Centralisation of Critical functions in Singapore

1
Centralisation of Critical functions in Singapore
2006
2
Index

• Objectives
• Best practices in CLSA
• Review Model
• Implementation Strategy

3
Objectives

• Best practices to increase delivery capability
• Centralise global operations - take it to the
  next level
• Implement a state of the art solution
• Complement it with robust technology platform
• Risk management
• Move critical functions away from HK to reduce
  single country operations risk
• Dual head office (ability to run CLSA from both
  Hong Kong Singapore)
• Cost Management
• High degree of automation
• Access skilled and multi lingual skills (fluency
  English Mandarin)
• Move to a variable cost
• Business Opportunity
• Explore opportunities offer services to other
  financial institutions (turn it into a business)

4
Seamless technology platformAlways on - Always
connected - All markets in Asia-Pac

• Trade Creation
• Compliance
• Restrictions
• Sufficiency

• Price Discovery
• Market Data
• IOIs
• Advertisements

• Order Processing
• Placement
• Execution Status/Monitor
• Audit trail/ fills

• Pre-Trade
• Research/analysis
• Issues
• Economic

• Post-Trade
• Full Allocation
• Matching
• Confirm/Affirm

• Settlement
• Custodian allocation
• Status Monitoring
• Exception resolutions

• Reconciliation
• Identify exceptions
• Resolve exceptions

5
Seamless technology platformAlways on - Always
connected - All markets in Asia-Pac

• Trade Creation
• Compliance
• Restrictions
• Sufficiency

• Price Discovery
• Market Data
• IOIs
• Advertisements

• Order Processing
• Placement
• Execution Status/Monitor
• Audit trail/ fills

• Pre-Trade
• Research/analysis
• Issues
• Economic

• Post-Trade
• Full Allocation
• Matching
• Confirm/Affirm

Move to Singapore

• Settlement
• Custodian allocation
• Status Monitoring
• Exception resolutions

• Reconciliation
• Identify exceptions
• Resolve exceptions

6
Index

• Objectives
• Best practices in CLSA
• Review Model
• Implementation Strategy

7
CLSAs Processing Model Best Practices

• Single technology platform across the company
• Plug and play of new markets
• Instant system recovery
• Straight Through Processing
• Achieve a high level of control and minimise risk
• High level of visibility of the trade life cycle
  status
• Focus on handling exceptions
• Low cost operating model
• Handle fluctuations in volumes efficiently
• Low touch environment (highly automated)
• Offer consistent pre-post trade services to
  global investors
• Highly ranked by clients for offering consistent
  post trade services across all Asian Markets
• Offer instant trade confirmation upon completion
  of trade execution (again minimising errors)
• Commended by industry experts for innovative use
  of technology and services

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Operational Model - Straight Through Processing

• Post trade processing is full STP
• Volume independent
• Variable cost (Utility model)
• Fully integrated front, middle and back office
• Leading edge Service Oriented Architecture
• Exception based processing
• Fully automated reconciliation (CLSA/Client/Mkt)

9
CLSAs STP Environment ( Full Automation)
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CLSA Operations Centre
UK
Korea
Japan
USA
China-Shanghai
Hong Kong
China-Shenzhen
India
Taiwan
Thailand
Philippines
Malaysia
Singapore
Indonesia
Mauritius
Australia (2006)
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CLSAs Operations Centre

• 24 hour continuous operations
• Following functions performed for all Group
  entities world-wide (including US affiliate and
  UK subsidiary)
• Contracting
• Settlement
• Reconciliation
• Funding
• Corporate Actions
• Agency clearing model
• Adapted in Malaysia and UK
• In-progress in Singapore, Hong Kong, Thailand,
  Indonesia and Australia

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CLSAs Operations Centre cont

• Establishing new Futures and Options processing
  hub with same rigorous controls and efficiencies
  as equities business
• Hong Kong
• India
• Korea
• Malaysia
• Thailand
• Singapore
• Australia

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Innovative Operating Model

• Standard procedures, workflows, reconciliations
  and documentation deployed throughout the firm
• Homogenous skill-set
• Ease of cross-training
• Common shared procedures
• Complexity of infrastructure centrally managed
• Fully automated ISO 15022 messaging through SWIFT
  network
• Straight through processing based on exception
  management

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Full Trade Life Cycle Management

• Oversee and control entire securities business
  processing through real-time trade life cycle
  management
• Trade Executions
• Pending Trades
• Settled Trades
• Cash Movements
• Securities Holdings

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Full Trade Life Cycle Management

• Continuous, real-time reconciliations
• Across multiple
• Data Sources
• Markets
• Systems

Trade Date (TD)
Trade Date (TD)
TD
Settlement Date

• Trade Executions

• Settled Trades
• Cash Movements
• Securities Holdings

• Pending Trades

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Technology in CLSA

• Built on well defined Architecture
• SOA (Service Oriented Architecture)
• Layered Structure with common and function
  specific components
• Extensive use of tool kits
• webMethods (EAI), TLM, Brio, webServices, BPM,
  Java/XML
• Application Development
• In House - strategic competitive edge
• Vendor - Commoditised
• Plug and play new markets and functions
• Instant recovery of all major system
• Strategic vendor relationship
• webMethods (EAI, Workflow automations tools)
• Cameron (FIX)
• Smartstream - Smart Reconciliation tools
• EMC (SAN, Legato Application Recovery)
• SUN (Servers and JAVA)
• EQUANT, MCI Singtel (telecom)

17
Industry Accolades

• Ranked by clients for offering consistent client
  services pre/post trade across all Asian Markets
• CIO 100 Honouree 2004 By CIO Magazine for
  Innovative of technology
• CIO 100 Honouree 2005 By CIO Magazine for
  Innovative of technology
• This award recognises the top 100 users of
  technology in Asia pacific across all industries
• Gartner has published case studies on CLSAs SOA
  implementation sighting innovative use of
  technology in the financial services sector
• CLSA implemented a major Service-oriented
  architecture (SOA) project that provided ROI in
  just 7 months. The project delivered business
  agility and time-to-market benefits beyond
  expectations
• IDG magazine Commending on CLSAs recovery
  facilities
• CLSA has become a poster child for optical
  SANs
• The project is notable on several fronts
  First, CLSA replaced an ATM network with an
  optical DWDM CLSA also incorporated Fibre
  Channel SAN services into the optical network,
  increasing overall system availability
• One and only working model in financial
  service sector in Asia Pacific