This years Sibos in Osaka, Japan, will be key for SWIFT as the organization increasingly targets Asia Pacific amidst increased inbound and outbound investment activity in the region.
According SWIFT, numbers are on track for this years event, and the location has not deterred Westerners from making the long-haul trip. One year after it was announced that TARGET2-Securities (T2S) would be delayed and amidst a series of draft proposals to regulate OTC derivatives, central securities depositories (CSD) and bringing the world in line with a T+2 settlement cycle, securities services providers have high hopes that this years Sibos will put minds at rest as to some of the costs involved in complying with regulation and how the business models may have to change.
Alan Cameron, head of Client Segment Broker Dealer & Investment Banks, BNP Paribas, says that given the constrained conditions facing securities services providers since the crisis he expects to find out more about what the players are going to do to their businesses to adapt to the new medium. The other good thing about Sibos is that you learn things you werent expecting to learn, says Cameron, in reference to the Sibos networking events. The most valuable stuff is not the sessions but what you hear in the coffee rooms when you bump into people.
Click here to watch Cameron discuss Sibos on GCTV.
In addition to the networking opportunities presented at Sibos, high on Camerons agenda are the Securities Market Infrastructures Forums on day one. (Click here for GCs recommendations for sessions to attend on day one of Sibos, which include the infrastructures sessions.) Its one of the best, says Cameron of the infrastructures sessions. Its a particularly good one right now because the infrastructures are at a pivotal point in their development, not just in Europe where we have so many things going on in Europe but also in Asia.
Arun Aggarwal, managing director of SWIFT in the U.K., believes regulatory-driven changes are at the top of the agenda at this years Sibos. In addition, were going to be seeing a lot of interest in the general securities post-trade environment and how do you get efficiency, cost reduction, risk mitigation and compliance in the post-trade environment.
Click here to watch Aggarwal discuss Sibos on GCTV.
SWIFT is preparing to make a number of announcements at Sibos, including an update on its T2S connectivity solution, which Aggarwal says has been progressing well. Well provide a range of services to help organizations understand the impact of T2S from a consultancy services perspective and help them to go down into a level of detail on what they need to implement to make the changes, he says. On the standards that are required to make the changes, we have some tools and services called MyStandards, and again we see a lot of uptake there. And on the post-trade environment, weve embarked on a major investment to upgrade our technology solution.
SWIFT is also expected to announce a good take-up of electronic trade confirmation settlement messages in the securities and treasury industries, particularly in local trade matching among the buy side and sell side. The second part of post trade is our matching solution, Aggarwal says. We have our matching platform for treasury and securities, and again, that is going to undergo a significant amount of investment, and the other aspect is that we are to spread the range of services on that platform.
Amidst dwindling revenues for the securities services industry, Aggarwals hope for this years Sibos is that the industry hears more about how to cope with the regulatory challenges. A large part of that is how do you use collaborative industry solutions to these challenges? That will be a key talking point and will be there next year. This is not a one-year challenge, but a two-to-three-year challenge.
According to Tim Wood, head of client solutions at RBC Investor Services, the securities industry will focus on three topics at this years Sibos: The first one is regulation and the impact thats having and will have on our industry. Secondly, costs and the increasing pressure on all of us to reduce costs. And lastly is technology, because through technology thats how we will be able to address the first two problems of costs and regulations.
Click here to watch Wood discuss Sibos on GCTV.
Wood is likely to attend the T2S sessions at Sibos. (Click here for GCs recommendations on sessions to attend on day two of Sibos, which include T2S.) What Im interested in is how the people in those sessions will deal with the implementation of T2S, the costs associated with T2S and the timing of T2S, Wood says. If we go back to the original business case, which was based around cost effectiveness and efficiency, I wonder how that stacks up today versus the original business case. So its important for us to get some answers around the implementation, around the costs and the timing. The second one Im interested in, and it would be a perfect opportunity being in Japan, is to hear about how Asia continues to develop and how that impacts the securities business, but also how we can make the most of that globally with our clients and with our business partners.
Wood sees this year as being a particularly critical one for this years Sibos. Much of the topics and the subjects people are talking about are beginning to come to fruition, so this is the year for making some critical decisions, because next year some of those regulations will come into place. So instead of talking about what will be happening, well be able to talk about what has happened and what those outcomes are.
I think by the time we get to [Sibos] Dubai [in 2013], the securities industry will have had a much more mature approach to regulation and legislation and make better use of some of the technology thats become available.
Janet Du Chenne