NeMa Insider - June 2015

@NEMA_FORUM

9-11 JUNE

insider

2015

Europe’s Premier Network Management Conference

15 years of NeMa Take a stroll down memory lane Page 5

Process Vs Reality ‘How can we marry best endeavours with financial liability? Page 8 1

Fintech Opportunity or threat?

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CONNECT Experience NeMa from the palm of your hand

NeMaConnect is the official app of NeMa International 2015, allowing you to network with fellow delegates, view the event schedule, and customise your own personal agenda for the event.

Features include: • View the up-to-date event program • Access the full attendee list • Network via the secure messaging system • Schedule meetings with fellow delegates online • Receive notifications about the event direct to your phone • And much, much more.

Download NeMaConnect to your mobile or tablet device now and enhance your NeMa experience.

Download Now: http://is.gd/NeMaAthens Prefer to use your laptop?

The website is also available as a web portal, allowing delegates to view the full agenda and network with delegates online from their laptop or desktop computer.

To view the NeMaConnect web portal go to: http://is.gd/NeMaAthensOnline

Need a hand?

Drop by the Digital Media desk in the exhibit area for help downloading NeMa Connect to your device and using the app.

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The app will be available until one week after the close of the conference

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CONTENTS Title

Author

NeMa through the years

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Welcome

Andrew Barman, NeMa International

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Final countdown to the T2S launch

Marc Bayle, European Central Bank

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Process vs reality: How can network managers marry best endeavours with financial liability?

John Gubert, JSG Consulting

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Financial crime compliance principles for securities custody and settlement

Urs Stähli, ISSA

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CEE Update: Where is the network management industry at in Central and Eastern Europe?

Julia Romhányi, Unicredit

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Social media’s role in political forecasting and analysing terrorism risks and civil unrest

Kirsten Parker, IHS

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The Polish financial sector – leading edge of global innovation

Iwona Sroka, KDPW

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Fintech: Opportunity or threat?

Dr Chris Sier, FiNexus

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T2S: Are you ready?

Mike Clarke, Deutsche Bank

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Re-imagining the future: Strategy, structure and innovation

Tim Howell, EuroClear

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Showtime: Moving towards an age of transparency

Laurence Caron, BNP Paribas

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Build, buy or outsource? Tax reclaims and class action recovery

Bill Salva, Goal Group

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The perfect day in Athens

Christos Garoufalis, National Bank of Greece

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A Eulogy: Giulio de Cerbo

Dominic Hobson, COO Connect

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NeMa Profiles: Getting to Know You

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NeMa Quiz

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NeMa Gallery

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Special thanks and credits: NeMa International Conference Director: Andrew Barman NeMa Insider editor: Lucy Eldred Contributors: Marc Bayle, John Gubert, Urs Stähli, Kirsten Parker, Chris Sier, Chris Garoufalis, Sponsors: Business Control Solutions, KDPW, SEB, Deutsche Bank, UniCredit Bank Austria, Goal Group Limited, National Bank of Greece, EuroClear, Cairo Amman Bank, BNP Paribas, Keler, London Stock Exchange Sponsorship team: Jeffrey Ong Design team: LockOn Productions Print Team: Trio Offset If you are interested in submitting content for future NeMa mag, please email lucy.eldred@informa.com If you are interested in sponsorship options for future NeMa magazines, please contact jeff.ong@informa.com

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Through the years 2005 & 2013 2004 & 2012 2006

2003 2002

2001 2014

Warsaw

Brussels Prague

Paris

Vienna

Budapest Ljubljana

Geneva

Dubrovnik

2009 2007 & 2011

2010

Malta

Athens

2015

2008

Cyprus

Austria

Czech Republic

Greece

Poland

Belgium

Cyprus

Hungary

Slovenia

Croatia

France

Malta

Switzerland

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#NEMAATHENS

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WELCOME We hope you will enjoy this first edition of NeMa Insider, and we are sure that over the coming months the custody and post-trade story will move into exciting new territory. As we all gear up with major initiatives, whether it be the T2S project finally going live, or the Saudi market opening up, there are always stories to report on. But for us as a community, it is always useful to take stock of where we have come from, and sometimes contemplate the past.

In this spirit, we would like to take a look back.

NEMA

THE EARLY YEARS A hot June day in Geneva (2001) sees the launch of NeMa. With the hotel air conditioning struggling to cope, David Hardman of RBC Dexia opens the event as NeMa’s first ever chairman and we are off – NeMa has arrived.

The first day of sessions with around 50 attendees sets the tone for a collegiate atmosphere and relationship building. The low key drinks reception in the hotel is followed by various groups heading down to Lake Geneva for a spot of al-fresco dinner, followed by nightcaps and chats in the balmy summer air. Day Two sees Bruce Lawrence in the chairman’s role, and the first speaker up (you know who you are) sees a mishap involving a spilt glass of water over the podium laptop which is rendered useless. Bearing in mind less than 10% of people carry laptops back in 2001, David Hardman is brought to the rescue and loans NeMa his personal one. However, this mishap results later in the day a threat of criminal damages being raised by the hotel against yours truly, including the police being summoned.

The dispute resolved, a rather late departure for the airport ensues. But no matter - the NeMa flag has been hoisted and we set sail.

Belgium. June 2002. The world is in a very different state following the life changing events of 9/11 the previous September in NYC.

International travel has been cut by many companies, and contingency planning, risk and KYC are thrust to the top of the agenda. This noticeable drop in international and non-essential travel sees the audience at NeMa fall to just 30 attendees at the Brussels event. But this small group bonds in such a strong way, that the genesis of the true NeMa spirit is brought into being. As chairman, Ross Whitehill of Thomas Murray kicks off proceedings on Day One. Following a long day’s discussions on the new frameworks for sub-custodian selection in a post 9/11 world, pricing and the much loved reciprocity (!), the whole group of 30 (no pun intended) gathers together in an Irish bar near the Bourse. The camaraderie is very apparent and a unified bonding is ensured. Following a break for dinner, and as it is the early stages of the World Cup, many end up at a Brazilian bar showing match highlights, some others venture off at to a Korean karaoke hotspot (which is showing the football too – a result of being one of the host nations that year). Coupled with this, and a full day of sessions on Day Two, many of the UK based crowd leave with weary, but content faces on the Eurostar home bound back to London.

And so to Paris (2003). Numbers are up! 75 attendees this year and the first

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sponsors come on board: ABN Amro, Deutsche Bank and Clearstream. The Art Deco charms of the old dame of Hotel Lutetia hosted NeMa this year too, with notable former hotel guests including Pablo Picasso, Charles de Gaulle, James Joyce and Peggy Guggenheim: this was the place to be for the world’s artists in the 1930s. But most crucially for us at this year’s event were the discussions off-the-record between HSBC and Bank Austria. And they were discussions that would later set in stone the lead partners of NeMa for the coming years right up until now. Mark Davies and Attila SzalayBerzeviczy lobby hard and by the time we reach Budapest in 2004 we have our two lead partner sponsors. The rest is history...

And so here we all are in Athens: at the 15th Annual event. What a journey it has been so far, and it is exciting to think of where we may journey over the next 15 years.

So many vivid memories, so many friendships forged and so much industry expertise brought together.

Long may it continue!

Andrew Barman Director NeMa Global Series

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The new pan-European platform for securities settlement in central bank money is set to go live on 22 June 2015. TARGET2-Securities (T2S) will soon become a reality, thanks to the efforts and the dedication of the T2S Community over the past seven years.

The participating CSDs and central banks will migrate to T2S in four consecutive waves between 22 June 2015 and 6 February 2017. The last year has been particularly intensive for the CSDs and central banks of wave 1. They have passed through several stages of user testing in order to ensure a smooth connection to the T2S platform and good interactions with clients, other CSDs and central banks.

The T2S Community is now in the last stages of preparation. Not only are the T2S operations being tested, but also the migration to the platform.

Several rehearsals of the pre-migration phase and the migration weekend itself have also taken place. The ECB, as a coordinator of the T2S project, has supported the CSDs and central banks of wave 1 throughout the whole process of getting ready for T2S. All of the T2S stakeholders are highly committed. And, looking beyond 22 June, our team stands ready to assist in equal measure the next migration waves in their preparations for T2S. Wave 2 is scheduled to migrate in March 2016, followed by Wave 3 in September 2016 and Wave 4 in February 2017.

Contributing to post-trade harmonisation is also among the key objectives of T2S. Back in 2011 the T2S Advisory Group identified a number of T2S harmonisation activities. Since then, the T2S Community has been working to

create a single rule book for posttrade processes (messaging protocols, operating hours, corporate actions, etc.) across the 21 European markets, encompassing multiple CSDs that will connect to T2S. All T2S markets are committed to achieving full compliance with the endorsed harmonisation standards. The latest update on their compliance status is presented in the Fifth Harmonisation Progress Report published in April 2015.

The work on post-trade harmonisation continuously contributes to further integration of the European financial markets. Even before its launch, T2S has already changed the securities settlement landscape in Europe. We believe that after going live it will act not only as a bridge between the European CSDs, but also as a gateway for making Europe a more attractive place to invest and trade.

SINCE 2011, THE T2S “COMMUNITY HAS BEEN

BayleA WORKING Marc TO CREATE SINGLE RULEBOOK FOR POST-TRADE PROCESSES ACROSS THE 21 EUROPEAN MARKETS, ENCOMPASSING MULTIPLE CSDS THAT WILL CONNECT TO T2S. 7

Marc Bayle Director of General Market Infrastructure and Payments at the European Central Bank.

Marc will be presenting a T2S Update on Wednesday 10th June in the ‘T2S and Ops in Focus’ stream.

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NEW THINKING The network manager is no longer an industry and market expert visiting local agents for a friendly check on market practise and supplier procedures. Network management is now an enterprise wide function, facilitated by the network manager, and battling to meet the demands of its clients and regulators. The scope of liability has moved in recent years from being a best endeavours review of risks and operational process to one of managing the custodians’ real financial liability for those large pools of client assets.

SOUNDNESS “OFTHE OPERATIONS

As a network manager, one’s primary concern is asset safety.

But how can one prove asset safety? Is it the same at a time of crisis as it is in theory under a sensible interpretation of local law? Are assets really segregated or can they be accidently commingled somewhere in the ownership chain, especially if there are exceptional peaks in market activity? Is finality as easy to prove as the European Finality Directive implies? Is there case law to support the assumptions made?

And what exactly does insurance cover do and how valuable is it for the client?

to all investors in a loss situation irrespective of the exact laws and regulations governing their activity?

AIFMD and UCITS V are fine, but how does one evidence that the structures used are fully compliant at all times? Is the due diligence on hedge fund assets lodged with prime brokers adequate? Are the

bankruptcy remote vehicles used in some Central Counterparties really totally ring-fenced? Where does custodian and sub custodian liability stop and when, if ever, will losses be deemed to have been beyond the control of the agents?

And is the legal advice provided, by third parties or the agent themselves, contractually binding or a carefully scripted advisory document? How does one prove data security when too much open information creates risk?

What should be the frequency and nature of due diligence exercises?

When should one pull the plug on a market as too risky; and what liability is assumed if this is not done? Who carries cash risk for non-investment grade, or even marginal, suppliers?

Won’t regulators expect most favoured nation status to apply

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IS PARAMOUNT TO A SOUND RELATIONSHIP.

The trouble with all such questions, which are just some that the network manager needs to answer, is that they are unanswerable with total certainty but need to be assessed and acted upon by the network manager. As I am a true independent, perhaps I can try to answer, at least, some of these questions. First, the network manager has to be highly prudent in their approach as a bad judgement, in most markets, could severely dent most Global Custodian profit and loss accounts, and, in the largest markets, could undermine their balance sheets.

Therefore high risk markets should be a no go zone!

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PROCESS VS REALITY: HOW CAN NETWORK MANAGERS

MARRY BEST ENDEAVOURS WITH FINANCIAL LIABILITY?

On asset safety, I would look for specific certification of the account structure, down through to depositories and clearing houses, for each agent and validated by direct and, hopefully, binding confirmation to the buyer from a major and independent law firm. On finality, I would look for similar legal advice to cover all instruments including cash.

Given the quantum of risk, dependent on such advice, careful attention needs to be placed on its contractual basis as well as the legal and financial soundness of each obligors’ undertakings. And I would check out the agents’ and lawyers’ insurance both in terms of the potential allocation in the event of an insurable loss arising, but also the durability of the cover beyond such an event. I would also note that it would be logical to accept that cover, in all such cases, is unlikely to be total and tail end risk will travel up the supply chain through to the balance sheet of the main global custodian.

The prime broker is a sub agent of the custodian and should be handled as such. Logically prime broker risk should be a parent company risk and due diligence

on the prime, irrespective of their preferences, should either be complete and substantive or they should be barred from holding assets for a fund. Credit ratings must be monitored for all agents and there is a point, before a firm becomes non-investment grade, where it is prudent for a custodian to revisit any decision to hold assets with them. Perhaps non cash assets would be secure, but cash is an on balance sheet item and the risk of loss is clearly that of the sub agent or global next in line.

Relationships can obviously be structured to reduce these risks.

Operator style accounts for the client at agents transforms relationships although it will not necessarily transform liability.

The soundness of operations is paramount to a sound relationship.

And a careful audit of supplier procedures is an imperative during due diligence. That leads me to a final point. How frequent should due diligence be? The answer is clear. Due diligence has to be an on-going exercise, for sudden event risk is no excuse and usually at the door of the parties in the custodial chain. We have long lost the days when due diligence

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was a best endeavours process. It is now as close to an all-purpose asset guarantee as one can get. I sometimes wonder how network managers sleep at night these days!

John Gubert Principal of JSG Consulting John Gubert will be moderating a panel discussion on Due Diligence in Practice on Thursday 11th June.

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FINANCIAL CRIME COMPLIANCE PRINCIPLES FOR

SECURITIES CUSTODY AND SETTLEMENT Omnibus Accounts have come under increased regulatory scrutiny.

Yet, there are ways to satisfy various stakeholders by enacting best principles operating under omnibus account set-ups.

SECURITIES INDUSTRY FACING INCREASED REGULATORY CHALLENGES Until recently, the regulatory burden laid on the securities services industry was relatively light. Post financial crisis, a myriad of regulatory initiatives were taken impacting the securities services intermediaries.

And recent events suggest that custodians now face an even increased level of regulatory risk. Earlier last year, for example, one of the major International Central Securities Depositories paid over USD 150 Mio to settle potential civil liabilities. It had served as the channel by which the Central Bank of a sanctioned country held securities in the USA. There are other recent examples that could be cited.

SECURITIES OMNIBUS ACCOUNTS The securities in the above case were held in an omnibus account structure in which their beneficial ownership was not transparent to the sub-custodian in the US. Such structures substitute intermediaries for beneficial owners and commingle fungible interest in securities. This account set-up is widely used not because custodians wish to conceal beneficiaries, but because they are operationally efficient. Evidence also suggests that transactional activity is higher in markets with omnibus accounts.

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REGULATORY DEVELOPMENTS Traditionally, the regulators’ view has been that providers of omnibus accounts need not look through to beneficial owners. General consensus was that custodians judge the KYC procedures and due diligence processes of holders of omnibus accounts, next to the quality of the regulatory regime of the account holder’s country. Yet, times keep changing, as evidenced by some recent motions: •

OFAC public statement January 2014: “Omnibus and custody accounts require scrutiny to ensure compliance with relevant sanction laws.”

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UniDroit is pressing for segregation of securities in the name of the beneficial owner as a principle of international securities law.

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The interpretative note to FATF’s Recommendation 13 of February 2013 stipulates that similar criteria on anti-money laundering should be applied to “securities transactions or funds transfers, whether for the crossborder financial institution as principal or for its customers”.

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FinCEN published in August 2014 a Notice of Proposed Rulemaking that would enhance Customer Due Diligence requirements for financial institutions by requiring covered financial institutions to identify, and verify the identity of beneficial owners of their customers, with certain exceptions.

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During its Symposium in 2014, ISSA, the International Securities Services Association, comprising 100 representatives from the securities services industry, discussed potential solutions to proceed, such as designing best practices along the Wolfsberg Group principles for correspondent banking or regulating the conditions under which omnibus accounts are used.

ACTIONS FOR THE SECURITIES INDUSTRY Over the past year, an ISSA Working Group designed best practices for the securities industry to operate omnibus accounts with a view to satisfying the requirements of various stakeholders.

ISSA will soon consult with the relevant regulators and submit it to the ISSA membership.

Be sure to follow progress on: www.issanet.org

Urs Stähli ISSA Secretary

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CEE UPDATE: WHERE IS THE NETWORK MANAGEMENT INDUSTRY AT IN CENTRAL AND EASTERN EUROPE? The new decade started with a severe economic crisis, but also with the hope that closer European cooperation will bring growth and synergies not only in the Western part of Europe but also in the Central – Eastern European region. CEE is still highly heterogeneous when it comes to the state of development of its capital markets or post trading infrastructure. While IT solutions in the post trading environment in Austria are highly matured, some countries like Ukraine have quite a long way to go.

T2S is definitely the catalyst of a more harmonized infrastructure for post-trade services and standards, and will contribute to achieve stronger financial integration not only in countries which join T2S but also the less developed CEE markets who will need to work on their national practices and infrastructures in order to increase operational efficiency and stay competitive. Croatia will soon be establishing its own CCP thereby strengthening the safety of the settlement process in line with the EMIR regulation while, in Poland, the introduction of netting will lead to a more efficient way to handle settlement and liquidity.

Today the custodian business has evolved into a complex industry, where the range of information, types of asset protection and innovative solutions provided by banks have become the focus of business participants. Much of the work done by the custodian banks is in the asset servicing area, which require quick reactions and quick distribution of information from market participants.

This increases the need for innovation: to invest further in technology and automate more processes. Needless to say, experienced staff on the ground is a vital and competitive edge for providers, as securities holdings and activities become increasingly diversified and complex.

One of the persistent problems in most of the CEE markets (e.g.

Slovakia, Bosnia, Serbia, etc.) is low liquidity. At the same time markets like Slovakia or Bosnia run 2 separate CSDs in parallel, which will need to be rationalized at one point of time in order to reach efficiency and economies of scale.

There are a few key challenges for custodians to maintain growth and profitability in a highly competitive environment which is resulting in a progressive decrease of pricing levels.

The revenue compression concurs with the high investment need and growing regulatory and compliance requirements which, in turn, will

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definitely squeeze out providers where economies of scale are not achievable within the foreseeable future. Post trade service providers will need to react quickly to the new competitive landscape and clients will need to select partners that best fit for their business model and risk profile.

Julia RomhĂĄnyi Head of CEE GSS UniCredit

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SOCIAL MEDIA’S ROLE IN POLITICAL FORECASTING AND ANALYSING

Social media has changed the way companies advertise and the way friends communicate.

It has also changed the way protesters mobilise, the way terrorist groups recruit and the manner in which politics are debated.

Indeed, a wide range of groups use social media to communicate, recruit, organize, develop their ‘brand’, and share information.

TERRORISM RISKS AND CIVIL UNREST

For example, groups such as Islamic State, al-Qaeda and al-Shabaab use YouTube, Twitter and other content communities, micro-communities or blogs to communicate their strategic aims and advertise attacks or threats. Individual fighters also use instant messaging and similar tools to communicate tactical information.

The fluid nature of social media provides a challenge for governments. Indeed, account suspensions during the Westgate siege in Kenya did little to suppress al-Shabaab’s ability to disseminate messages via Twitter, as the group simply set up new accounts. Likewise, fighters in Iraq and Syria use multiple private platforms, changing these as new tools become available or in response to fears their communications have been compromised. Also social media is often a forum for mobilizing protests, and, in part due to the wide reach of social media, isolated incidents (such as the 10bus fare hike in Brazil, a crime on a university campus in Venezuela, or a small demonstration in Gezi Park) escalate rapidly.

As a result, social media has shaped the role of the political analyst. It is a critical source and tool for data, analysis and forecasting. Terrorist groups use social media, so this is a new window through which to analyse terrorist groups. For instance, a dispute within the al-Shabaab leadership was revealed on Twitter and YouTube in 2012 and 2013, providing early warning of factionalisation of the group. With careful collection and verification, it is also possible to gather data about attack patterns and territorial control in conflict environments and, for example, build a fuller picture of armed groups’ activity on the ground in Iraq and Syria and to spot where those groups may be gaining ground or weakening.

Analysis of social media can generate insight into popular opinion, emergent social movements and situational awareness of fast-moving complex environments (such as protests or wars). Like any data source, it has limitations; however, it also has demonstrated value when used as part of an All Source Open Source intelligence process.

For instance, there are two key ways of analysing Twitter data, the ‘thin’ and the ‘thick’. The former involves monitoring selected influencers’ social media accounts and tracking their output for signals of a changing risk environment. The latter involves tracking large quantities of activity to identify trends or spikes in the volume or sentiment of communication.

Image Source: www.pen.org/dissident-blog/facebook-revolution

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There is evidence that social media data used this way has predictive value to identify early warning of protests, social issues or hotspots for large scale unrest. For instance, in a retrospective analysis of 3.5 million tweets during and preceding the unrest in Turkey in 2013, we found that an uptick in social media chatter using protestrelated terms preceded Turkishlanguage news reports of the protest on May 28th 2013. There are many other such examples of social media analysis providing forewarning of protests as well as critical situational awareness as protests evolved, including in Brazil, Ukraine, Bahrain, and the UK, to name a few. It is also possible to run ‘community detection’ algorithms over the social graph of people tweeting about an issue. These algorithms look for user clusters who are more closely connected with each other than with others in the network (because, for example, they re-tweet each other more often). This can help track whether new protest movements are gaining traction or whether fragmented groups are beginning to cooperate.

However, there are important factors that social media analysis must take account of. First, social media analysis requires understanding of the social dynamics, politics, language (including slang and emoji), and the unique ways communications differ by country. In Brazil, for instance, protests are predominately organized on Facebook, whereas Twitter has been a popular platform for political debate in the Middle East. Some countries – like China or Rwanda – have popular local platforms not used widely elsewhere.

Second, social media analysis poses challenges for information verification and validation. A large proportion of content is inaccurate, and social media is a ‘contested commons’ in which some actors are spreading disinformation. Finally, given the sheer volume of material on these platforms, the proverbial haystack is becoming larger by the day, underscoring the benefit of analysing social media in a structured way through the lens of traditional intelligence tradecraft.

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THERE IS EVIDENCE THAT SOCIAL MEDIA DATA HAS PREDICTIVE VALUE TO IDENTIFY EARLY WARNING OF PROTESTS, SOCIAL ISSUES OR HOTSPOTS FOR LARGE SCALE UNREST.

WHAT IS ‘ALL SOURCE’ OPEN SOURCE INTELLIGENCE? In order to forecast the geopolitical and business environment, IHS Country Risk uses an ‘All Source’ open source intelligence (OSINT) approach.

This means that we collect data from a wide range of sources in order to spot trends, outliers and indicators of change. Some examples ‘All Source’ open source data we collect include social media intelligence (SOCMINT), human intelligence (HUMINT) through our structured analyst and source team, geospatial intelligence (GEOINT), imagery intelligence (IMINT) and full use of open-source datasets such as country statistics, public websites and media as well as other structured publicly available data.

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Kirsten Parker Senior Director of Country Risk Analysis and Forecasting at IHS To hear more about how technology affects geopolitical risk, attend Kirsten’s session Global Risk Environment in 2015: The Return of Geopolitical Risk on Tuesday 9th June.

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THE POLISH FINANCIAL SECTOR -

Poland can be proud of its achievements in the financial sector – a branch of the Polish economy which was built up almost from nothing in the 25 years of transformation.

During this period, phenomenal progress has been made that enabled the Polish financial sector to achieve a significant position in comparison with other European and global markets and become an undisputed leader in certain innovative arrangements, notably in the area of retail payment systems.

LEADING EDGE OF GLOBAL INNOVATION

Over the past 25 years everything changed.

Poland went from state ownership to private companies. From having no capital market, payment clearing systems, independent central bank or proper supervision, to having a modern financial market infrastructure.

Polish financial market nowadays can be describe as innovative, compliant with internationally recognised standards and secure, and is also a safe location for investments.

Looking at the financial market and its infrastructure it is really worth to notice how the KDPW Group built Central Europe’s leading clearing and settlement infrastructure. Thanks to services offered in KDPW (the Polish CSD) and KDPW_CCP (the clearing house) the quality and safety of the Polish financial market and its attractiveness to international investors were strongly improved. KDPW Group offers the services of an authorised CCP, a registered Trade Repository, a Global Numbering Agency (ISIN, FISN, LEI) and is also preparing for CSD authorization.

In 2011, KDPW separated its clearing house from its central securities depository to create a more robust distinction between its two lines of business.

KDPW now has 65 participants, while KDPW_CCP has 38. In April 2014, KDPW_CCP became the third clearing house in the European Union to be authorised to clear OTC derivatives under the European Market Infrastructure Regulation. Our services are provided for the most dynamic economy in the region but we are interested in attracting more market participants, not only domestic but also foreign, to build economic scale.

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Thanks to the right policies, regulations and supervisory standards, the Polish financial sector made it safely through the crisis, none of the banks defaulted and, importantly, the sector grew.

trades: Forward Rate Agreements, Interest Rate Swaps, Overnight Index Swaps, Basis Swaps, REPO. KDPW_CCP is now expecting the authorization of euro OTC derivatives.

And the Polish economy?

According to European Union forecasts, Poland ranks third in expected GDP growth in 20142019 among all EU member states.

This is a result of the expected faster economic growth in Poland, as well as the economic growth of Germany, Poland’s main trade partner. The optimistic forecast is also driven by the anticipated increase of foreign investments.

TRADE REPORTING TO KDPW_TR

OTC CLEARING IN KDPW_CCP The Polish Financial Supervision Authority (KNF) has authorized the clearing house KDPW_CCP on 8 April 2014, confirming that it fulfils all requirements for such institutions under the EU Regulation EMIR. KDPW_CCP is equipped with a state-of-the-art risk management system (based on the SPAN methodology for organized trading and Value at risk model for OTC clearing), a multitier clearing guarantee system (cash and derivatives market margins, clearing fund, own capital of the CCP). KDPW_CCP’s own capital is currently c. EUR 52 M (PLN 228 M). The EU authorization allows KDPW_CCP to operate as CCP across the European Union including the addition of the OTC derivatives market to the authorized scope of the clearing house’s services. Along with the authorization application, the clearing house has filed the list of OTC instruments to be cleared, which are derivatives cleared in PLN. KDPW_CCP clears trades in instruments denominated in PLN, including the following OTC

KDPW trade repository KDPW_TR offers its services to all companies obligated to report, not only in Poland, but in whole Europe. According to EU regulations, the reporting obligation may be delegated to a central counterparty: on the Polish market, to KDPW_CCP. KDPW_CCP does not charge any fees for intermediary services; consequently, reporting of derivatives contracts by KDPW_ CCP on behalf of a clearing member or its clients does not involve any additional costs to clearing members other than fees charged by KDPW.

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is the result of efforts by the whole Polish market to promote the attractiveness of domestic companies, their growth perspectives, a diversified range of traded instruments and an efficient and well-developed posttrade infrastructure. The KDPW Group has for many years been implementing a range of projects in response to the changing, more globalised nature of the markets.

SERVICES FOR INTERNATIONAL INVESTORS As the Polish market has grown, it has begun to attract foreign investors, who currently account for half of all trading on the Warsaw Stock Exchange. They provide additional liquidity and capital, which in turn helps fuel IPOs. Not far behind foreign investors, come foreign members of its infrastructure institutions – first to the exchange, later to the CCP and CSD. This is a sign that the market is becoming more mature, that it meets the exacting standards of Western financial institutions and that it inspires confidence in the future. This is true for the Polish market as well.

The increased interest of foreign investors and intermediaries

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Iwona Sroka Ph. D. President & CEO of KDPW and KDPW_CCP

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FINTECH

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There’s a lot of noise about Fintech. So prominent is the sector that even Boris Johnson, London’s Mayor, has quipped about it, claiming that the Tory Government was responsible for the development of “Fintech, biotech, medtech and Aztec”.

“

So what is Fintech? The best definition I have heard comes from Samantha Ghiotti, a Director at the de facto private equity experts on the Fintech sector, Anthemis Group. She defined Fintech as “the R&D function of financial services in the digital age....less to do with technology, more to do with business model reinvention and customercentric design.” This is helpful as it clearly indicates that Fintech isn’t just about ‘tech’, although some form of innovation really does have to be involved, and it is also not just about consumer but more about customer. This means that Fintech isn’t just about consumer-facing B2C propositions, such as new mobilepayments methods (for example), it is also about the B2B space where customers can be institutional. A great example of this institutional Fintech market involving both technology and disruptive business model change is OASIS. OASIS is an open-architecture catastrophe loss-modeling framework company for the insurance industry

that has been winning awards and accolades over the past 12 months.

As the CEO, Dickie Whitaker, said in a recent article in Insurance Day: “We’re trying to change the industry very quickly and with that comes resistance from all sorts of quarters.

You’re effectively trying to say to a senior individual all he/she has known for the past 20 years can be improved and that’s a hard message to sell”.

Although technology is the enabler, the real innovation is changing the business model or, as Dickie implies, in changing entrenched ways of thinking.

THE R&D FUNCTION OF FINANCIAL SERVICES IN THE DIGITAL AGE....LESS TO DO WITH TECHNOLOGY, MORE TO DO WITH BUSINESS MODEL REINVENTION AND CUSTOMER-CENTRIC DESIGN

Fintech has also evolved away from traditional suppliers of Fintech (large incumbents such as Simcorp or even Microsoft) to a rapidly evolving marketplace of small, innovative start-up firms that use new technology to bring financial services directly to consumers. And it is this emergent space that has created not only the noise, but also some of the risks.

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Not many people like to talk about the risks and the sector has received enthusiastic support from all quarters.

Official endorsement, initially of Level 39 (the self-proclaimed ruler of the Fintech incubator and accelerator space in London), has now been given to Innovate Finance (the ‘tradebody’ for Fintech…also based not surprisingly at Level 39); nearly every bank has a captive investment fund directed at the sector, albeit only for relatively vanilla propositions that support core products and markets; and there are a range of ecosystems springing up both regionally in the UK (Leeds, for example) to internationally (Copenhagen Fintech Innovation and Research in Denmark, for example).

Almost everyone is enthusing about the sector, but is this just another bubble?

Well, maybe or maybe not. But chief amongst those who have considered the wider implications is, I’m very glad to say, the UK Chancellor George Osborne. Earlier this year he commissioned a report on the Fintech

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OPPORTUNITY OR THREAT?

€

$ sector from the UK Government Office for Science. Goaded, I presume, by some prescient wisdom brought about by the overly-zealous, and therefore worrying, lobbying from the pro-Fintech faction, he asked for GO Science to level their scientific expertise and method (via a process called a Blackett Review) at understanding the sector. The final report “Fintech Futures - The UK as a World Leader in Financial Technologies” was published last month and offered an altogether more cautious view of Fintech, as well as a set of recommendations designed to help the UK maintain its position as market-leader in this space. I was fortunate to be part of the advisory group that prepared the input papers and the final report. What was most interesting for me was seeing the tension between the scientific and independent participants and the process they were following, and the members of the ‘pro-lobby’ that had to be part of the advisory group for balance. And, at the end of the day Sir Mark Walport, the UK Government’s Chief Scientific Adviser, managed the process brilliantly and really got the report right. In summary: Cautious and qualified optimism.

Here is a personal thought around this note of caution: What happens when technology, such as the decentralized consensus ledger principal that stands behind the blockchain and bitcoin, results in a large reduction in the need

for middle and back offices? Well great, right? Massive reductions in operating cost all round, have a cigar!

But…will the cost savings actually be passed onto the ultimate beneficial owners, otherwise known as the consumer, or will they be absorbed as corporate profitability? Again, great as companies make more profit and shareholders are happy! But…does the UK Government derive more taxation from companies, or individuals? Tricky question, unless you are a certain wellknown coffee company or, indeed, any bank. The real problem though doesn’t lie with where the costs savings will end up as profit; the real problem lies with the loss of jobs from the middle and back office and how THAT will impact taxation. A lot more than 50% of those employed in financial services are in the middle and back office and are paid very well compared to other sectors, so the Government stands to lose a lot of taxable income in the short term for potential increased productivity in the long term. That’s a tough call for a Government with a 5-year horizon; I could wax-lyrical on some other innovations that present risk under a guise of gung-ho enthusiasm, equity crowd-funding for example, but I will save that for another day. Perhaps even for the panel I’m on in June, so please do ask a question. In the meantime, let me end with this. Fintech IS the future.

Technology-enabled innovation is our

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direction and the velocity is really up to you. In the world of the network manager, digital entrepreneurs cracked the problem of managing complex networks some time ago.

Social networks have superseded the physical limitations of our neo-cortex, encapsulated in the ‘Dunbar limit’, and it is only a matter of time before someone will find a way to use such networks in the context of your market. Perhaps you have thought of this, perhaps you haven’t. I hope for the former.

Dr Chris Sier Director of FiNexus Dr Chris Sier will be taking part in the Chatham House Rules session Innovation – what will really take the industry forward? on Wednesday 10th June.

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T2S:

ARE YOU READY? After years of talk and anticipation, TARGET2-Securities (T2S) is at a critical stage. Mike Clarke, part of the Investor Services Product Management team at Deutsche Bank, believes that the Bank having worked intensively towards June 2015, the planned first wave of CSD migration - is ready.

The question, he writes, (and it’s one that will only really be answered once T2S gets underway) is how well prepared is the market for what’s about to happen?

Given the various waves of regulatory change that have hit the financial markets since 2008-09, it is no surprise that clients adopted a ‘comply-first’ approach. That’s why straw polls and anecdotal research in the past suggested that a relatively high percentage of people had little knowledge of T2S. As the timeline has shrunk, T2S readiness is no longer theory but very much a reality.

Developing a true understand of what T2S meant for clients may have been a slow process, but we have always positioned it by trying to outline the opportunities and efficiencies that will be created by the platform, rather than merely pointing out the challenges that any regulatory change brings.

We’ve encouraged our clients to look beyond T2S, guiding them through the journey of market change and anticipating, where

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T2S READINESS IS NO LONGER THEORY BUT VERY MUCH A REALITY

possible, what we see as the true impact of T2S. The underlying objective of T2S, quite simply, is to bring harmonised settlement in central bank funds across all European securities markets. It’s important to realise that it was conceived pre-crisis, but was enhanced for delivery post-crisis.

It’s a key part of the natural evolution of the post-trade securities settlement landscape in Europe.

We have taken a componentdriven approach to our own T2S programme, starting with the T2S Hub, a single technical settlement hub that operates through Deutsche Bank AG 20

Frankfurt. Within that, we broke our programme down into components: connectivity; settlement functions (including linking, prioritisation, hold & release; and partial settlement); asset servicing & tax; collateral; and liquidity.

We’ve always believed that the four ‘waves’ of T2S make it a realistic and achievable set of goals. The gaps between the waves provide the necessary breathing space to assess progress, adapt and test systems and, most crucially, learn from each stage.

Naturally, and in line with our universal approach to helping our clients navigate regulatory issues, we have had to work closely with them to ensure they have a plan in place. Likewise, we have seen that many custodian banks and central securities depositaries have completed a lot of good work in advising their clients and participants on T2S and the

#NEMAATHENS

potential benefits. Ultimately, however, we believe that client needs will drive the development of T2S solutions. And in that context, we see enormous competition among providers who not only offer connectivity and settlement to their clients, but also value-added services.

In many ways, T2S can be a toolbox of instruments that can be used to bring greater efficiencies to the market, but they have to be what clients truly need. It is only going to work commercially if our clients are prepared to pay for the solutions that eradicate their problems.

cash liquidity for settlement.

Clients are already coming to us in search of a broad range of T2Sready solutions. At an early stage, we recognised that we had to help them optimise the benefits of T2S by combining our existing in-house tools with those that will emerge in the future. This has yielded early successes, such as our work with a major US bank on consolidating its securities business in Western Europe with a single custody provider, providing the client with the necessary platform ahead of T2S. This type of business is on the increase as the securities industry regroups for change.

Some of those services may be around liquidity, one of the tangible benefits to be derived from T2S. We can move from a very siloed infrastructure approach across the markets where you have got to have direct access and connection to each central bank, and in future be connected to one central bank and access the T2S markets. You could, for example, have a single pool of cash where a sale in Italy can fund a transaction in Germany. It was therefore important we looked closely at our offering for clients around simple

As theory becomes practice, we must not forget that T2S is only the settlement piece of a much larger puzzle that involves asset servicing, safekeeping, clearing and trading. If I may, I will borrow from our own approach in saying that we believe T2S should be seen as a component of a broader set of challenges. These include: single booking locations for transactions; a broad range of functionality; unified inventories for collateral and liquidity; and transparent communication.

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The success of T2S will become increasingly evident as the market harmonisation train gathers steam.

But only if we offer clients a choice of service levels specific to their own business needs, within an integrated global strategy, can we ensure that T2S delivers the multiple market-wide benefits for all participants.

Mike Clarke Global Product Management, Investor Services, Deutsche Bank For more information about T2S visit Deutsche Bank in the exhibit hall at Stand 22.

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RE-IMAGINING THE FUTURE:

We live in interesting times, and operate in an industry that’s ripe for disruption.

It reminds me of the technology sector a few decades back, when hardware and mainframes were at the heart of its industry.

Yet today it’s microprocessors, software and the ubiquity of mobile technology and the cloud that drive access to both computing functionality and power. So too the telecommunications sector now operates in a very different world to that which previously existed. Today, its collaboration across sectors such as the technology and automotive industries is commonplace, and telecommunications operators themselves have become an enabler of technology innovation and disruption.

STRATEGY, STRUCTURE AND INNOVATION

Closer to home – or, as some might feel, right in our backyard – we see the burgeoning financial technology industry disrupting the conventional payments space. Such disruption goes beyond the traditional payments sector, proving a catalyst for shadow banking through peer-to-peer lending and other emerging alternatives such as block chain technologies. Catalytic change – or perhaps a gamechanging competitive threat – for our industry is more likely to come from a technology firm that is free from burdensome legacy infrastructures, and agile enough to meet clients’ needs at a speed that traditional players will struggle to match. The gauntlet is laid down for traditional participants to foster an environment of greater innovation for our most creative minds, amid a perfect storm of regulatory onslaught, geopolitical uncertainty, economic volatility and rising risk complexity.

So now is the time to question the orthodoxy of our own industry – to re-imagine our future. A future where T+2 is of a bygone era – the market instead expecting T+2 seconds settlement of both cash and securities; where the traditional distinction between cash and securities no longer exists; where collateral is ‘the new settlement’ for custodians and CSDs, and identity itself becomes the new collateral; and where regulation and compliance cannot alone defeat cyber

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threats. Such possibilities demand more than simply weighing political and regulatory intent, and marrying it up to economic trends, but rather considering the unintended consequences of the raft of policy that our industry, and those related to it, are grappling with. Yes, there will be a fundamental shift in how banks, intermediaries and infrastructures compete and cooperate. But perhaps not in the way many pundits continue to speculate.

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THERE WILL BE A FUNDAMENTAL SHIFT IN HOW BANKS, INTERMEDIARIES AND INFRASTRUCTURES COMPETE AND COOPERATE

The great post trade urban myth of the past few years forewarns of great disintermediation along the custodial chain, driven by legislators’ and regulators’ efforts, and the increasing capital costs of traditional business models that result. In contrast, I believe that as the marketplace evolves the opportunities to extend our relevance to our network of partners will only increase. Our intention is to offer open, flexible services in a utility model should benefit all participants in different ways, depending on their own business models. And I see such desire to further partner from across industry, forging new models of collaboration and unprecedented cross-industry partnerships – perhaps accelerated by the rise

of new digital currencies, new asset classes and security types that are traded through new venues that are as yet undefined (much like MTFs were undefined only a few years ago), and an environment where capital and liquidity are scarce commodities.

It is no surprise that financial institutions are today re-thinking their approach to operations, where the attractions of cost mutualisation outweigh the need to build and maintain proprietary processing functions. And so it is to trusted infrastructures they will look – utilities that have a proven track-record of fostering cooperation for the benefit of the wider marketplace. Providing new relevance to a long-standing franchise creates a new dimension of interdependencies, making stronger the relationships between infrastructures and banks who chose this path.

In summary, I believe that with the tectonic plates of policy, regulation and economics shifting, market infrastructures will play an even more important role of enabling collaboration with the industry, which is particularly pressing in the low-growth European environment. Co-opetition will be the order of the day, with financial institutions, market infrastructures and technology companies focusing on what they deem core to their franchise, and partnering to connect services in ways not seen before but deemed necessary in this brave new world. Our responsibility, as vested members of the industry, is to embrace the possibility of disruption and to stay a step ahead while preserving the integrity, resilience and trust of the global financial system.

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While there is no certainty to the future, as an industry we must keep our eye on the horizon, anticipate the unimaginable, and stay open to new ways of cooperation. At the end of the day, it is this kind of partnership that will support the continued growth of the financial system, and in-turn the prosperity of the world’s economies.

Tim Howell CEO of EuroClear Tim will be presenting at NeMa 2015 on Wednesday 10th June.

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SHOW TIME

MOVING TOWARDS AN AGE OF TRANSPARENCY

For more information about transparency, read the full white paper at: http://bit.ly/transparency-showtime

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#NEMAATHENS

In 2009, in the wake of the financial crisis, the Group of 20 (G20) countries agreed to obligate firms to be more transparent around the risks they were taking, the activities they were undertaking, and the risks that their customers faced.

As a result, businesses across the financial world are providing more information than ever before to regulators and the market, impacting cost, revenues and competitive dynamics. But financial services firms may not realise the extent that transparency impacts on their business. What are the main impacts, challenges and opportunities firms will face in order to be fully compliant?

How can they adapt any unintended effects of disclosure in the new market environment?

structural impact on market organisations and change the business model of some firms.

As a result of these changes, senior management needs to identify the true impact of transparency on their business and how to react: •

•

Exit specific businesses / transactions: Where firms are limited by the excessive cost of transparency that impacts fundamental economics of the business such as OTC derivatives clearing or securities lending transactions, and consequently investors are restricting their use of instruments and dealers are withdrawing from the business.

•

Innovation in new products: The global level of investment in fintech firms tripled to US$12.21 billion year-on-year in 2014, according to consultancy Accenture.

THE EFFECT OF TRANSPARENCY Market participants and regulators have had to invest in technology and the supporting operational models that allow them to capture, process, transfer and record the necessary data.

Internally organisations have been affected across several areas, as follows: •

Budgeting: Analyst firm Aite has estimated compliance technology spend in capital markets will have increased by 35% from 2012 to 2015. To build or buy the necessary tools to support all requirements and integrate them within existing infrastructure will require each firm to make substantial investments.

•

Organisation: The finance and risk functions within firms have developed separately but they are now working together more closely in order to meet the demands of regulators.

Governance and internal organisations are having to adapt to meet the new requirements and that is creating a clearer picture of firms’ positions and risk, which in turn determines compliance.

•

Strategy: As each firm’s counterparties, clients and competitors adapt to the new levels of disclosure, it will have

Outsource to mutualise costs and increase efficiency/rationalise existing processes: Both sell and buy side firms outsource to technology providers in order to reduce cost. There are also several shared initiatives across the industry aimed at reducing cost and increasing transparency.

FUTURE SCENARIOS Transparency will have a tremendous impact across the value chain, transforming financial markets. Every firm will need a strategic plan to address the impact of these changes on the shape of the market, their business and the response needed to excel in this environment.

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WILL “ TRANSPARENCY HAVE A TREMENDOUS IMPACT ACROSS THE VALUE CHAIN, TRANSFORMING FINANCIAL MARKETS POTENTIAL RULES EXPANSION These requirements may be a precursor to future regulation. Once authorities have a measure of the current market, they may push for a greater expansion of rules than we see today and they could even require structural reforms. Beyond the compliance on transparency rules, the greatest technical challenge for all market participants will be the management of big data.

In most organisations data is held in different silos, so a universal approach to the management of data, increasing its quality and granularity, is required.

If data is to retain its value in the future after new rules are imposed, it must be captured and aggregated in a flexible manner.

This will be a major issue not only for market participants, but also for the market regulators who will have to assemble the mass of data they see into a coherent picture.

To maximise the value of regulatory change programmes and adapt to the new landscape, management should ensure that: • • •

Changes in cost and risk modelling for the business are fully understood Information on changes in market structure and external businesses are mapped out.

Any divergence or uniformity of activity between firms is noted for the risks and opportunities that it might create.

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Laurence Caron Head of Public Affaires BNP Paribas Securities Services

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BUILD, BUY OR OUTSOURCE?

TAX RECLAIMS AND CLASS ACTION RECOVERY

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One common guideline applied by many for this decision is to buy or outsource when you need to automate a business process, and to build when addressing a core process that differentiates your company.

Financial institutions which provide securities trust, custody and related services for clients often have a fiduciary duty to perform these services.

Many organisations have been forced to recognise this obligation by either their regulators or their clients, and have had to decide whether to build, buy or outsource.

TAX RECLAIMS

OUTSOURCING

The technology platforms that support tax reclaims need to have the functionality to account for and manage changes over time across many details such as investor tax status, income types, tax rates, filing regulations, reclaim forms, tax treaties, and other requirements imposed by various entities in the value chain.

For many firms an outsourcing model makes even more sense.

Outsourcing enables a firm to provide clients with a world-class tax reclaim service in the shortest amount of time, at the lowest possible start-up cost and without having to staff up and support another operations team.

Classic issues also arise, such as systems costing more to develop than to buy when all costs are factored in; maintenance, design and development expertise are often hard to find and keep.

BUY AN OFF-THE-SHELF SOLUTION This offers a myriad of benefits.

Since a provider will have been in this business for decades and providing solution to many firms, it will likely have all the needed functionality built-in. It can also be deployed quickly and at a lower cost as it doesn’t make sense to “reinvent the wheel” when it comes to the right choice for a tax reclaim solution.

SECURITIES CLASS ACTIONS RECOVERY When a securities class action settlement is announced, the terms under which a class member can claim a loss and seek recovery under a settlement agreement can vary substantially from case-tocase. As with tax reclaims, class actions are complex, qualified staff are difficult to find and retain and it is often difficult to justify dedicated staff and technology resources to securities class action activities. Like tax reclaim outsourcing, outsourcing securities class action monitoring and recoveries to an experienced provider is arguably the best way for a firm to offer a securities class action recovery service to clients at the lowest possible cost.

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MANY ORGANISATIONS HAVE BEEN FORCED TO RECOGNISE THIS OBLIGATION BY EITHER THEIR REGULATORS OR THEIR CLIENTS, AND HAVE HAD TO DECIDE WHETHER TO BUILD, BUY OR OUTSOURCE.

Bill Salva Global Business Development Manager of Goal Group

Exploring Northern European cash & custody opportunities. Together.

At SEB, we have a proven track record of working closely with our clients.

We like to build long-term relationships and will stand by you in good times and bad. As the leading Nordic corporate bank with a complete portfolio of financial services, we can help you grow and expand the scope of your business. Together, we can explore a wider world of opportunities.

To find out more, please contact: Gรถran Fors, goran.fors@seb.se sebgroup.com/corporatesandinstitutions

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THE PERFECT DAY IN

ATHENS In its 15 years’ history, 2015 is the first year that NeMa has had the pleasure to be in Athens.

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WITH SO MUCH TO ENJOY, SEE, AND EXPLORE, we asked local Athenian, Christos Garoufalis of the National Bank of Greece, to share with us his recommendation for the perfect day in Athens.

NeMa 2015, summer time, Athens…

A good opportunity to get a oneday feel of the striking contrast of the modern city to the remains of the glorious past under the deep blue Attica sky. Based on each and everyone’s available time, it’s feasible to visit the most important sites in one-day and discover hidden treasures and tastes, easily accessible by foot.

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Start-off early in the morning at the pedestrianized walkway of Dionyssiou Areopagitou, the central route for the unified network of the city’s archaeological sites, enjoying the exquisite view of the great ancient Greek architecture, which begins on Vasilissis Amalias Avenue across the Hadrian’s Arch and continues stretching to the entrance of the Acropolis, close to the ancient amphitheater of Herodeion, also known as the Odeon of Herodus Atticus. On your way up to the sacred rock, stop at a nearby café for a coffee, or freshly squeezed juice, along with a koulouri (sesame seed-coated ring of bread).

Next, take on the steps that lead to the Parthenon at the top of the Acropolis. It’s considered a true masterpiece of architecture and ancient history, influencing architecture to this day. Definitely a “must see”. Enjoy the city’s spectacular panoramas from a bird’s eye view prior to heading to Acropolis Museum, also located on Dionyssiou Areopagitou. The museum has a radiant design, showcasing important artifacts from the Acropolis. An impressive patio located at the second floor, is a great spot to catch your breath along with a coffee while you enjoy the view of the Acropolis.

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Once you leave the museum, start your walk through Old Athens.

neighborhoods of Athens, located below the Acropolis hill. The largest part of Plaka consists of neoclassical houses that date back to the 19th century distinguished for its authentic character and traditional layout.

After a 10 minute hike, you will find Apostolou Pavlou pedestrian road, where you’ll pass the Thissio district before reaching the Monastiraki neighborhood. Monastiraki is one of the most picturesque neighborhoods of Athens with narrow streets and alleys crossing each other occupied by small shops and street vendors.

Do not hesitate to get a breeze of the open air market at Pandrossou and Ifestou Streets, as well as Avissinias square with a lot of antique and souvenir shops.

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If however, you would prefer a quick, 90 minute glance of the history and culture

you can enjoy the hop-on, hopoff bus. Its terminal is situated at Constitution Square (Syntagma), in front of the Parliament building, where the Tomb of the Unknown Soldier is guarded round to clock by the Evzones, or Tsoliades. However, if you are in a more relaxed mood, you can always have a walk in the open National Garden of Athens, next to Syntagma, or head to Kolonaki square known for its cafés, luxury shops, fancy restaurants and museums such as Benakis Museum and Goulandris Museum of Cycladic Art.

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Talking about museums, we have to say that a visit

to the National Archaeological Museum and the Byzantine and Christian museum is an “all time classic” and strongly recommended to museum fans.

Visit Plaka, one of the oldest

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Christos Garoufalis National Bank of Greece

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Should you have enough time,

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After your day of sightseeing,

a 45 minute scenic drive south from Athens along the western coast of the Attica peninsula, will bring you to the breathtaking Temple of Poseidon at Cape Sounion.

you’ll likely be in the mood for an “early” dinner, since Greeks don’t usually eat dinner until after 9p.m. You can either enjoy local and international tastes in numerous places within the city, as previously mentioned, or stay at the high-end district of Kolonaki. For those wanting to soak in the nighttime view of the city and the brightly lit Acropolis combined with dinner, could take the funicular train up Mount Lycabettus.

Nonetheless, you can always experience a taste Mediterranean cuisine with a good glass of wine 10 miles south of the city center, still defined as Greater Athens. Stretching along the Saronic Gulf characterful seaside suburbs such as Glyfada, Voula, Kavouri, Vouliagmeni, Varkiza, often referred to as the “Athenian Riviera”…

Enjoy your stay in Athens!!!

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One group. One vision.

Open.

Access.

Times have changed. We expect transparency and choice.

Why should institutional financial markets be any different?

London Stock Exchange Group believes investors and organisations should be free to choose where to list, trade, clear, settle and benchmark.

That’s Open Access.

It’s a philosophy and approach to business that defines our Group and all its businesses: from LCH.Clearnet to FTSE, from Turquoise to globeSettle, and from UnaVista to ELITE. Our customers demand it. We are delivering it.

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Feel free – find out more at www.lseg.com/openaccess

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2015

A EULOGY

GIULIO DE CERBO 1948-2014 Career: Citi, 1980-2008 London Stock Exchange 2011-14

Giulio di Cerbo’s career was spent between Milan and London and over the course of his lifetime commanded enormous respect from colleagues in the industry. But what was the essence of the man?

Giulio was Italian, but not completely. He was raised from the age of four until he turned 18 entirely in England. It endowed him generously with that sense of humour the English prize above all else in a man.

But Giulio took special delight in being as Italian as he could.

Every day began with a cigarette and a caffe lungo, invariably consumed in the upright position.

He regarded milk with coffee at any time after breakfast as deeply uncivilized. Once in the office, each member of staff was greeted with Italian extravagance.

Any disagreement with a colleague - and especially with his close friend and fellow Italian

Citibanker, Achille d’Antoni - was accompanied by a theatrical degree of gesticulation.

Appearances were, if anything, even more important than body language. Giulio took enormous pride in an immaculate turn-out, never wasted an opportunity to deplore British and American indifference to attire, and made no secret of his dismay at the introduction of dress-down days.

Alcohol was never consumed without food. His principal investments were in Italian real estate, including a ruined house overlooking the sea which he bought and renovated near Alghero in Sardinia, where summers were spent.

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Every house was filled with antiques, for Giulio was evermindful of his surroundings.

In fact, he could not pass a bric-a-brac shop or a car boot sale without stopping to buy something. An art deco armchair, acquired in a New York antique shop, was lovingly disassembled in a hotel room and packed in a suitcase for the passage to Alghero.

In fact, most of the pieces found their way to Sardinia eventually.

Giulio’s eulogy in full, please visit: http://cooconnect.com/news/giuliodi-cerbo-a-eulogy By: Dominic Hobson, COO Connect

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GETTING TO KNOW YOU We touched base with some of our NeMa regulars and hit them with the hard questions about life in an attempt to get to know them a bit better.

(Turns out, more than a few of them wish they could fly!)

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David Penstone Deutsche Bank

1.Which living person do you most admire, and why?

My sister Sue - always an ear ready to listen and a foot equally ready to kick my ass.

2. Property aside, what’s the most expensive thing you’ve bought?

Divorce.

3.What is your most treasured possession?

Kids.

4. What would your super power be?

Flying 5. What is your favourite city?

Rio. 6. What is your favourite type of cuisine?

French.

7. What did you want to be when you were growing up?

Forest Ranger.

8. Which words or phrases do you most overuse?

Eh?

10. Who would you invite to your dream dinner party?

Pope Francis, Richard Dawkins, Neil deGrasse Tyson, George W Bush and Jon Stewart.

11. If you could go back in time, where would you go?

Fall of the Berlin Wall.

12. How do you relax?

Playing with the kids and building things.

13. What is the closest you’ve come to death?

Breaking two vertebrae in my neck as a result of a rather spectacular mountain bike accident.

14. What’s been your NeMa highlight of the last 15 years?

First time chairing NeMa and being woken up at 03:30 on the morning of to join a pool-side party.

Phil Brown, Clearstream Banking S.A.

1.Which living person do you most admire, and why?

Angela Merkel - a strong, principled woman in a traditionally man’s world.

2. Property aside, what’s the most expensive thing you’ve bought?

My kids’ education!

3.What is your most treasured possession?

The kids that cost me so much money!

4. What would your super power be?

Flight.

5. What is your favourite city?

London - not biased - it is the best City in the world.

6. What is your favourite type of cuisine?

Being English, Indian of course!

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7. What did you want to be when you were growing up?

An adult. Now I am one, I want to be a kid again.

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9. What is top of your bucket list?

Retirement.

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8. Which words or phrases do you most overuse?

“To be fair”, plus some choice words I’d rather not see in print.

@NEMA_FORUM 9. What is top of your bucket list?

A healthy, wealthy retirement!

12. How do you relax?

Playing my guitar.

13. What is the closest you’ve come to death?

It’s long story, but it involves a demolition site and a cherry picker!

14. What’s been your NeMa highlight of the last 15 years?

A certain attendee being pushed fully clothed into the pool at Dubrovnik. To the culprit - you know who you are. A close second was the beer being delivered by Dinghy to the Pirate Ship (again in Dubrovnik) when the NeMa crowd drunk the Clearstream event dry.

Kevin Molloy Statestreet

1.Which living person do you most admire, and why?

My parents. As the saying goes the older we get the smarter our parents get.

2. Property aside, what’s the most expensive thing you’ve bought?

Automobiles. Yet this may be considered as property - so probably paying towards the USA education system.

3.What is your most treasured possession?

Kids.

2015

the entire NeMa event. Gives one the opportunity to visit the local clothing stores only to find limited business dress options.

Fortunately, I received it the morning I was heading back to the airport for the next leg of the trip.

Worth noting I was not the only one at NeMa in this predicament.

10. Who would you invite to your dream dinner party?

Henry Kissinger for the conversation; Penelope Cruz, Bar Rafaeli, Eva Mendes, for less noble reasons.

11. If you could go back in time, where would you go?

I’d go back to when I was a kid and tell myself to enjoy being a kid more.

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4. What would your super power be?

Flying.

5. What is your favourite city?

Prague. It offers something for all interests old and new.

6. What is your favourite type of cuisine?

Japanese.

7. What did you want to be when you were growing up?

Policeman.

8. Which words or phrases do you most overuse?

Uhmm…

9. What is top of your bucket list?

Skydiving.

10. Who would you invite to your dream dinner party?

My grandparents, Elvis, Robin Williams, Ronald Reagan and my kids.

Colin Brooks HSBC

1.Which living person do you most admire, and why?

Not an individual but a group of people - I have immense admiration for the volunteers of Médecins sans Frontières who put themselves right into the front line of many of the world’s trouble spots and disasters, sometimes at great cost to themselves.

2. Property aside, what’s the most expensive thing you’ve bought?

I’m going to risk the wrath of the PC Police and answer “My wife Judith” to this and the next question.

3. What is your most treasured possession?

See above.

4. What would your super power be?

Time travel.

11. If you could go back in time, where would you go?

1950s 12. How do you relax?

Spending time with the family.

13. What is the closest you’ve come to death?

Flipping a raft on a white water rafting trip at the most challenging part of the river.

14. What’s been your NeMa highlight of the last 15 years?

Cyprus - Having no luggage for 33

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@NEMA_FORUM 5. What is your favourite city?

I’m fortunate enough to be based and living in my favourite city Hong Kong. Sydney does give HK a pretty good run for its money though.

6. What is your favourite type of cuisine?

Japanese - the attention to detail and presentation are fantastic and it even tastes good as well!

bank guards and a notorious gang who were raiding the next door bank with the help of a rocket-propelled grenade launcher and AK47s. Sadly one of our guards was killled in the raid. It did occur to me afterwards that standing watching the events from a firstfloor glass window probably wasn’t the most sensible thing to have done.

7. What did you want to be when you 14. What’s been your NeMa were growing up? highlight of the last 15 years?

A pilot.

Getting through my first NeMa keynote presentation in Slovenia 8. Which words or phrases do you in 2009 relatively unscathed. most overuse?

“Morning folks! “ - which will be a familiar refrain to those of Bettina Janoschek my staff who are in the office as Raiffeisen Bank I stride through the department International having picked up my first coffee of the day.

1.Which living person do you most 9. What is top of your bucket list? admire, and why?

Seeing an earthrise from the moon Is the inventor of the Nespresso or, failing that, travelling far north Coffee machine still alive? to see the Aurora Borealis.

2. Property aside, what’s the most 10. Who would you invite to your expensive thing you’ve bought? dream dinner party?

A jet-ski.

Henry VIII of England to see if he really did eat as much as he is 3.What is your most treasured purported to have done. possession?

A very old but beautiful coffee 11. If you could go back in time, set that my grandmother gave me where would you go? many years ago. It was heavily Middle Ages Europe - how used when I spent time with her did they live in all the filth and as a kid. Today, I hardly use it squalor? Did they really never because I’m too scared to break a wash from one month to the next? cup.

12. How do you relax?

Hiking in Hong Kong’s country parks - outside HK it’s a little known fact that over 40% of HK’s land area is country park so there’s never a shortage of trails to choose from.

4. What would your super power be?

“Beaming” as used in Star Trek would make my travelling much more efficient.

13. What is the closest you’ve come to death?

I witnessed a shoot out in Manila in the early 1990s between our

6. What is your favourite type of cuisine?

Italian - simple and delicious.

5. What is your favourite city?

Paris.

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2015

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7. What did you want to be when you were growing up?

I was definitely not dreaming about banking but rather hesitating between becoming a vet or a ski-instructor.

8. Which words or phrases do you most overuse?

(To my 2 daughters:) Could I please have my iPad back.....

NOW! 9. What is top of your bucket list?

Show the world’s most amazing places to my kids.

10. Who would you invite to your dream dinner party?

No one famous.

11. If you could go back in time, where would you go?

Vienna / end of 19th century.

12. How do you relax?

Ski weekends in the Austrian alps in winter, canoeing on one of Austria’s mountain lakes in summer.

13. What is the closest you’ve come to death?

I always feel a tiny bit closer to death when I am on board an airplane.....

14. What’s been your NeMa highlight of the last 15 years?

Dubrovnik 2007 - last NeMa precrisis.

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Andrew Duffin Societe Generale Securities Services

1.Which living person do you most admire, and why?

JK Rowling for her “rags to riches” story and for the huge amount she does for charity.

2. Property aside, what’s the most expensive thing you’ve bought?

Travel and holidays.

13. What is the closest you’ve come to death?

Nearly drowning as a child in the sea on the south coast of England.

14. What’s been your NeMa highlight of the last 15 years?

The Clearstream boat party during our first visit to Dubrovnik. Before we set sail the captain confidently assured me the boat was well stocked and he had never run out of alcohol. We proved there really is always a first time for everything.

3.What is your most treasured possession?

My children.

6. What is your favourite type of cuisine?

Any type of seafood.

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9. What is top of your bucket list?

Spending the British winters living abroad somewhere hotter.

10. Who would you invite to your dream dinner party?

Princess Diana, Keith Richards, George Best, Michael Palin and Elvis.

11. If you could go back in time, where would you go?

The court of Henry VIII of England.

12. How do you relax?

Running and football.

4. What would your super power be?

Time manipulation.

5. What is your favourite city?

I have been lucky enough to enjoy so many wonderful cities all over the world, but I always come back to London.

6. What is your favourite type of cuisine?

Thai.

7. What did you want to be when you were growing up?

Rock guitarist.

9. What is top of your bucket list?

Driving the USA coast-to-coast.

5. What is your favourite city?

San Francisco.

8. Which words or phrases do you most overuse?

“110%”

2015

8. Which words or phrases do you most overuse?

“Awesome!”

4. What would your super power be?

Invisibility.

7. What did you want to be when you were growing up?

Taller but career wise it was a (Real) Estate Agent.

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Andy Osborne Northern Trust

1.Which living person do you most admire, and why?

I admire those who achieve success – however that may be measured – but ultimately those who work hard and devote their lives to the betterment of society and others.

2. Property aside, what’s the most expensive thing you’ve bought?

Cars.

3.What is your most treasured possession?

My St Christopher - a gift from my parents for my confirmation at eight years old. I have worn it nearly every day for almost 50 years.

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10. Who would you invite to your dream dinner party?

Dara O Briain for the wit and humour; Marilyn Monroe for the glamour; Stephen Hawking for the intellectual stimulation; and John Lennon for the music.

11. If you could go back in time, where would you go?

Back to the 50’s and 60’s to experience the birth of modern music.

12. How do you relax?

Anything music related – listening or playing.

13. What is the closest you’ve come to death?

A renal infection in 1995 brought me close to conducting a due diligence on “the other side”.

14. What’s been your NeMa highlight of the last 15 years?

Being on the “Just a Minute” panel at the last session of NeMa 2008 in honour of Nick Bryan’s retirement.

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Beatriz Molina Aragonés BNY Mellon

1.Which living person do you most admire, and why?

Stephen Hawking: unbelievably clever, fighter and resilient.

2. Property aside, what’s the most expensive thing you’ve bought?

If trips are not ‘things’ then that would be probably my bed.

3.What is your most treasured possession?

Boxes filled with old letters and pictures.

4. What would your super power be?

Time travel.

5. What is your favourite city?

Tarragona!

12. How do you relax?

Watching fantasy/sci-fi movies.

13. What is the closest you’ve come to death?

My husband would say each time I drive.

14. What’s been your NeMa highlight of the last 15 years?

In general, the amazing growth of what started as a group of about 70 network managers to the much more diverse, 400+ group today, evolving from ‘is the R word still relevant in subcustodian appointment’ to Big Data.

More personally: After a panel where one of my peers had been quite vocal about areas for improvement for local providers, subcustodians came to thank me for having defended their position; it made me feel I was getting soft….

6. What is your favourite type of cuisine?

Mediterranean… specially Pata Negra ham with pa amb tomaca (bread with tomato and olive oil).

7. What did you want to be when you were growing up?

Astronaut and Archeologist.

8. Which words or phrases do you most overuse?

“Do you see what I mean?”

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9. What is top of your bucket list?

Space travel is probably too much of a dream… a trip to Antartica then.

10. Who would you invite to your dream dinner party?

My husband, my brothers and a bunch of great friends.

And… if we could add Viggo Mortensen, great!

11. If you could go back in time, where would you go?

Venice, Florence, Rome during the Renaissance.

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NeMa Quiz

@NEMA_FORUM #NEMAATHENS

9-11 JUNE

2015

1. GENEVA 2001 - NAME ONE OF THE TWO CHAIRMEN AT THE FIRST EVER NEMA IN GENEVA 2. BRUSSELS 2002 - HOW MANY ATTENDEES (TO THE NEAREST 10) ATTENDED NEMA BRUSSELS? 3. PARIS 2003 - NAME AT LEAST ONE OF THE 3 SPONSORS AT NEMA 2003 4. BUDAPEST 20015 - WHERE WAS THE EVENING FUNCTION HELD BY HSBC AND BANK AUSTRIA?’ 5. WARSAW 2015 - WHO WAS THE HEAD OF THE POLISH CSD WHO TOOK PART AS A SPEAKER IN WARSAW 2005?’

6. PRAGUE 2006 - CITI HELD AN INFORMAL GATHERING IN WENCESLAS SQUARE ON THE OPENING NIGHT OF NEMA. WHAT SPORTING ACTIVITY DID THE NEMA ORGANISERS HOST AS A WELCOME GET TOGETHER NEXT TO THE CONFERENCE HOTEL? 7. DUBROVNIK 2007 - WHO WAS THE OUT-OF-THE BOX GUEST SPEAKER? 8. CYPRUS 2008 - A LONG STANDING FACE OF HSBC ANNOUNCED THIS WAS HIS LAST NEMA - WHO? 9. SLOVENIA 2009 - WHAT WAS THE NAME OF THE CONFERENCE VENUE? 10. MALTA 2010 - WHAT WAS NOTEWORTHY ABOUT THE BAND PLAYING AT THE CLEARSTREAM / STANDARD CHARTERED’S CLOSING NIGHT PARTY? 11. DUBROVNIK 2011 - ONE OF THE ATTENDEES STOOD ON A SEA CREATURE WHICH GAVE HIM A FOOT INFECTION. WHAT DID HE STAND ON? 12. BUDAPEST 2012 - WHAT WAS THE NAME OF THE LOCAL LIQUEUR IN A MINIATURE BOTTLE GIVEN OUT BY KELER TO ALL DELEGATES? 13. WARSAW 2013 - WHAT WAS THE INSECT THAT PLAGUED DELEGATES DURING THE EVENING RECEPTIONS? 14. VIENNA 2014 - WHAT WAS THE NAME OF THE KEYNOTE SPEAKER FROM THE NATIONAL BANK OF AUSTRIA? 15. ATHENS 2015 - GUEST SPEAKER RICHARD MULLENDER TRAINS STAFF AT THE METROPOLITAN POLICE, THE UN AND THE FBI. HE IS ALSO A CONSULTANT TO THE HEAD OF SECURITY FOR WHICH ORGANISATION?

Drop off your answers to the NeMa registration desk to be entered into the champagne prize draw 39

NEMA 2014 GALLERY

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9-11 JUNE

2015

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CALENDAR

The 3rd Annual

The 6th Annual

The 3rd Annual

The 7th Annual

NEMA AMERICAS 27 – 28 OCTOBER, 2015 MIAMI

NEMA ASIA 9 - 11 NOVEMBER, 2015 SHANGHAI

NEMA AFRICA 24 – 25 NOVEMBER, 2015 LONDON

MIDDLE EAST SECURITIES FORUM MARCH, 2016 MIDDLE EAST

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#NEMAATHENS

9-11 JUNE

2015

JOIN THE CONVERSATION CONNECT WITH NEMA ONLINE TO STAY UP TO DATE WITH THE LATEST EVENT INFORMATION AND JOIN THE CONVERSATION ON ALL THINGS NETWORK MANAGEMENT

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