APAC RMPG ASX implementation of ISO 20022 for notification of corporate actions

Karen Webb

Manager, Settlement Services

8 April 2015

Agenda

Introduction to ASX

Implementation of ISO 20022 for corporate action notifications

• Challenges

• Objectives

• Solution

• Benefits

Q&A

Introduction to ASX

Role of ASX in the Australian market

4

Role of ASX in the Australian market

5

Implementation of ISO 20022

for corporate action

notifications

Challenges - standardisation at ASX

• Current mix of proprietary and some standardised messaging

7

Cash Market Wholesale Market

CHESS proprietary Austraclear 15022

CA notification proprietary CA notification 15022

Customers

(e.g. custodians)

15022

mixed

Customers 15022

• Early focus on corporate action notifications, at request of customers

• Use of global standard protocols is a key objective for our Technology Renewal Program

• Trade (cash market and futures)

• Post Trade (clearing and settlement)

Challenges in corporate action processing

• Complexity of events

• Numerous sources of information and non-standardised structure

• Multiple parties in announcement chain

• Operational risk

• Importance of corporate action information

• Costs to stakeholders and ASX

Therefore a need for:

• More timely, accurate, consistent (standardised) corporate action data

• Reduction of systemic risks and costs

• Achieve benefits to all stakeholders, including issuers and investors

• Be world class, globally connected

8

Challenges in traditional notification process

9

Project challenges

• Are all stakeholders aware of the end to end notification process?

• How to get 100% coverage so efficiencies are enjoyed equally?

• How to approach to consultation?

• How to achieve Issuers buy-in to new process?

• Need to review ASX Listings Compliance and Operations processes?

• How could we leverage our position as the portal for Issuer market announcements to achieve the best outcome?

10

Project objectives

11

deliver a more streamlined and standardised process for the announcement, data capture and delivery of corporate action information

Project challenges

The approach to consultation and implementation

• Review the notification cycle

• Issuer survey on the announcement process and content

• Establishment of working group for detailed consultation

• Propose a mandatory process

• Minimise impact on issuers re new process

• Market Regulator engagement

• Phased approach – high volume / largely mandatory events first

• Reliance on improved technology / database

• Messaging gap analysis

• Online form design and questions

• Decision to go to ISO 20022

12

Why ISO 20022 for corporate actions?

• International comparison – adoption progress

• Position as market infrastructure to influence change

• Xml format

• More data, extension model

• Backwards compatibility

• Delivery channel options

• SWIFT solutions to smooth the path

• MyStandards

• IPLA

13

The process solution

14

The existing notification process – capture & dissemination of data

The process solution

15

New online form process and future view – potential direct upload

The technical solution

16

Application Internal /

External

purpose

SWIFT MyStandards External Publication of usage guidelines for ISO 20022 format CA notification

Announcement web

portal (ASX Online)

External New online form functionality, including workflow for issuers to

announce corporate actions

Market Announcement

Platform

Internal Internal announcement review and release platform - enhanced to

identify structured vs. unstructured announcements; exception

management

Central database Internal

Source of static data, accept and send xml format files, create CA

record, approval workflow. Also used for manual update to information.

Data Warehouse Internal

Source of static, historical data.

Services existing batch style market information products.

Enterprise Service Bus Internal

Receives proprietary xml CA record from central database, holds ISO

20022 templates and performs re-formatting, xml send to IPLA

IPLA (SWIFT) Internal Integration platform, custom module

SWIFTNet service External test and production service for ISO 20022 corporate action

notifications to customers

FTP service (ASXNet) External Alternate delivery of same xml file to customers

Customer portal External Delivery of other market information products

The benefits - improved notification process

17

The benefits – for all stakeholders

Investors

Issuer

ASX

Information providers, custodians

• Commit to ISO

20022

• Early adopters

benefit

• Improved efficiency,

lower risk ( costs)

• Extended data set

• STP opportunities

• ASX as key source

• Receive timely, transparent,

consistent information

• Institutional Investors – lower

processing cost

• ASX position – information source

• Range of products – near real time,

batch, detailed data

• Responsive to customers

• Improved efficiency & lower risk for

operations

• Improved issuer compliance, listing

service

• Improved investor

relations / take-up

• Improved mid to small

cap market coverage

• Improved compliance

• Improved announcement

process

• Reduction in post

announcement queries

Information

Cycle

The benefits – ASX product expansion

19

• Building our service to customers: expanding on the content, format and delivery times for ReferencePoint Corporate Action products with new ISO20022 format

• Recognise that not all subscribers require xml, SWIFT channel, so will offer expanded product suite, rather than replacement for now

8.30am 8.30pm

Channel Product

Fixed field length 𝌒 𝌒 𝌒 𝌒

csv

ASX

Online 𝌒 𝌒 𝌒 𝌒

ISO 20022

CA xml

SWIFTNet

ASXNet

8.30am 3.00pm

11.30am 2.30pm 4.30pm 8.30pm

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Existing

New

The benefits - delivering market improvements The stakeholder view

Benefits

Issuer: “the online forms are helpful and user friendly”

“the adoption of new technologies and online processes such as this aligns with the company’s objective of being innovative and efficient in the digital environment.”

“The calculation of dates is time-saving and their validation is re-assuring”

ASX: 90% reduction in time to capture corporate action data where online form is used

Custodian: “Positive change requires the engagement of all key players including issuers, registries, custodians and of course, the ASX….. The initiative will allow for greater levels of automation and control of our corporate event announcement process”

“Standardisation and automation of the information flow cuts down on the potential for transcription errors, and the fact that announcements are accessed from the source of truth contributes to satisfying the need for accuracy and completeness.”

Q&A

22