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Issuers to Investors – What is it?

From Issuer to End Investor The Need for Standardisation John Falk AMEDA Beirut, 29 th April 2010. Issuers to Investors – What is it?. The Industry is Transforming. XBRL Aligned w/ISO 20022 (tomorrow). Issuer. Agent. ISO 20022 (tomorrow). Investment or Fund Manager. CSD. Global

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Issuers to Investors – What is it?

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  1. From Issuer to End InvestorThe Need for Standardisation John FalkAMEDA Beirut, 29th April 2010

  2. Issuers to Investors – What is it?

  3. The Industry is Transforming XBRL Aligned w/ISO 20022 (tomorrow) Issuer Agent ISO 20022(tomorrow) Investment or Fund Manager CSD Global Custodian Sub-Custodian ISO 15022(today) AMEDA - 29 April 2010

  4. What is XBRL? AMEDA - 29 April 2010

  5. The paper-based nightmare of corporate actions continues … • One Horrific Example • 300+ pages to describe an ‘Exchange Offer’ • 38 separate updates were published from Dec 08 to May 09, as new information was made available • Validation took 12 separate sources of data • Five resources worked on it extracting 63 data elements, amassing 44 pages of audit trail changes The challenge is to find the right data, in the right pages, buried alive somewhere in the free-text document AMEDA - 29 April 2010

  6. XBRL - Issuer Tagging Process AMEDA - 29 April 2010

  7. Example • XBRL • The issuer / agent / publisher will highlight and tag all relevant data elements within MS Word as they are writing the press release or prospectus • The electronically tagged data elements are stored as fields within the pdf document, and this fielded data is easily extracted when it is ‘read’ • XBRL • XBRL tagged documents can provide an electronic message for consumption by the Financial Services Industry AMEDA - 29 April 2010

  8. The issuer will ‘drag and tag’ and associate free text to structured data, via XBRL tool For China, for instance, can be in Chinese character set to prevent translation issues AMEDA - 29 April 2010

  9. Issuers to Investors : Corporate Actions –U.S. project delivery milestones and plans 2009 2010 AMEDA - 29 April 2010

  10. Launch Project – identify required market leadership – issuers, CSDs, Stock Exchanges, Regulator, XBRL Jurisdiction Form Stakeholder Group, build business case, maintain dialogue, leverage for communication Issuers to Investors : Corporate Actions – a global template for new markets Develop Data Model – market templates to drive taxonomy • Business drivers • Stakeholders • Communication • Business rationale Build Taxonomy - from existing, aligned with ISO 20022 Submit ISO 20022 CA extensions - if needed for market Public review – of taxonomy and to validate templates • Modelling & development • Data model • Taxonomy • ISO alignment • Pilot & implementation Decide on approach – voluntary, regulatory, pilot, depending on market structure Publish taxonomy & Start issuer pilots If needed – Prepare and drive migration and adoption of ISO 20022 in market Adoption Harmonisation: - downstream market to ISO / SWIFT messages AMEDA - 29 April 2010

  11. ISO 20022 – Proxy Voting

  12. Shareholders’ meetings and proxy votingMeeting the challenges • ISO 20022 - A new generation of standards, a new solution • 8 new MX messages tailor- made for Proxy Voting • Suitable for global cross-border or local market adoption • Support for the EU Shareholder’s Rights Directive • Auditable process • Confirmation of votes lodged • Results reporting • Closed User Group, Proxy Agents membership AMEDA - 29 April 2010

  13. SWIFT MT to MX - Replacing ISO 15022 functionality and new functionalities New New AMEDA - 29 April 2010

  14. Increase market practice compliance levels

  15. Why does it matter - Market practice consistency and compliance improves data quality and STP • Data quality is the biggest driver of Corporate Actions • Market practice, integrated with standards, essential for STP • Securities Market Practice Group (SMPG) • 39 Countries participating with national market practice groups • Provides guidance to improve message quality • Market Practice documents • Event Interpretation Grid (EIG) • Guidelines for placement and usage of dates, periods, prices and rates • Event message examples • Unique Event Reference approach • More at:: www.smpg.info AMEDA - 29 April 2010

  16. National Market Practice Groups cover 39 countries, a lot of country-specific practices www.smpg.info NMPG countries NMPG countries specified on EIG AMEDA - 29 April 2010

  17. SWIFT’s Asset Servicing Strategy A/ Replace text with data standards • Issuers and their agents to standardise and automate the CA announcement process including XBRL • Compliance with Corporate Action Market Practices using STaQS for CA • Infrastructures to move from proprietary to ISO standards • Corporate Actions Unique Identifier • Standardise the tax processes • Improve transparency and efficiency of Shareholders Meeting services • Support implementation of ISO 20022 and coexistence with 15022 for CA • Easy access to SWIFT messaging for smaller clients (IM/AM) B/ Enforce and support market practice adoption C/ Increase automation and use of standards AMEDA - 29 April 2010 17

  18. XBRL focus is appending data “instance” to reports; SWIFT’s to facilitating messaging Issuers and their agents ~1,000,000 events annually for ~85,000 companies and funds Documents and XBRL Intermediaries, Market Infrastructures ~20 global custodians hold 95% of all assets under custody ISO 15022 & ISO 20022 Investors, investment/fund/asset managers Many millions of investment accounts at many layers AMEDA - 29 April 2010

  19. Thank you AMEDA - 29 April 2010

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