Fifty-eight delegates representing 23 financial market infrastructures (FMI) from 18 different countries attended DTCC’s sixth-annual Global Relations Exchange and Training (GREAT) Conference in Jersey City, N.J. in July.
The GREAT Conference offered a forum for prominent members of the international FMI (central securities depositories, central counterparties and clearing arms of exchanges) community to meet with DTCC executive leadership and other subject matter experts from around the world to share ideas, innovations and best practices in clearing, settlement, asset servicing and risk management.
In his opening remarks, DTCC Executive Chairman Bob Druskin welcomed the delegates and discussed three of the central themes of the event: 1) the importance of increasing collaboration and information sharing among FMIs; 2) DTCC’s global expansion, risk management and cost efficiencies in this time of economic and regulatory uncertainty; and 3) the growing prominence of FMIs in the wake of the financial crisis.
“We all share common goals of lowering systemic risk, reducing costs, increasing operational efficiencies, more effectively managing capital, leveraging technological advancements and ensuring financial market stability,” Druskin told the delegates. “As our stars continue to rise and shine brighter, we must seize opportunities to drive meaningful change while continuing to provide transparent and flawless delivery of clearance, settlement and depository services through effective collaboration.”
State of the Global Industry and Inflection Point
DTCC President and CEO Mike Bodson delivered the keynote address, highlighting industry trends from a macro prospective. “If I had to encapsulate the state of the global environment today, I would say that it’s still challenged by the complexity of new rules, new regulations and new risks.”
Bodson noted how firms have been searching, and will continue to search, for organic growth in an effort to return to normal levels of profitability over the course of the next six to 12 months. Additionally, Bodson added, the short to medium term will be marked by slow and steady growth as a result of new and emerging risks that are greater in frequency and more systemic in nature, along with the complexity and lack of certainty over the implementation and impact of ever-changing regulation.
Despite the increasing challenges, Bodson believes that this presents an opportunity to evolve by increasing cooperation and collaboration on a global scale. “I believe that financial market infrastructures around the world are at a new inflection point and this will require financial institutions and policymakers to rethink how infrastructures can play a more significant role in addressing the challenges that lay ahead of us.”
The World Has Become Our Neighborhood
The conference included nearly 50 presentations on topics such as settlement cycles and models, new initiatives, asset servicing, clearing, risk management, global tax regulations, business continuity management and cyber risk.
Introducing the session on DTCC’s fundamentals, Andrew Gray, managing director and head of core product strategy and management, reflected on DTCC’s growing global footprint. He noted that although DTCC is occasionally thought of as an organization solely dedicated to U.S. financial markets, “we have a significant presence overseas, especially in Europe and Asia, with offices in London, Amsterdam and Brussels as well as Tokyo, Singapore, Shanghai and Chennai. At present, DTCC’s global trade repositories record more than $500 trillion in gross notional value of transactions made worldwide.”
Gray was joined by DTCC’s business line leadership to address the delegates on core services and global expansion initiatives, including global trade repositories, legal entity identifier, the collateral processing utility, and global middle office utility.
Navigating the New Regulatory Landscape
Andrew Douglas, managing director and head of DTCC’s government relations and public affairs for Europe and Asia, moderated a panel on international regulatory reform with global leaders such as David Wright, the secretary general of International Organization of Securities Commissions (IOSCO), Kay Swinburne, the Welsh representative to the European Parliament, Larry Thompson, managing director and DTCC’s general counsel, and Christopher LaFleur, representative director of DTCC’s data repository in Japan.
The panelists shared their expertise and insights on regulatory reform initiatives from Dodd-Frank implementation and derivatives reform to data-sharing and global transparency. The dialogue highlighted the complexity of the environment within which FMIs operate and further bolstered not only how important such organizations are to the proper functioning of the global marketplace but how crucial cooperation among them will continue to be.
“I believe that the more we can integrate our economies around the world, safely and sustainably, not only does welfare increase and growth increase, but the world becomes a safer place,” said Wright. “That’s a European perspective, perhaps, but perhaps as well a global truth. DTCC has been a leader and a champion of global markets, of effective global regulation and cooperation and I commend you for providing a great deal of leadership and effort to move this very complex and global agenda forward.”
In Their Words: The Delegates Speak (SIDEBAR)
“The GREAT Conference presented new initiatives and different ways companies can improve upon the different processes and programs that are critical to their operations.”
Maria Mercedes Corral Strassmann, CIO, Deceval S.A.
“The content of the GREAT Conference was well thought out and well structured. The sessions have afforded me with a good deal of excellent information that I can use as a starting point and consider how I can apply what I learned to benefit my organization.”
Indirani Rao Chief Forex Officer, The Clearing Corporation of India Ltd.
“The regulatory reform session was quite strong. The panelists were excellent and were very candid. They offered perspectives on the subject that one wouldn’t normally hear. They raised issues that we have all been facing.”
Mita Natarajan, Senior Vice President, Head of Corporate Services Listings, Singapore Exchange Limited
The GREAT Conference offered me and my Strate colleagues the valuable opportunity to network with our peers from around the world which is very important because we all operate in a global economy and are faced with similar challenges. Thus, as a global economy we cannot move forward unless we share information and cooperate. We all talk about our interdependence a lot and it is now up to us to take it to the next level by implementing the necessary actions to get the required momentum. Being able to build relationships and network with our international peers and share our experiences helps us all to move forward.”
Hannesvan Eeden, CFO and Company Secretary, Strate Limited
“The discussion among the panelists and audience has been excellent. This conference has helped us and all participants improve upon our knowledge and share experiences to see how other financial markets from around the world operate. The panel on regulatory reform and the IT luncheon panel were excellent and productive discussions. The networking aspect of the GREAT Conference has been invaluable for me and my colleagues to interact with our equals from around the globe.”
Eduardo Farias, Director of Corporate Risk, Internal Controls and Compliance, BM&FBOVESPA S.A.
“The topics offered for discussion at the GREAT Conference have been very impressive. The conference has provided a great opportunity for participants to gain new insights on how different markets are moving towards compliance of guidelines. Each market has a different configuration and my attendance to the GREAT Conference has afforded me the opportunity to learn how each market tackles their respective regulatory structure. The panel on managing risks for financial market infrastructures provided great insight on how risk is viewed across different markets. Risk and compliance is so important and the panel provided a very rich discussion on the different approaches to managing risk.”
Catharine Wong, Head of Nominees & Depository, HKEx
BM&FBOVESPA S.A. (Brazil), The Canadian Depository for Securities Ltd., Depósito Central de Valores S.A. (Chile), China Securities Depository and Clearing Co. Ltd., China Central Depository & Clearing Co. Ltd., Deceval S.A.( Colombia), Cevaldom Depósito Centralizado de Valores, S. A. (Dominican Republic), Hong Kong Exchanges and Clearing Limited (HKEx), National Securities Depository Ltd. (India), The Clearing Corporation of India Ltd. (India), Japan Securities Depository Center, Inc., Japan Securities Clearing Corporation, S.D. INDEVAL (Mexico), Central Depository Company of Pakistan Ltd., Latin Clear(Panama), CAVALI S.A. I.C.L.V.( Peru), Singapore Exchange Limited, Strate Limited(South Africa), Korea Securities Depository, Korea Exchange, Taiwan Depository & Clearing Corporation, Taiwan Stock Exchange, Vietnam Securities Depository