Professional Documents
Culture Documents
AGENDA
1 2 STP Background Business Process Identification
BACKGROUND
Socialization/ Education Various Products: Equity, Fixed Income, Derivatives Complexity of Trade/Settlement Processing
Challenges :
Funding Issues - Funding cost (turn around transaction) Inefficiency Risk Issues : - Operational Risk - Back office processing (confirmation /affirmation & Trade Allocation) - Surveillance/Monitoring
Investor Growth
Issuer Growth
STP Development
Global Trend : - Floor to remote to online trading -Direct Market Access (DMA) through Securities Companies -Cross border (cross listing, cross member, cross trading, cross clearing, cross settlement) Business process improvement : - Business orientation & efficiency - Trading, clearing, & settlement mechanism Risk Management Improvement : - Effective Surveillance/Monitoring - Excellent/prudent business operation
BENEFIT
1. 2. 3. 4. 5. 6. Improve process capacity. Reduce input redundancies and manual intervention. Improve transparency. Provide better management with systematic audit trail. Minimize risk and reduce errors. Increase speed of data processing, withdrawal and generating reports. 7. Improve overall efficiency such as funding cash.
Order
S T P
Validation Matching
Risk Management System Enhancement Order Pre-validation (gross). Trading Limit (batch, upload/download, multiproduct yet).
Confirmation/ Affirmation
Clearing
Settlement
Implementation of Master Client ID Client Investor Identity distributed to every EM Registration/administrati on of Client Investor is conducted by each EM
Real-time interface for EM & CB Investor Area Development manual entry/ upload for settlement instruction
BUILDING BLOCKS
STP
Client ID Investor Area Real-time Interface Enhancement Risk Mgt System Membership Stratification
Settlement Agent
OTC Pre-matching
1
SX Member Client ID
2
Master Client ID Client ID
Client ID
Client ID
K P
3
K
7
Sub Account Settlement Account Collateral Account Settlement Account Collateral Account
S t o c k E x c h a n g e
S
E I
E I
10
Client Investor
1
SX Member
Client ID
2
Master Client ID Client ID
Client ID
Client ID
S t o c k E x c h a n g e
3
Sub Account Settlement Account Risk Mng. Account 10
Settl. Agent Account Settl. Agent Account
7
11 Settlement Account Risk Mng. Account
8
K P E I
S
E I
9
Custodian Bank
11
Cash c
CB
2 OTC b Cash
Funding
d Securities
Cash b
a Securities
BANK
CM
e Securities 3 f
Cash KPEI
a Collateral
KPEI
12