1 same day settlement with dvp rogerio martins november 14, 2002 acsda lima
TRANSCRIPT
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SAME DAY SETTLEMENT WITH DVP
SAME DAY SETTLEMENT WITH DVP
Rogerio MartinsNovember 14, 2002
Rogerio MartinsNovember 14, 2002
ACSDA LIMA
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TópicosTópicos Contents
1. The New Brazilian Payments System
2. CETIP Overview
3. Same day net settlement
4. Same day gross settlement
5. Same day guaranteed net settlement CENTRALCLEARING
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TópicosTópicos Contents
1. The New Brazilian Payments System
2. CETIP Overview
3. Same day net settlement
4. Same day gross settlement
5. Same day guaranteed net settlement CENTRALCLEARING
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Objectives Objectives
Reduce systemic risk - credit risk management transferred to the private sector
RTGS and money market securities depositary in Central Bank
Private DNS clearing houses for securities, derivatives, interbank payments and foreign exchange
Certainty and finality of settlement
Reduce gap between trading and settlement
Legal certainty of multilateral netting and execution of guarantees
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ActionsActions
Credit risk management and support migrates from Central Bank to market participants through clearing houses
Central Bank acts as:
System regulator
Risk control supervisor
RTGS operator
Money market CSD operator
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The new sceneryThe new scenery
FX
SELIC
BM&F
CETIP
CB MONEY ACCOUNTS
CENTRAL
CBLC
COMPECHECKS &DOCS
STOCKEXCHANGE
CIPINTERBANKSPAYMENTS
MONEYMARKE
T
FIXED INCOME AND DERIVATIVES
COMMODITIES &FUTURESEXCHANGES
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TopicsTopics Contents
1. The New Brazilian Payments System
2. CETIP Overview
3. Same day net settlement
4. Same day gross settlement
5. Same day guaranteed net settlement CENTRALCLEARING
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ProfileProfile
One of the main Latin American fixed income
securities depositories
Private and public securities
OTC registration and settlement
Electronic trading system - CetipNET
Non-profit organization
Nation-wide coverage
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Planet CETIPPlanet CETIP
US$ 156 billion in Custody
US$ 3 billion in average daily turnover
US$ 2 billion in daily financial settlement
4,430 participants
43 types of securities and derivatives
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ParticipantsParticipants
Total: 4,430
Consumer Credit, Leasing and Mortgage
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Broker-dealers220 Banks
220Non Financial Organizations
881
Investment Funds2,991
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The new CETIPSettlement Alternatives
The new CETIPSettlement Alternatives
CETIP
Secondary
Public / Private
Multilateral Netting
Gross Settlement
And Bilateral Netting
New Issues
Redemption and Events
Multilateral Netting
CENTRALCLEARINGSTR
Central Bank
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How we operateHow we operate
Primary and secondary markets
Transactions registered by double entry
Segregation of assets held by participants
STP - integrated trading, book entry, settlement and custody
DVP - delivery versus payment
Financial settlement in Central Bank money
CETIP is not a Central Counterpart
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How we operate How we operate
OTC Registration
Electronic Trading System
Central Bank
FinancialSettlement
Custody
STP
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CustodyCustody
Dematerialized electronic registry
Segregated by participant
Custody watch over the ‘life’ of securities,
automatically executing known events
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TopicsTopics Contents
1. The New Brazilian Payments System
2. CETIP Overview
3. Same day net settlement
4. Same day gross settlement
5. Same day guaranteed net settlement CENTRALCLEARING
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DNS SettlementDNS Settlement
Input data checking and matching
Securities flagged in seller´s account until
payment finality
Confirmation by settling banks
Settlement in T+0
BIS type 2 (gross/net)
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DNS Financial SettlementDNS Financial Settlement
Integrated to Custody
Issuer risk only
Multilateral netting
Buyer´s bank pays to CETIP´s central bank
money account
CETIP pays to seller´s bank central bank money
account
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DNS Delivery Versus PaymentDNS Delivery Versus Payment
SELLERCustody
BUYER Custody
Reserve Account Bank A
Reserve Account Bank B
GROSS
NET
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TopicsTopics Contents
1. The New Brazilian Payments System
2. CETIP Overview
3. Same day net settlement
4. Same day gross settlement
5. Same day guaranteed net settlement CENTRALCLEARING
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RTGS Matching and SettlementRTGS Matching and Settlement
Input data checking and matching
Securities flagged in seller´s account until
payment finality
Same day settlement in real time
BIS type 1 (gross/gross)
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RTGS Financial SettlementRTGS Financial Settlement
Primary and secondary markets
Integrated to Custody
Real Time Gross Settlement
Buyer´s bank pays to CETIP´s central bank
money account
CETIP pays to seller´s bank central bank
money account
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Delivery Versus PaymentDelivery Versus Payment
SELLERCustody
BUYER Custody
Reserve Account Bank A
Reserve Account Bank B
GROSS
GROSS
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TopicsTopics Contents
1. The New Brazilian Payments System
2. CETIP Overview
3. Same day net Settlement
4. Same day gross Settlement
5. Same day guaranteed net settlement CENTRALCLEARING
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Guaranteed Settlement - CENTRALGuaranteed Settlement - CENTRAL
DNS Settlement in T+0 or T+1
Real Time Novation
Securities move to CENTRAL in real time
Real time collateral management
Day trades and short selling
DVP
BIS type 3 (net/net)
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Guaranteed Settlement - CENTRALGuaranteed Settlement - CENTRAL
Private and public securities
Secondary market
Double entry checking and matching done
by CETIP
Limits and trades approval by CENTRAL
STP Participant/CETIP/CENTRAL
Securities lending
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Delivery Versus PaymentDelivery Versus Payment
SELLERCustody
BUYER Custody
Reserve Account Bank A
Reserve Account Bank B
NET
NET