will detail all ISO SP messages with their related fields. Source: Euroclear

33 SP Custody and CCI documentation Schedule
Single platform custody intro to the documentation at Issuance and issuer agent data exchange manual (ISO 20022) partly at May 2008 Migration to the CCI June 2008 Corporate actions – full service Corporate actions – domestic service – v2 (v1 is at ) Mandatory cash distributions – full service Single Platform Custody data exchange manual – full service and domestic service – v2 (v1 is at ) Source: Euroclear

34 What about Crest DEX standards?
Euroclear does not plan to specify official mapping/translation info, but will organise workshops explaining pain points. CREST ISO standard Data Exchange Manual: ISO only, for now – not yet for CCI Euroclear will NOT provide mapping for the six different syntaxes (E2A (FR), ESES CCI ISO 15022, CREST FT, CREST ISO, EUCLID, EB ISO) as sometimes not possible, eg, CREST sends a status msg with 2 fields to confirm; cannot be mapped to a confirmation msg, and very difficult. The Euroclear Messaging WG is looking at this. Instead Euroclear will clarify "painpoints" in the implementation of the new standards during workshops. Communications Working Group Met in December Next meeting: June Key issues: ISO for SP? Messaging Working Group Subgroup of CWG Messaging experts Focus on CA messages initially Met in April Discussed message examples Identified key ‘pain points’ Discussed DEX format

35 Training – getting proficient in ISO 15022
Classroom courses Securities settlement and reconciliation messages This 2-day course helps you to understand the SWIFT messages used for settlement and reconciliation and the related payments messages. Securities corporate action messages Learn to understand the ISO SWIFT messages used for corporate actions and the related payments messages. Understanding SWIFTNet Funds messages and flows Receive an overview of the SWIFTNet Funds solution and in-depth information on the related ISO messages. e-learning Quick start – SWIFT securities messages This module gives practical information and training on how to create ISO messages in a fast and simple way.

36 Implementing SWIFTStandards MT/XML
XML schemas representing MT messages Including sufficient metadata to parse and format the MT Software to convert from message in MT format to XML and back SWIFTStandards provides open source reference implementation, not licensed for production Vendors (including SWIFT) to provide supported implementations MT gains advantages of XML

37 The evolution of SWIFTStandards
Securities Other markets ISO 7775 (syntax = traditional FIN, such as MT 521, MT 500, …) Traditional FIN (e.g. MT 100, MT 202, …) ISO (syntax = enhanced FIN, such as MT 502, MT 54x, …) Traditional FIN (e.g. MT 103) This slide shows the evolution of the relationship between SWIFTStandards messages and the ISO message schemes. SWIFT started by defining its own series of messages in « traditional » FIN syntax. Several of them were thereafter contributed to ISO The first securities messages, implemented on the network in 1984, were the result of a joint SWIFT-ISO development: it gave birth to an ISO (7775) standard using the traditional SWIFT FIN syntax. ISO can be considered as a first step towards a more formal and business-centric message development approach using a unique and unambiguous list of business elements listed in a central Data Field Dictionary. With UNIFI (UNIversal Financial Industry), SWIFT will use the same methodology for all new developments whichever the market, aiming to a progressive cross-market convergence, at the pace of the community. UNIFI (ISO 20022) (syntax = XML, such as Investment Funds, Cash Reporting, Bulk Credit Transfers, …)

38 CCI via SWIFTNet Migrating you safely to Euroclear’s Single Platform
Lut Buntinx

39 Euroclear timelines – Migration per wave
2008 2009 2010 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Single Gateway Live ESES Single Platform ScreenFlow SP Custody Connectivity ISO Syntax validation SP Settlement Key stages: The Single Settlement Engine (SSE), which was fully launched in early 2007, has replaced the current group (I)CSD core settlement applications. Euroclear Settlement of Euronext-zone Securities (ESES) will provide clients of Euronext-zone market CSDs (Euroclear Belgium, Euroclear France and Euroclear Nederland) with an integrated settlement solution for stock exchange and over-the-counter activities. Early harmonisation and the Single Gateway will provide various harmonisation and technical benefits to clients in advance of the Single Platform launch. Finally, the Euroclear Single Platform will be implemented by service, with two main phases being delivered gradually: - Single Platform Custody as of Q4 2009: providing harmonised group custody services - Single Platform Settlement as of 2011: providing harmonised group settlement services, including matching and life cycle management elements = Start date for testing facilities = Full Functional Test Phases (PAT) = Live Date

40 Customers migration questions
What do I need to do and by when? How do I keep impact on my back-office integration limited to ensure minimal disruption? Can I use this migration to improve current automation levels? How do I keep my communication infrastructure investments and project management cost to a minimum? The customer will be faced with a number of important challenges while preparing for migration: Keep new infrastructure investments low, ie lines, hardware, software (costs low); VERY important: keep integration with back-office as untouched as possible (costs and risk low) Keep project management limited, make a less changes as possible (costs and risk low); Chosen messaging solutions (not just network) must be secure and reliable (risk low); With the big bang approach per business/CSD, you need to ensure you are ready on time; there will be no opportunity to continue using old systems once migrated (risk low, customer satisfaction sustained); Is there an opportunity to improve quality of workflow (profitability up)

41 Migration to CCI the 7 step Approach
Regional Sales Approach 31 Dec 2008 Q Analysis/ Discussion Awareness Decision eLOI Global Deployment Technical Design Implementation Testing Live e-orders

42 Migration to CCI the 7 step Approach
Regional Sales Approach 31 Dec 2008 Q eLOI Awareness Analysis/ Discussion Decision Global Deployment Technical Design Implemen- tation Testing Live Global Deployment Programme monitored by SWIFT You will be reminded of certain milestones You will be invited to perform certain tasks (e.g. WSHA Installation/GUI installation, connectivity test, ISO test etc against certain deadlines The SWIFT support team will be there for technical assistance A SWIFT migration team will be there to give you guidance for your project execution and help you with your ordering process WSHA installation services can be obtained from SWIFT

43 Migration to CCI the 7 step Approach
Technical Design Technical design for future SWIFT infrastructure needs for the CCI E-orders: Technical design and E-ordering Service subscriptions WSHA WSHA installation services possible infrastructure upgrades

44 Migration to CCI the 7 step Approach
Installation of WSHA Installation of ScreenFlow GUI Implemen- tation installation of all other infrastructure upgrades (if requried) RMA or certificate exchange ScreenFlow root operator logons Installation and preliminary testing OAM (ScreenFlow creates AutoFlow operator) Connectivity testing for all channels Upgrade of ScreenFlow application before PAT ISO validation testing: As of Q – testing environment - 3 to 4 month duration Mandatory for STP users Connectivity testing must be achieved before entering in ISO testing

45 Migration to CCI the 7 step Approach
PAT: Participant’s Acceptance Testing Testing SWIFT will monitor the testing activity Euroclear will run the PAT: - SP Custody business screens in ScreenFlow Full Functional testing SP Custody core processing of Business data (EB only in the first stage, EUI after) - Testing based on scenarios - Scenarios described in advance (Q2 2009) - Registration required - Participation to testing monitored by Euroclear

46 Migration to CCI the 7 step Approach
SWIFT will monitor the life traffic activity Live Euroclear will require the go-live for the custody business on the Single Platform as from Q4 2009 Custody business On the Single Platform Euroclear Bank clients first ESES and EUI clients will follow.

47 Support - More information
F.A.Q & Technical specifications F.A.Q & Implementation guide Questions? -> e-LOI on for best support

48 CREST, the CCI migration path
Nigel White London, 2nd July 2008

49 SWIFT’s solution Keep it simple
Existing hardware : no mandatory upgrades required Existing SAA/SAS/SAG : can also be used for CCI Existing service levels : remain unchanged during CCI migration

50 Migration stages Stage 1 : install Web Services Host Adapter onto SAS/SAG Facilitates connectivity via CCI GUI (Euroclear product) CCI GUI required for connectivity testing & screen flow traffic Installation Oct 08 to Mar 09

51 Migration stages Stage 2 : SAA upgrade options
SAA 6.0 Support continues SAA 6.3 Supports FileAct interface for CCI back office traffic, also supports MQHA SAA 6.2 is NOT qualified for CREST

52 Advantages of SWIFT’s CCI solution
Current CREST GUI and CCI GUI operations can coexist Current file transfer operations (DEX & ISO15022) can coexist with CCI FileAct operations

53

54 SWIFT Infrastructure for CCI
David Singh London, 2nd July 2008

55 CCI project objectives
Formats Channels Platforms 1. Formats: ISO 15022/20022 for all in/out messages ISO as of mid-2010 2. Messaging Channels: Screenflow for GUI – Pull mode (requires WSHA on SAG or SAS) OAM+Report/Subscription first, then OAM++Report/Subscription+SPC No local database Can work offiline CCI Screen-SAG-WSHA security=SSL+LAU Autoflow for STP – Push mode: Messages or Files Messages = FIN or InterAct Files = batched messages with Gionannini header 3. Single Platform Accessed by CCI Gateway (or Single Gateway (SAG) which supports legacy & ISO formats) Project Phases: - Analysis & Decision Making Technical Deployment Functional Implementation PAT (participant acceptance testing)

56 CCI formats & channels AutoFlow File Transfer via SWIFTNet FileAct
Euroclear Bank Euroclear UK&Ireland Euroclear France Euroclear Nederland Euroclear Belgium STP channel file transfer AutoFlow File Transfer via SWIFTNet FileAct Store & Forward (push mode) EUCLID FT CREST FT E2A Not applicable FTP Not applicable Screen- based access ScreenFlow via SWIFTNet (Screen GUI provided by Euroclear) (pull mode) BB-GUI e-RGV (ESES) (ScreenFlow optional) Direkte Verbinding eRGV (ESES) & ScreenFlow SATELIT EUCLID PC & EUCLID Server AutoFlow Messaging via InterAct (for ISO messages) via FIN (for ISO messages) (push mode) CREST FT E2A Not applicable Your institution Not applicable STP channel messaging Pull mode = query/response FIN FIN (reporting only) FIN (ESES) optional FIN (ESES) FIN FIN

57 CCI platforms Back Office Applications NEW channels ScreenFlow channel
WSHA NEW CCI Screen  AutoFlow  channels CREST Interface EUCLID Server/PC eRGV & E2A FIN/MX Interface File Transfer Interface ScreenFlow  channel SWIFTAlliance Gateway CCI compliant CCI compliant CCI compliant This slide shows in animation how you will introduce a new element in your SWIFTNet infrastructure, will be able to re-use your existing infrastructure and can dismantle your EUCLID PC/Server after the migration is completed. Re-use existing infrastructure: Network components (lines, cables, routers, etc) Hardware (platforms, HSM, disks, etc) Software (SNL, SAG or SAS, CBT, monitoring software, etc) Use of existing integration with back-office No change in operating procedures (eg, SO) No change in existing contractual relationships Infrastructure and project mgmt cost low ‘Migration’ risk low HSM SWIFTNet Euroclear Single Platform Euroclear UKI Euroclear BE Euroclear NL Euroclear Bank Euroclear FR

58 Single Platform Settlement
SWIFTAlliance Gateway is already a CCI Gateway & gives a transparent migration WSHA ScreenFlow EuroclearSingle Platform AutoFlow Messaging ISO FIN ISO SWIFTNet InterAct euroclear.autoflowmsg AutoFlow File Transfer SWIFTNet FileAct (ISO) euroclear.autoflowfile ScreenFlow euroclear.screenflow ECLIBEBB ECLNBEBB ECLNFRPP ECLNGB2L ECLNNL2A Client CCI Gateway Today File Interface = SWIFT Alliance Gateway FIN/MX Interface SWIFTNet HSM Euroclear Legacy Platform FIN - ISO15022 SWIFTNet InterAct SWIFTNet FileAct ScreenFlow (ESES) euroclear.cci SWIFTNet Browse MGTCBEBE ESESBEBB ESESFRPP CRSTGB2L ESESNL2A Legacy Interface Clients gain from re-using existing and proven components, such as connections, interfaces, security, back-office applications, and procedures. This facility substantially reduces development and operational costs, risk, and implementation time. SWIFTNet and its Single Window concept enable clients to re-use the same interface and communication channel that the clients already use for other business areas (that is, for SWIFTNet services). The concept of the SWIFT Single Window through SWIFTAlliance Gateway matches onto Euroclear’s Single Gateway concept: The SWIFTAlliance Gateway is the Single Gateway to both the Single Platform business services as well as the existing legacy services. The SWIFT Single Gateway solution involves the deployment of ScreenFlow and the adopted AutoFlow services. The other Euroclear legacy communications remain unchanged. For ScreenFlow, Euroclear CCI Screen desktop application (provided by Euroclear) connects to the Web Services Host Adapter, which is part of the application interface of SWIFTAlliance Gateway. This connection enables the ScreenFlow application to manually exchange SOAP (HTTPS) messages with the Single Platform over a SWIFTNet infrastructure. Existing SWIFT clients can therefore re-use SWIFTAlliance Gateway with the new Web Services Host Adapter licensed component. The Web Services Host Adapter component is available on all SWIFTAlliance Gateway and SWIFTAlliance Starter Set 6.0 licences (SWIFTAlliance Starter Set as of third quarter 2008). AutoFlow Messaging is based on the SWIFTNet FIN (MT) and SWIFTNet InterAct (MX) messaging services. For access to AutoFlow Messaging, clients can use (or re-use) the SWIFTNet FIN or MX interface. This interface can be SWIFTAlliance Access or SWIFTAlliance Entry, or any other SWIFTNet FIN or MX interface that provides access to SWIFTNet FIN and SWIFTNet InterAct. AutoFlow File Transfer is based on the SWIFTNet FileAct messaging service, and supports the exchange of large volumes of data. For the transfer of files via AutoFlow FileTransfer, clients can use (or re-use) SWIFTAlliance Webstation for interactive or manual file transfer, SWIFTAlliance Gateway with either the File Transfer Automated (FTA) module or the File Transfer Integrated (FTI) module for an automated File Transfer solution, or any other application that supports the SWIFTNet FileAct protocol. SWIFTAlliance Gateway concentrates all business flows to the SWIFTNet-based services, using the proven SWIFTNet FIN, SWIFTNet FileAct, SWIFTNet Browse, and SWIFTNet InterAct protocols. SWIFTAlliance Gateway offers a set of adapters that enable the exchange of SWIFTNet messages with external applications. The Hardware Security Module (HSM) is used to calculate hardware-based PKI signatures on all SWIFTNet traffic. The SWIFT Secure IP Network is the underlying technical communication network that provides SWIFTNet connectivity for information exchange and for the operation of control measures. The SWIFT Secure IP Network uses multiple SWIFT Network Partners to connect users to the SWIFT Secure IP Network backbone access points. = Single Platform Settlement SAB Single Gateway Single Gateway Live

59 Value proposition for an existing SWIFT customer
Back-office applications Your current SWIFT infrastructure re-used for AutoFlow Messaging & AutoFlow File Transfer FIN today = “CCI FIN” Check: Interface support of IA-FA S&F (for ISO 20022) Files to be in Giovannini rulebook format Optional FTA/FTI (SAG) available for AutoFlow File Transfer Web Services Host Adapter (WSHA) for ScreenFlow S&F interface FIN-IA-FA Screenflow AutoFlow WSHA Re-use existing infrastructure: Network components (lines, cables, routers, etc) Hardware (platforms, HSM, disks, etc) Software (SNL, SAG or SAS, CBT, monitoring software, etc) Use of existing integration with back-office No change in operating procedures (eg, SO) No change in existing contractual relationships Infrastructure and project mgmt cost low ‘Migration’ risk low SWIFTAlliance Gateway HSM SWIFTNet

60 Value proposition for a new SWIFT customer
Direct connectivity: SWIFTAlliance Starter Set complemented with WSHA for ScreenFlow (Q4 2008) Optional SWIFTAlliance Access/Entry for AutoFlow Messaging Enabled for ‘manual’ AutoFlow File Transfer via SWIFTAlliance Webstation (SAB) Back-office application SWIFTAlliance Webstation and/ or SWIFTAlliance Access/Entry Screenflow AutoFlow Indirect connectivity: Through Service bureau Tailor-made integration Service Bureau Qualification program WSHA SWIFTAlliance Starter Set HSM SWIFTNet

61 Value proposition for resilience
Back-office applications Back-office applications SA-Access - Messages - Files SA-Access - Messages - Files Screenflow Screenflow AutoFlow AutoFlow WSHA WSHA Re-use existing infrastructure: Network components (lines, cables, routers, etc) Hardware (platforms, HSM, disks, etc) Software (SNL, SAG or SAS, CBT, monitoring software, etc) Use of existing integration with back-office No change in operating procedures (eg, SO) No change in existing contractual relationships Infrastructure and project mgmt cost low ‘Migration’ risk low SA-Gateway SA-Gateway HSM HSM SWIFTNet

62 SAG - Web Services Host Adapter (WSHA)
Available on all SWIFTAlliance Gateway (SAG) licenses, including SAS (as of Q3 2008) Ordering through SWIFT ordering channel, or through as of Q3 2008 SAG patch for CCI (Ready for ScreenFlow testing) Qualified on SWIFTNet Rel 6.0 & Rel 6.1 Allows communication with Web services using SOAP Converts SOAP into SWIFTNet traffic Re-usable for other Web services solutions

63 SAG - WSHA features Configured as other Host Adapters (RAHA, MQHA) via SAG Message Partners CCI ScreenFlow defined as Client application Secure the connection between CCI ScreenFlow & WSHA SSL LAU Firewall settings between CCI ScreenFlow & SAG Additional port to be configured Easy to configure & integrate

64 SWIFTSupport World-class customer support
24 hours/day, 7 days/week, 365 days/year By telephone & over the Internet To all SWIFT users worldwide Follow-the-sun model Local language capabilities SWIFT won two Customer Relationship Excellence (CRE) Awards: ‘Global Support Services of the Year’ ‘CRM Director of 2005’ honours for Brian Haughan, SWIFT’s Head of Customer Operations and Member of Executive Committee.

65 CCI via SWIFTNet Your Benefits
Migrating you safely to Euroclear’s Single Platform Charles Robson Account Director Broker Dealers

66 Mastering the challenge

67 The SWIFT value proposition
Cooperative Message Validation Real Single Window Reliability Availability One-Stop-Shop Security Consultancy Services Training & Education Testing & Qualification service 1 level of support for all Customers

68 CCI via SWIFTNet Where is the biggest Challenge in this project?

69 Where is the biggest Challenge in this project?
Issuing Agent Registrar ISO 20022 / DEX ISO 20022 / DEX CSD ISO 15022 / Proprietary Broker/Dealers Proprietary Proprietary Proprietary Exchange ISO 15022 / Proprietary Data Provider Custodians ISO 15022 / Proprietary

70 CCI via SWIFTNet - Custody phase (SPC)
Receiving a MT564 from Euroclear UKI or Euroclear Bank is NO DIFFERENT from a receiving a MT564 From your sub custodian/ Agent

71 CCI via SWIFTNet Corporate event sequence – Dividend/INTR
EUI Announcement Entitlement Confirmation Record Date Pay Date Mandatory MT564 MT564 MT566 Account Owner / Participant

72 CCI via SWIFTNet Corporate event sequence – Share Split
EUI Announcement Eligibility Instruction Status Entitlement Confirmation Response Deadline Pay Date Record Date CHOS VOLU MT564 MT564 MT565 MT567 MT564 MT566 Account Owner / Participant

73 Recommendations on reducing operational costs by:
CCI Business Assessment Programme Leveraging SWIFT’s Standards and Business Know How Cost-benefit analysis for the different channels (AutoFlow Messaging, FileTransfer, ScreenFlow) Recommendations on reducing operational costs by:  Optimizing your operational efficiency (STP)  Choosing the most appropriate & cost-efficient channel for each of your business flows Detailed mapping of your current flows with different Euroclear entities A readiness assessment including: Connectivity, infrastructure & integration requirements Mappings & solutions for any translation issues

74 CCI via SWIFTNET Commercial rules of engagement
No Contract / No Termed Commitment CCI via SWIFTNet is a standard SWIFT Service No Gold / Sliver / Bronze Support SLA All Clients receive Premium SWIFT Support SLA as standard

75 CCI via SWIFTNet Key Financial Figures
In addition for 2007 Generated €57 million in savings for customers = Every SWIFT Customer received a 15% traffic rebate In 2006 SWIFT published their SWIFT2010 strategy One obligation to its members was to reduce messaging fees by 50% by 2011. Since 2006 fees have been lowered by 23% (excluding any rebates). Further 27% discount still to be applied by 2010.

76 CCI via SWIFTNet Key Financial Figures
MT597 (Fin Bulking) statement of holdings (MT535 – MT537), confirmations (MT544 – MT547) status reports (MT548, MT578) Fixed Fee Plan for Global Traffic Tier 5 & above

77 CCI via SWIFTNet WSHA Key Financial Figures
WSHA is not CCI exclusive SOAP host adapter for any application WSHA licence is per SAG Licence (9 instances) No Limit on Number of CCI Gui connections to WSHA

78 Web Service Host Adapter (WSHA)
SAG BAND ONE OFF FEE ANNUAL S&M SAG Automation -2 $3,400 $1,700 SAG WebStation Concentration Single Window Band -1 $3,720 $1,860 $4,000 $2,000 1 $4,280 $2,140 2 $4,640 $2,320 3 $5,000 $2,500 4 $5,400 $2,700 5 $6,000 $3,000 6 $6,560 $3,280 7 $7,200 $3,600 8 $8,040 $4,020 9 $8,800 $4,400 10 $9,600 $4,800

79 SWIFTNet Tried & trusted v. New and Unknown?
In 30 years not a single secure message corrupted, misrouted or lost 24/7 Support service is included at no additional fee 82 Market Infrastructures connected to SWIFT 8,332 institutions connected to SWIFT

80 SWIFTNet Tried & trusted - 99.999% Availability

81 Making financial messaging easy, safer and less costly

82 Panel Discussion

83 Chapter 3 – How can you use SWIFT for securities
The Panellists David Pilbeam Northern Trust Sharon Ilett Mizoho Trust Ewan Scott Checkfree Bob Humphries Jarrive Kevin Gidden SWIFT

84 Q&A


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