recent developments in securities settlement systems: challenges for emerging markets
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Recent Developments in Securities Settlement Systems: Challenges for Emerging Markets. Global Payments Week 2008 Vienna, Austria September 9 th -12 th Mario Guadamillas The World Bank. Legal framework (more complex in a global environment) Protection of custody arrangements - PowerPoint PPT PresentationTRANSCRIPT
Recent Developments in Securities Settlement Systems: Challenges for Emerging Markets
Global Payments Week 2008Vienna, AustriaSeptember 9th-12th
Mario GuadamillasThe World Bank
Legal framework (more complex in a global environment)
Protection of custody arrangements
Risks policies and procedures (beyond DvP model)
Operational issues (STP, Resilience and BCPs)
Governance (more complex in a global environment)
Lack of transparency (procedures/risks)
Access (sometimes to the payment system)
Lack of integration between payments and securities settlement systems
Regulation and oversight (lack of effective cooperation)
Challenges for Emerging Markets(from Regional Initiatives and FSAPs)
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Findings from the Global SurveyData for all countries surveyed. Detail by level of income and Region in the detailed publication available in www.worldbak.org/paymentsystems
A specific public sector agency regulates
securities markets
Securities market law applies to all securities traded in the country
Securities market law applies to securities
issued by private firms only
Countries # % # % # %
Worldwide totals (142 countries)
110 77% 73 51% 48 34%
• Legal and Regulatory Framework
Source: 2008 World Bank Global Survey on Payment and Securities Settlement Systems
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Findings from the Global Survey
• Participants and Custody Arrangements
Only commercial banks are direct participants in the CSD (for central bank operated)/Only
broker-dealers are direct participants in the CSD (for
privately operated)
Beneficial owners are identified at the individual level in
the CSD
Beneficial owners not identified at the individual
level in CSD, but direct participants
must segregate
Central Bank-operated systems # % # % # %
Worldwide totals (61 systems) 25 41% 22 36% 32 52%
Private Sector operated systems
Worldwide totals (87 systems) 20 23% 50 57% 32 37%
Source: 2008 World Bank Global Survey on Payment and Securities Settlement Systems
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Findings from the Global Survey
Dematerialization or immobilization of
securities in depositories largely
accomplished
There is a single securities
depository for all types of securities
Two or more depositories, each handling
specific types of securities
Two or more depositories, each handling
all types of securities
Countries # % # % # % # %
Worldwide totals (142 countries)
94 66% 50 35% 56 39% 9 6%
• Securities Depositories
Source: 2008 World Bank Global Survey on Payment and Securities Settlement Systems
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Findings from the Global Survey• Main Settlement Features
Rolling settlement
cycle of T+3 or shorter is used for all securities
trades
CSD has a real-time interface with the RTGS
Model 1 DVP is
used
Model 2 DVP is
used
Model 3 DVP is
used
Guarantee fund or other mechanism
ensures settlement in
case of default
Central Bank-operated systems
# % # % # % # % # % # %
Worldwide totals (61 systems) 36 59% 37 61% 37 61% 5 8% 7 11% 8 13%
Private Sector operated systems
Worldwide totals (87 systems) 77 89% 43 49% 47 54% 30 34% 27 31% 41 47%
Source: 2008 World Bank Global Survey on Payment and Securities Settlement Systems
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Findings from the Global Survey• Regulation and Oversight of Stock Exchanges and CSDs
Securities regulator is empowered to
license and supervise all stock
exchanges
Securities regulator is
empowered to license and
supervise all CSDs
Securities regulator
shares responsibility
with the central bank
for SSS oversight
Exchanges have the status of
SRO
Private CSDs have the status of SROs
Countries # % # % # % # % # %
Worldwide totals (142 systems)
109 77% 88 62% 64 45% 43 30% 30 21%
Source: 2008 World Bank Global Survey on Payment and Securities Settlement Systems
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Findings from the Global Survey• Resilience and Business Continuity
Source: 2008 World Bank Global Survey on Payment and Securities Settlement Systems
Routine procedures
are in place for periodical data back-
ups
Data storage media kept
in sites other than main processing
site
Back-up servers
have been deployed at
the main processing
site
A fully equipped alternate
processing site exists
Operator has
documented a formal
BCP - Business Continuity
Plan
BCP includes procedures
for information
dissemination and for
crisis management
Business continuity arrangements are regularly tested
Central Bank-operated systems
# % # % # % # % # % # % # %
Worldwide totals (61 systems) 56 92% 51 84% 43 70% 36 59% 42 69% 41 67% 40 66%
Private Sector operated systems
Worldwide totals (87 systems) 79 91% 69 79% 59 68% 59 68% 64 74% 56 64% 58 67%
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Thank you
Mario GuadamillasPayment Systems Development Group
Latin America and The CaribbeanThe World Bank
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