The Financial Services Club Clearing & Settlement Working Group Plenary, July 2012

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3. CAS-WG
The Clearing & Settlement Working Group (CAS-WG)
• A WORKING GROUP
• Interpretation of Regulatory Change on Clearing & Settlement
Infrastructures the City (and EU/Global)
• Liaison with Regulatory Authorities
• Technical infrastructure focus
• The MiFID Forum

4. CAS-WG
• Subject Groups
– Risk Subject Group Chair: Paul Young, Associate Director for Business
Risk Services, Grant Thornton
– Market Infrastructure Subject Group Chair: Kathleen Tyson-Quah of
Granularity Ltd
– Standards Subject Group Chair: Virginie O’Shea, Lead Analyst with
Aite Group
– Regulations Subject Group Chair: Rory Webster, Director with
CapitalTrack Ltd

5. Agenda
• Update from the Risk Subject Group
– Shaun Cooke, Co-Chair
• Update from the Market Infrastructure Subject Group
– Kathleen Tyson-Quah, CEO of Granularity and Chair
• Panel Discussion of EMIR
– Robin Poynder, Thomson Reuters
– Peter Randall, Equiduct
– Kathleen Tyson-Quah, Granularity
• Break (15:30)

6. Agenda
16:00
• Update from the Standards Subject Group
– Virginie O’Shea, AITE Group and Chair
• Update from the Regulations Subject Group
– Rory Webster, CapitalTrack and Chair
• Panel Discussion of LEIs
– Graeme Austin, ISITC Europe
– James Whittle, ISO
– Richard Young, SWIFT
• Close (17:15)

7. Panel Session 1:
The implications of the European Commission consultation
paper regarding OTC Derivatives and Clearing

8. EMIR
• Reduction of counterparty risks by:
– Defining the framework for the application of the clearing obligation;
– Specifying the risk mitigation techniques for OTC derivatives not
centrally cleared; and
– Laying down the requirements for the application of exemptions to
non-financial counterparties and intragroup transactions

9. EMIR
• Safe and resilient CCPs by:
– A comprehensive set of organisational, conduct of business and
prudential requirements for CCPs

10. EMIR
• Increased transparency by:
– Specifying the details of derivatives transactions that need to be
reported to trade repositories;
– Defining the trade repositories’ data to be made available to relevant
authorities; and
– Setting the information to be provided to ESMA for the authorisation
and supervision of trade repositories.

11. European Market Infrastructures Regulation
• Issued: 25th June 2012
• Open Meeting: 12th July 2012
• Consultation Closes: 5th August 2012
• EU Endorsement: 30th September 2012

12. Panel Session 1:
The implications of the European Commission consultation
paper regarding OTC Derivatives and Clearing
• Robin Poynder, Head of Regulation, Marketplaces, Thomson
Reuters
• Peter Randall, CEO, Equiduct
• Kathleen Tyson-Quah, CEO, Granularity Ltd

14. Agenda
16:00
• Update from the Standards Subject Group
– Virginie O’Shea, AITE Group and Chair
• Update from the Regulations Subject Group
– Rory Webster, CapitalTrack and nominated Chair
• Panel Discussion of LEIs
– Graeme Austin, ISITC Europe
– James Whittle, ISO
– Richard Young, SWIFT
• Close (17:15)

15. CAS-WG Standards
Chair Virginie O’Shea
(post-trade technology analyst at Aite
Group)

16. Too many cooks?

17. Standards Group Agenda
• To highlight work that is currently ongoing within the
industry around data standards and market practices in the
post-trade space
• To identify the common points of interest/pain within these
groups and facilitate communication across groups (buy-
side/sell-side etc) – reduce duplicative work
• To examine how all of this work will impact the clearing and
settlement lifecycle as a whole – are we pushing risk
further down the process?

18. Don’t ignore what’s going on around
you…look at the bigger picture.

19. Aims
• Tracking industry standards and market practices
progress – living document
• Identify areas of common interest
• Map to clearing and settlement lifecycle – where
are groups missing a trick?
• Which data standards are currently being used by
the incumbent market infrastructures?

20. Keeping in mind ESMA’s trade
reporting proposals
• ID standards: Mention of LEI, BIC and BEI;
unique trade identifier; unique product ID
• Clearing – market practice implications
• Trade repository reporting market practices

21. Areas of Focus
Topics closest to the top of your agendas that we
should focus on initially:
• New data standards – LEI, UPI, USI, UTI etc
• Messaging standards – FIX, ISO, FpML etc
• Market practices for C&S process-
allocation, confirmation, affirmation, settlement
, low tech clients, reconciliation

22. • Regulatory influence – which pieces of regulation
can we have a material impact upon?
• Points of interaction between clients and firms –
how do we change downstream issues? Can
standardise internally but point of entry remains
a problem
• Cultural issues internally – raising the profile of
these standards issues for C-level
• Global dynamics – are we on the same page?

23. Regulations of interest
• MiFIR/MiFID II
• EMIR
• CSD Directive
• Securities Law Directive
• Dodd-Frank
• Solvency II (for buy-side)
• FATCA
• Basel 2.5 and III
• Financial stability/living wills regulation

24. Next steps
• Which pieces of regulation can be influenced?
• Where are market practices lacking? Review common
areas of focus across working groups
• What can be learned from other markets?
• How do we make post-trade teams’ lives easier?
• Contributions to the living document and priority list
• Keeping an eye on infrastructure developments…

25. FSB’s List of Trade Repositories
FX
Interest rate Credit Equity Commodities
Derivatives
DTCC DDRL (U.K.) DTCC-EFETnet DTCC-SWIFT-DDRL (U.K.)
(Netherlands)
DTCC-WT (U.S.) DTCC DDRL (U.K.)
Regis TR (Luxembourg) Regis TR (Luxembourg)
Regis TR (Luxembourg)
HKMA (Hong Kong) HKMA (Hong Kong)
DTCC DDR (U.S.) Regis TR (Luxembourg) ICE Trade Vault (U.S.)
DTCC DDR (U.S.) DTCC DDR (U.S.)
DTCC-GTR (U.S.)
ICE Trade Vault (U.S.) ICE Trade Vault (U.S.)
ICE Trade Vault (U.S.) DTCC DDR (U.S.)
Reval (U.S.) Reval (U.S.) Reval (U.S.)

26. Agenda
16:00
• Update from the Standards Subject Group
– Virginie O’Shea, AITE Group and Chair
• Update from the Regulations Subject Group
– Rory Webster, CapitalTrack and nominated Chair
• Panel Discussion of LEIs
– Graeme Austin, ISITC Europe
– James Whittle, ISO
– Richard Young, SWIFT
• Close (17:15)

27. Panel Session 2:
The market implications of LEIs (Legal Entity Identifiers) with
the G20 requirement for a central repository
• Graeme Austin, ISITC Europe
• James Whittle, ISO
• Richard Young, SWIFT

28. CAS-WG
• Subject Groups
– Regulation
– Risk
– Standards
– Market Infrastructures
• If you want to join a Subject Group, sponsor the CAS-WG or
more on the Financial Services Club
– email: events@fsclub.co.uk or admin@balatroltd.com
– tweet: @FSClub
• Next plenary meeting planned for September 2012