t2s operational readiness
TRANSCRIPT
SOFE, November 2014
T2S – Getting ready for a new
operational environment
© S.W.I.F.T. SCRL (“SWIFT”) or its licensors 2014. All rights reserved.
Confidential and proprietary information – Do not disclose to any third party without SWIFT’s prior written consent
Agenda
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On-boarding T2S
T2S… happening now!
Technical & integration readiness
Business & operational readiness
T2S – a single pan-european platform for securities
settlement in central bank money
SOFE 2014 – Confidentiality: Public 3 Source: « T2S – Settling Without Borders », European Central Bank, November 2009
TARGET 2 Securities (T2S) (as from June 2015)
TARGET2 (RTGS, live since November 2007)
Community leveraging SWIFT VAN
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Check-list:
Take strategic decision to go direct
Decide on the business flows (Cash / Securities or Both)
Decide on the communication channels (U2A / A2A or Both)
By above dates, inform
NCB for Cash DCP
CSD for Securities DCP
Eurosystem
Kick-off registration process
Select NSP and register to T2S VAN service (SWIFT e-order)
Get NCB and/or CSD approval
Get T2S approval
A2A mode U2A mode
Wave 1 3 March 2014 3 December 2014
Wave 2 19 September 2014 19 June 2015
Wave 3 16 February 2015 16 November 2015
Wave 4 9 October 2015 11 July 2016
To become a DCP…
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Source: Banque de France
Con.
2014
2016
2015
T2S Testing timeline and milestones
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Q3 Q4 Q1 Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar
GO-Live W2
W2 Migration tests
W2 Community/Business Day tests
Sources: ECB
GO-Live W1
W1 Migration tests
W1 Community/Business Day
Pre-Production tests
We are here
Milestones ICP Cash DCP DiCoA
Wave 1 Implement my
providers’ requirements
Finalise my
implementation plan
before connectivity
Connectivity set up and
testing before
community phase starts
Wave 2 Finalise analysis of
providers’ requirements
& decide on
implementation options
Detailed business,
technical and
commercial impact
assessments
Progress business and
technical readiness and
finalise support to
Community
Wave 3 / Wave 4 Strategic decision on Direct Indirect Connectivity
High-level impact assessment
Finalise target model
and clients offering
Business &
Operational
Readiness
Technical &
Integration
Readiness
On-Boarding
T2S
L E V E R A G I N G S W I F T C O R E C O M P E T E N C I E S
W I T H A U N I Q U E E N D - T O - E N D O F F E R I N G
3 streams of work today
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Business &
Operational
Readiness
Your challenges
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Assess T2S Impact on
my business model Analyse adjacent business
processes (corporate actions…)
Test and implement
smoothly and efficiently
Get my teams up-to speed to deliver
the best customer experience
Training Services
Community trainings
• ISO 15022 enhanced for T2S
• Securities settlement and management- ISO 20022 messages for T2S
• Liquidity and collateral management – ISO20022 messages for T2S
On-site trainings
• ISO20022 settlement flows in a CCP as DCP environment
• ISO20022 for liquidity management for a global custodian and liquidity provider in T2S
• ISO20022 for T2S messaging from a NCB / Stock exchange perspective
• W1 DCPs webex on BAH/BFH customised scenarios
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Frankfurt – Vienna –
Malta – Brussels –
Lisbon
CCP– NCB – Global
Custodians – regional banks –
SX - Payment banks
Get ready for T2S with SWIFT Training
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Get ready for T2S with SWIFT Training
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Be prepared!
Main building blocks
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Community On-Boarding
Business Testing
Technical Testing
Standards Gap Analysis
Impact Assessment
Supporting you end-to-end throughout the change
Training
Mapping & Transformation
Business &
Operational
Readiness
Impact assessment for T2S
Overview
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• Revolves around 4 axis (business processes and flows and related ISO messages, services available, T2S schedule, infrastructure capacity requirements)
IMPACT ASSESSMENT
• Provide an estimation of future volumes and optimised messaging model in a post-T2S environment.
VOLUME PROJECTIONS
• Identify the messages that need to be implemented and the integration and the infrastructure needs.
MESSAGE IMPLEMEN-
TATION EFFORTS
THE BUSINESS ENVIRONMENT CHALLENGE
Maintain different standards and processes
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THE STANDARDS FORMATS CHALLENGE
T2S ISO 20022 messages (DCP/ICP) Deep dive into usage and creation
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Documentation on business
flows
Explanation on messages
usage
Clarification on messages
functionalities
Creation of concrete
business scenarios
Identification of message
elements
• Main principles on ISO 20022 for T2S (description of
the functionality / common fields of the different
messages)
• How to manage the information within T2S ISO 20022
messages, which fields are used and how to
instruct/retrieve the different types of information
T2S actor reference/T2S reference/Account owner transaction
identification/Account servicer Transaction
Identification/Processor Transaction Identification/Matching
reference…
• How to manage identifications within T2S ISO 20022
messages, which fields are used and how to
instruct/retrieve the different types of identification
Members and options, account and options,
amounts/quantity/price/date indicators…
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A number of MT changes have been made to maintain compatibility with
ISO 20022 as it evolves to support the requirements of T2S.
Impact of T2S on financial messaging
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1. PERFORM A GAP ANALYSIS OF CURRENT VERSUS NEW
Domestic formats
ISO 15022 (enhanced)
ISO 20022
ICP
ISO 15022
ISO 20022
T2S
DiCoA Domestic
ISO 20022
2. EVALUATE AND SELECT THE BEST IMPLEMENTATION
3. MANAGE STANDARDS DURING IMPLEMENTATION (AND BEYOND)
Standards gap analysis
Example: New functionalities offered
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sese.023
MT 543 to deliver out a
restricted balance must
be “enhanced” i.e. refer
to the restriction
reference.
ICP
T2S
DiCoA
MT 543
T2S will allow CSDs and NCBs to define their own restriction types.
Restriction types restrict the usage of a balance:
- blocking
- reservation
- earmarking
When a certain balance becomes restricted, T2S assigns a ‘restriction
reference’ to which all subsequent messages have to refer to.
Standards consulting services
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MyStandards for T2S and MI Communities Easy access to your market guidelines and adaptation
requirements
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ISO 15022
ISO 20022
ICP
T2S
ISO 20022
DiCoA
Use MyStandards to
manage and publish
T2S specifications
Consume the T2S
specifications in
MyStandards
Enrich, compare,
manage and publish
their internal
specifications
Consume the specs of
service providers via
MyStandards.
Use the platform to
document current
capabilities and
compare.
ISO 15022 ISO 15022E ISO 15022E ISO 20022
Bridging the gap between ISO 15022 and ISO 20022 by introducing an intermediary
layer: ISO 15022 Enhanced
MyStandards
MyStandards
Readiness
Portal
Single repository on a collaborative platform for standards content
management and maintenance
Input, analyse, compare and release specifications
Allow internal and external collaboration
Generate documentation and schemas
Communicate changes and ease/accelerate maintenance
A new layer on the web platform to streamline customer standards
testing (onboarding, servicing and readiness assessment)
Easy/fast access to documentation made available in MyStandards
Complete testing and validation features (schema validation, reference data,
ISO guidelines, Santander usage guidelines)
Provide a library of valid and invalid samples for community to test
Track customer readiness thru separate tailor-made portals and identify
where on-boarding support is needed
MyStandards platform in a nutshell
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Benefits for using MyStandards platform
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Publish for your customers
Review your own specs Internal
External
External
• Onboard new
customers faster
• Enable customer self-
service
• Shorten expensive end-
to-end testing cycle
• Monitor onboarding
Internal
• Keep documentation and
implementation in sync
• Create feedback loops
across teams
• Maintain high quality test
messages
Test and build your
your own library
Support and track
your customer
readiness
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Example with T2S
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Example with T2S
Validate your business developments with
Readiness Portal
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Covering both ISO 15022 and ISO 20022
Example with T2S
Easy (and free) access to market guidelines
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and more to
come…
MyStandards
Looking beyond settlement EU Market Standards for CA Processing and related impacts
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Giovannini Barrier 3
Corporate Actions Joint Working Group
European Market Standards for
Corporate Actions Processing
(European) Market Implementation
Group(s)
Ultimately reporting to the European
Commission
T2S Corporate Actions Sub-group
Sources: www.ebf-fbe.eu, www.t2s.eu
T2S impact
Market drive
Regulatory impact
Industry drive
Drivers for further Asset Servicing automation
P R O V I D E L E V E R A G E F O R N E G O T I AT I O N B Y N E T W O R K
D E PA R T M E N T W I T H D E P O S I T O R I E S
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Increased
Efficience
Reduced risk
and exposure
Improved
customer
satisfaction
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Corporate Actions services
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Efficiency measures (Nak rates,
Message type usage, average
message length)
Process mapping
IT system mappings
STP level
Number of staff , staff turnover, level
of expertise
Peer benchmarking
Market practice
compliance review
Operational efficiency
SMPG: EIG and beyond
ISITC recommendations
Focus on inbound production data
Provider benchmarking
Identification of critical areas
Basis for marketing campaigns
Objective neutral Third-party view
Business Intelligence
Market views
Timeliness of data transmission
Windows of election opportunities-
global view, per market, per sender
CAJWG – sequence of dates
Use of COAF, globally per market
Traffic growth analysis
Corporate
Actions
review Improving the
conformance of your
data
Compare your providers’
specifications
- amongst them
- against yours
- against EIG
- on-line editing
- easy access to documentation
- export the updated message
instance
- Perform testing on message
instances
Message mapping and transformations
Standards process review
Usage guidelines documentation
Usage guidelines validation
Standards release impact analysis
Community migration
Standards Consulting
Corporate Actions in a
T2S environment
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Training
Securities exchange
Securities distribution
Cash distribution
Consulting Services
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Focus points
Scope and impact of Corporate Actions in T2S
CAJWG Standards
Corporate Actions toolkit
Corporate Actions processing workflow in T2S
Focus on specific processes (eg issuance)
In/out of T2S scope
CE grouping Players and configurations
Securities and cash
movements
Queries and reports
Position blocking and transaction
freeze
Sequence of dates
Transaction management
Monitoring process
Issuance Static data Cash
postings
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Benefit from SWIFT experience Recent business consulting assignments
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ECB / EUROSYSTEM (T2 / T2S)
Contributed to T2S User
Requirements Definition for a
centralised best-in-class securities
settlement platform
Delivered T2S detailed message
specifications and design
Involved in preparation of
TARGET2 move to ISO 20022
LONDON STOCK EXCHANGE
Contribute to the refresh of CCP
clearing systems and interfaces
with the review of clearing
business flows and map to ISO
equivalents
Gap analysis between LSE
specification and ISO20022 and
ISO15022 message and field
definitions.
Assist in the completion of their
document describing the client
facing ISO messages supported
by the CCP
SADC PAYMENT AND DVP
MODELS
Guidance, documentation and
delivery of implementation
guidelines
Construction of business
samples and interface
specification information
Loading of usage guidelines into
MyStandards
MAJOR SPANISH CUSTODIAN BANK
Assist the custodian bank in setting up a
general clearing member service to
connect to the newly established CCP and
offer clearing services to non-members.
Define workflows and how they translate
into FIXML and ISO 15022
communications flows, with detailed
message usage specifications
Document user functional specifications, in
the context of the Spanish Reform, for the
internal development of the new clearing
service
Define test scenarios for the acceptance of
the different message flows (FIXML and
ISO 15022 MT)
Technical &
Integration
Readiness
Your challenges
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Select VAN provider
Adapt to T2S technical
requirements
Perform Standards
mapping and transformation
Review of my technical infrastructure
INTEGRATION PLATFORM
CONNECTOR FOR T2S
Back office
applications
Network
Connection
Communications
Software
Messaging
Software
VAN
Integration Layer: Business
Integration Layer: Technical
Connectivity to T2S through SWIFT VAN
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A2A U2A
SAA
SAG
Alliance Access Integration Platform
Additional integration functionality
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SWIFT format
Financial
Applications
SW
IFT
Net
Inte
rface
Alliance Access
FIN
Inte
rface
Applic
atio
n
Inte
rface
Message store
Alliance Access Integration Platform
Validation Transformation Enrichment
Internal API
proprietary format
Connecto
rs
Customer application
Transformation
Transforming a
Proprietary Message…
… into a valid ISO Message…
…using customisable
translation rules…
Connector for T2S key features
Main Benefits
Connector for T2S
Shielding application from the complexity of T2S
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A plug-in, easy to install and
operate in Alliance Access
The T2S application deals with
messages in ISO 20022 format
A
B
All the logic to format InterAct /
FileAct messages
Generation / Verification of T2S
signature in BAH/BFH
Automatic compression /
decompression
Bulking & Debulking logic
Including Timeout/Oversize
logic for Queries/Responses 2
3
4
5
A
B 1
3
4
5 4
2
Simply T2S business
messages
No exposure to complexity of
T2S protocol
1
MessageDigest verification
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SWIFTNet
Back office
Alliance Access
Alliance Gateway
/ SNL
HSM VPN
MessageDigest
calculation
BAH/BFH Signature
generation and
verification
• XML test data as
generated by back
office
• MessageDigest
calculation by SWIFT
tool
• Comparison
• Both for messages and
files
Technical testing domain
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SYSTEM
INTEGRATION
TESTING
SWIFT Infrastructure
for T2S
Technical Functionality
FAILURE TESTING
Recovery process
Exception handling
PERFORMANCE
TESTING
Stability under
sustained load
Stress behaviour
Technical infrastructure review
Overview
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Review the SWIFT infrastructure at Customer
and assess the impact of T2S for the following
domains:
Architecture of SWIFT infrastructure
components, middleware and back-office
integration
Capacity requirements
Connectivity requirements
New services to be implemented
Security set-up
Business Continuity, Resiliency and
Recovery procedures
Roles and responsibilities
On-Boarding T2S
On-boarding
• Registration process for DiCoAs
• Support specific to T2S-related issues
• Access to central documentation
• Adopt ISO standards and shield your BO with transformation layer (integration)
• Testing / certification
• On-boarding over SWIFT (CUG)
• On-boarding your staff and create expertise & knowledge
• Certification CSD / NCB
• Help the community get ready and on board.
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A2A access
What can be done prior to VAN registration opens for DCPs:
Confirm your volumes assumptions
Get a VAN quotation
Get information on the service and select the environments
to connect to
Go through the subscription guides (both VAN and T2S)
Consider an infrastructure sizing exercise with VAN to
ensure that the infrastructure is properly sized for T2S
activity
Ensure capability to generate valid ISO messages in
compliance with T2S usage guidelines
Ensure capability to meet T2S technical requirements
(header generation, signature etc).
Get informed by your CSD and NCB of what T2S expects in
terms of static data set up before operating in a testing
environment .
Only after VAN registration opens for DCPs:
Fill in the registration form as described in the subscription
guide
Get approval from your CSD, NCB and then Eurosystem
Get provisioned on the VAN service.
Start entering data into T2S to set up testing environment
Check list to effectively connect to
T2S and start testing…
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U2A access: What can be done prior to VAN registration opens for
DCPs:
Order your tokens
Go through the U2A step-by-step guide
Security Officer to set up the tokens (check firewalls,
put certificates, assign to physical users, …).
After VAN registration opens for DCPs: same process as
for A2A.
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A2A and U2A registration and set up
documentation
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U2A setup steps with SWIFT - details
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Steps Description
(a) Registration with SWIFT to
T2S connectivity services
Refer to section 5.2 Subscription of “SWIFT`s VAN Solution for T2S Service
Description” document.
(b) Order personal tokens Boxes of 10 personal tokens can be ordered/purchased on swift.com in the ordering
section, You can use personal tokens that you already have, if those were ordered no
earlier then Oct2013. See also screenshots.
(c) Create certificate DN This step handled by the Security Officers using the SWIFTNet Online Operations Manager
(O2M). Refer to section Certificate Management of “O2M User Guide” available on the
SWIFT UHB. See also screenshots.
(d) Install token driver The token driver installation package is available on the SWIFT Certificate Centre
(www.swift.com/certificates) in the getting started section.
Refer to the “token Installation Guide” available on the SWIFT UHB.
(e) Activate the token This step is handled by the end-user using the SWIFT Certificate Centre, accessible over
internet or MV-SIPN. Refer to “SWIFT Certificate Centre portal user guide” available on the
SWIFT UHB. See also screenshots.
(f) Check Network configuration
requirements
Refer to appendix A.2 of the “SWIFT`s VAN Solution for T2S Service Description” +
Knowledge Base tip 5018711 – which URLs and IP addresses are used in the T2S U2A
(Browse) flow .
(g) Define certificate DN in T2S
static data
Refer to T2S documentation.
(h) Prepare end user workstation Refer to appendix A.3 of the “SWIFT`s VAN solution for T2S service description” for the
different requirements (.pac file, Browser settings, allow Java applet, system requirements)
(i) Access U2A Refer to appendix A.1 of the “SWIFT`s VAN solution for T2S service description” for the
URL of the different T2S U2A environments. See also screenshot.
SWIFTNet Header
BIC/DN in T2S messages for A2A
3 layers
‘Layer3’ => DN
Used within SWIFTNet services
is T2S ‘Technical Address’
provide in SWIFT subscription & T2S
registration
‘Layer2’ => BIC/DN
Used within BAH/BFH
is T2S Business Sender (BIC11) and T2S
Business Signer (DN)
‘Layer1’ => BIC
Used within ISO20022 Message
are Party fields
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BAH
Document:
ISO20022 Message
Signature
IA/FA
‘Layer3’
‘Layer2’
‘Layer1’
SWIFTNet Payload
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Key Documents and Links
SWIFT
• SWIFT Information Centre for T2S, on swift.com (here)
• SWIFT’s training on T2S (here)
• SWIFT’s VAN Solution for T2S Service Description (available on demand)
• SWIFT’s VAN Solution for T2S Subscription form (here)
• Price List for SWIFT’s VAN Solution for T2S (here)
• MyStandards Readiness Portal for T2S (here)
• Personal Token ordering form (here)
T2S
• ECB Website (here)
• T2S Connectivity Guide (here)
• T2S Message Validation Service (for CSD/NCB, planned by July 2014)
Did you know that SWIFT can help you
further in your T2S journey…?
Directly
Connected
Actors
(DiCoA)
DiCoA
Community
HANDHOLDING SERVICES TO SUPPORT YOUR TEAMS
Project management (how your set up translate into
relevant subscription data)
Consultancy on PKI Security
Infrastructure readiness (health check)
SERVICES TO HELP YOU SUPPORT YOUR COMMUNITY
Help managing your migration and on-boarding
programmes
Provide you with a customised test library published to
your Community on MyStandards
Give you access to a centralised tracking feature to get
evidences of readiness at individual customer level
(MyStandards Readiness Portal)
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50
Standard support module for T2S
Included in T2S VAN offering
Help solve problems faster
Find relevant operational information in one place
Coordination of 3-way Problem Resolution with T2S
For severe technical issues
Through SWIFT Support
Online Information Centre
Dedicated publishing space
Operational news
Operational status
Availability statistics (consolidated)
For subscribed swift.com contacts
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From Standard+
to Premium
Upgrade your support service to cope with
T2S challenges
51
Health Check
Best Practice Sharing
Training
Dedicated Team
T2S Support Module
T2S Expert View
From Premium
to Premium Plus/Custom
Premium Support
Escalation process
Monitoring
Customer reports
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