Straight Through Processing The Success Story in TSD

Straight Through Processing The Success Story in TSD 1

AGENDA n Force Driving for STP n TSD Success Story & Current State n STP Processing Flow n Future Development Paths 2

Force Driving of Change Present Drivers Centralized securities depository Future Elimination of manual intervention Outcome OTC Transaction /RTGS Pre-Settlement Matching Lack of standard Reduced Operational Costs & Risks 3 Changes Corporate Action STP

Present Clearing of government bonds has been done at the BOT whereas for corporate bonds at the TSD Since 15 May 2006, the depository of public debt securities has been migrated from the BOT to TSD Benefits Before TSD Success Story & Current State The centralization of the securities depository and the clearing and settlement system will help improve efficiency and reduce the cost of securities clearing and settlement 4

Way of Success TSD Success Story & Current State (Continued) TSD adopted STP for 1) OTC Transaction for Government Bond 2) RTGS in Bond & Equity OTC Transaction (With/Without Payment) 5 Clearing & Settlement from Trading (Gross Settlement)

STP for OTC Transaction Transfer Without Payment (Delivery Free) Automated Value Added 1 Member A (Transferor) 4 Debit Member A A/C MT 540 (RF) 4 MT 544 (RF Confirm ) MT 546 (DF Confirm ) 3 Integrated Front to Back 1 MT 542 (DF) 2 6 End-to-End Match DF & RF Member B (Transferee) 3 Credit Member B A/C

STP for OTC Transaction Transfer With Payment (Delivery Against Payment) 1 Member A (Transferor) MT 543 (DVP) Match DVP &RVP 3 7 MT 547 (DVP Confirm) Hold Bond 1 MT 541 (RVP) 2 Member B (Transferee) 6 7 MT 545 (RVP Confirm) Debit Member A A/C Credit Member B A/C MT 298/103 5 MT 298/107 4 (Payment Request) (Response Message) BOT 7

Clearing & Settlement from Trading Automated Processing from Trade Inception to Settlement (Gross Settlement) Member A Payment Request Confirm TSD Payment Request Exchange Execution Member B 8 Confirm Clearing & Settlement Confirm/Reject BOT Payment (Cash) Settlement Bank Confirm/Reject

Benefits for Improving Market Liquidity Minimize Processing Time for Members (Sellers & Buyers) to Increase Trading Turnover Enhance Efficient and Reliable Clearing & Settlement system to increase investors confidence Pave the way for possible regional central securities depository or clearing and settlement linkage in the future. 9

Future Development Paths n Pre-Matching : SWIFT Message (Q 2 2009) Value Proposition Elimination of manual activities Reduce oper ational risk Shorten Settle ment Cycle n. Corporate Action: SWIFT Message (Q 3 2009) Value Proposition 10 Elimination of manual activities Reduce operati onal cost Shorten Time

Future Development: Pre- Matching n Pre-Matching : SWIFT Message for Matching instructions between custodian and broker/ custodian and custodian Current Future Investors SWIFT Manual key- In 2 Steps TSD Match TSD Manual key- In 2 Steps 11 SWIFT Investors

Future Development: Corporate Action n Members will receive Corporate Action via SWIFT Message Current TSD SET Issuer Future SET TSD SWIFT Download Members Re-key/SWIFT Members SWIFT Stakeholders 12 Stakeholders Issuer

Thank You www. tsd. co. th 13