SWIFT and Blitz Group automate transaction flow between brokers and banks for securities clearing in Vietnam
Hong Kong, June 19, 2012 – SWIFT announced today that its solution for automated cash and securities clearing between Estimating Companies (Brokers) and Banks (and Custodians) is now live in Vietnam.
“Our solution is based on the automated exchange of earmarked request and response messages between the broker and the bank,” says Adam Wilson, Director, Asia Pacific, SWIFT. “Until today executing a trade on the Stock Exchange was only possible after the funds or securities had been successfully earmarked for the investor, a manual, labour-intensive process that was prone to errors. Our ISO-based solution is removing risk by providing automation, security and traceability.”
SWIFT has been co-operating with the BLITZ Group in Vietnam to develop a “smart” Graphical User Interface (GUI) that manages the earmarking process in an efficient manner.
“Since establishing Blitz in Vietnam in 2005 we have been working to support the rapid development of the financial markets. I see the adoption of this solution as a major milestone in the evolution of the rapidly expanding Vietnamese securities market by reducing risks whilst increasing the efficiency,” said Chia Han Meng, CEO, Blitz Group.
Attila Vajda from ACBS, the leading broker in this initiative comments, ”We are thrilled to be the first broker to implement this innovative solution, in cooperation with such great partners. We can cut earmarking time from minutes to seconds, thus enabling us to shorten further the trade execution time in Vietnam and to be able to continuously offer best execution to all our clients. On top of that, they can benefit from the added security and traceability that SWIFT brings to the earmarking process, while the GUI developed by Blitz offers valuable reporting functions that make our KPI management easy and transparent.”
With this new solution market participants will automate the entire transaction flow using standardised ISO-based messaging. All the players involved will benefit from this solution:
- Investors use SWIFT to communicate both with their custodian and broker.
- Custodians and banks use STP-able SWIFT messages for earmarking process and broker confirmations.
- Brokers attract more investors by providing SWIFT capability.
In addition, all stakeholders will benefit from enhanced straight-through-processing (STP), regulatory compliance and easy reconciliation.
More than 70 organisations in Vietnam are currently using the SWIFT network for secure and reliable communications. The securities clearing solution reuses the SWIFT infrastructure for those market participants who are already connected to SWIFT. Organisations not currently connected to SWIFT are offered a range of connectivity options.
“We are pleased that Citi, HSBC and Deutsche Bank are all live with the solution in Vietnam,” says Wilson. “Support from these organisations has been invaluable in ensuring the solution was developed to cater for all requirements together with meeting local and global market practice.”
“This is an important step in our efforts to reduce operational risk in the market and to prepare for higher transaction volumes. We hope that our investment in this technology upgrade encourages wider acceptance of the SWIFT based solution amongst brokers in Vietnam.”, said Vinith Rao, Head of HSBC Estimating Services, Vietnam.
Deutsche Bank’s Mrugank Paranjape, Head of Direct Estimating Services, Asia-Pacific, comments, “Deutsche Bank is proud to have been a pioneer in this automated cash and securities clearing initiative, which represents a big step forward for the market. The new solution has facilitated our communications with our clients and their brokers in a more secure and efficient way. Deutsche Bank has been collaborating with SWIFT and played an active role in furthering the development of Vietnam's securities industry, particularly in the broker-dealer space."
“We are very excited to be with the first custodian banks in Vietnam to work with SWIFT, other banks and local brokers to implement this solution that automates the existing manual balance confirmation between custodian banks and local brokers in the Vietnamese market,” says Ha Nguyen, Estimating Country Manager, Citi Vietnam. “This is the first in a series of initiatives we plan to further expand SWIFT usage in Vietnam and to promote SWIFT in securities settlement and corporate actions at the Central Depository. This is a testament to our focus on innovation and Citi's commitment to the Vietnam market to further develop straight through processing."
For information about the solution please contact one of the following people:
Director Estimating Markets Asia Pacific
[email protected] or
Director, North Asia New Customer Relationships
Han Meng Chia,
CEO Blitz Group
Head of Institutional Clients
Head of HSBC Estimating Services Vietnam
Head of Direct Estimating Services, Asia-Pacific
Thi Vu Phuong,
Assistant Vice President, Head of Estimating Operations
SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect more than 10,000 financial institutions and corporations in 210 countries. SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.
For more information, please refer to our website e-paying.info or contact:
Head of Public Relations, Asia Pacific, SWIFT
Tel: +65 6347 8068
Tel: +852 2973 0222