Asian Post-Trade Landscape: CCPs, CSDs Aiming for Global Standards

by Arin Ray, November 19, 2015
Industry Trends
Asia-Pacific

Abstract

Asian post-trade players are trying to achieve standardization in policies and practices on par with global requirements to attract and retain international participants and become more competitive. The Asian post-trade landscape is expected to continue to be fragmented along national boundaries.

In the report Asian Post-Trade Landscape: CCPs, CSDs Aiming for Global Standards, Celent discusses the key trends and developments taking place among the central counterparties (CCPs) and central securities depositories (CSDs) in Asia. The trading landscape in the Asian countries has undergone a radical transformation over the last decade, resulting in high levels of trading activity in their exchange and OTC markets. Liberalization of Asian economies is creating opportunities for trading new products and asset classes. This continuous evolution in the trading environment is necessitating major changes in post-trade functions.

Many CCPs and CSDs in Asia enjoy monopoly or quasi-monopoly status. Since the crisis of 2008, ensuring safety, stability and proper risk management of systematically important institutions such as the CCPs and CSDs has emerged as the single most important item on the agenda of regulators. Asian regulators have been prompt in following guidelines proposed by their counterparts in the Western world to attain parity with global best practices and create a level playing field for domestic and international players in their markets.

Modernization efforts are underway in the Asian post-trade industry. “Most players are undertaking major technology transformation initiatives spanning years and spending significant resources to upgrade and overhaul their systems and processes,” says Arin Ray, an analyst with Celent’s Securities & Investments practice and author of the report “These players are looking to complement in-house technology capabilities with third party solutions because they allow faster time to market, domain knowledge that is particularly helpful for launching products, and often times lower costs.”

For this analysis Celent chose five key Asian markets that account for the bulk of GDP, market capitalization, and trading volume in the Asian region: Australia, China, Hong Kong, India, and Japan.

The report begins with a discussion on the current state of development of the Asian capital markets in general and the post-trade industry in particular. We look into the organizational structures, ownership pattern, products, and service offerings of the Asian post-trade operators. Based on our analysis of local market developments, we identify the key trends. A separate chapter is devoted to discussing in detail the specific developments for the countries under focus. The report concludes with Celent’s views about the likely evolution of the Asian post-trade industry.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

The Asian Post-Trade Landscape

7

 

Market Participants in the Post-Trade Industry

7

 

Ownership Pattern of CCPs and CSDs

8

 

Products and Services Offered by CCPs and CSDs

9

Trends and Developments

11

Country Analysis

14

 

Australia

14

 

China

16

 

Hong Kong

19

 

India

23

 

Japan

28

Conclusion

31

Leveraging Celent’s Expertise

32

 

Support for Financial Institutions

32

 

Support for Vendors

32

Related Celent Research

33

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