Slide 1: Market Announcement
Computershare Limited ABN 71 005 485 825 Yarra Falls, 452 Johnston Street Abbotsford Victoria 3067 Australia PO Box 103 Abbotsford Victoria 3067 Australia Telephone 61 3 9415 5000 Facsimile 61 3 9473 2500 MARKET ANNOUNCEMENT www.computershare.com Date: Tuesday, 23rd March 2010 To: Australian Securit
Slide 2: Computershare Business Briefing
Computershare Business Briefing 23 March 2010
Slide 3: Business Overview Australasia
Computershare Business Briefing Mark Davis Head of Computershare Australasia Business Overview Australasia 23 March 2010
Slide 4: Regional Overview: Australasia Investor Services - Australia
Regional Overview: Australasia Investor Services - Australia State of play › Sustained role as market leader with 70% ASX 20, 60% ASX 200 › Potential consolidation amongst 2nd and 3rd market players subject to ACCC › Ongoing success with key client retention › Recent investments in new products payi
Slide 5: Regional Overview: Australasia Investor Services - New Zealand
Regional Overview: Australasia Investor Services - New Zealand State of play › Remain clear market leader with circa 80% market share › Ongoing emphasis on new products and keeping our technology at forefront of market Challenges & opportunities › Market conditions › Equity work has been stronger du
Slide 6: Regional Overview: Australasia Communication Services
Regional Overview: Australasia Communication Services State of play › Leading provider of specialised one to one communication solutions that integrate print and mail with electronic solutions › QMT integration advanced › Business mix changing – ‘send, access, receive’ Challenges & opportunities › T
Slide 7: Regional Overview: Australasia Plan Managers
Regional Overview: Australasia Plan Managers State of play › Remains clear market leader in Australia › Global footprint key to many successes with a range of large clients looking to copy Brambles, BHP global plan models › Survived last May’s Federal budget threat of changes to regulatory landscape
Slide 8: Regional Overview: Australasia Corporate Proxy Solicitation
Regional Overview: Australasia Corporate Proxy Solicitation State of play › Market leadership in Australia › Premium offering remains highly valued in the market › M&A activity has been weak over last 12 months but revenue substitution achieved in the capital raising area & EGM proxy requirements Ch
Slide 9: Regional Overview: Australasia Fund Services
Regional Overview: Australasia Fund Services State of play › Business support underpinned by key client retention › Winning new clients in unlisted structured products and managed investment schemes › Expansion of existing book of business key focus Challenges & opportunities › Superior platform to
Slide 10: Mark Davis Question Time
Computershare Business Briefing Mark Davis Head of Computershare Australasia Question Time 23 March 2010
Slide 11: Business Overview United States of America
Computershare Business Briefing Steven Rothbloom Head of Computershare USA Business Overview United States of America 23 March 2010
Slide 12: Regional Overview: USA Investor Services
Regional Overview: United States of America Investor Services State of play › Acquired transfer agent business of National City Bank › Fiscal agent for State of Israel bonds starting 2010 › Continue to win significant new business; including the largest RFP of the last few years – Frontier – plus sp
Slide 13: Regional Overview: USA Corporate Proxy Solicitation & Funds Services
Regional Overview: United States of America Corporate Proxy Solicitation & Funds Services State of play Georgeson: › Continues to rank as the #1 proxy solicitor in the US, representing 37% of the Dow 30 and 31% of S&P 500 companies › High profile transactions: › Target proxy contest against Pershing
Slide 14: USA Corporate Proxy Solicitation & Funds Services – cont.
Regional Overview: United States of America Corporate Proxy Solicitation & Funds Services – cont. Challenges & opportunities Georgeson: › Proxy access and other regulatory changes expected to have positive impact in 2011 and beyond › M&A pipeline appears to be picking up › New integrated offering, s
Slide 15: Regional Overview: USA Plan Managers & Plans Software
Regional Overview: United States of America Plan Managers & Plans Software State of play › Successful integration of equity compensation businesses › Integration of our transfer agent and employee stock purchase plan (ESPP) offerings › Self-administration software named #1 second year in a row › Com
Slide 16: Regional Overview: USA Communication Services
Regional Overview: United States of America Communication Services State of play › Upside from new KCC bankruptcy business previously outsourced › Access to large new market opportunities (PSEG/Utilities) via 3rd party strategic relations (DG3) › Continue to win new commercial business in banking an
Slide 17: Regional Overview: USA Bankruptcy & Class Action Administration (KCC)
Regional Overview: United States of America Bankruptcy & Class Action Administration (KCC) State of play › 29% overall market share in 2009 – sharing number 1 spot with Epiq › 36% of “mega” market share vs. 31% for Epiq › 2009 new clients include: CIT, Charter, GGP, Lear, Citadel › Bankruptcy servic
Slide 18: Steven Rothbloom Question Time
Computershare Business Briefing Steven Rothbloom Head of Computershare USA Question Time 23 March 2010
Slide 19: Business Overview Asia
Computershare Business Briefing James Wong Head of Asia Business Overview Asia 23 March 2010
Slide 20: Regional Overview: Asia Hong Kong
Regional Overview: Asia Hong Kong State of play › Rush of new IPOs after market conditions improved › Witnessed opening up of new jurisdictions eligible for listing in HK as HKEx attempts to secure more listings › Working with HKEx Listing Division on smoothing cross-border listings and speeding up
Slide 21: Regional Overview: Asia China
Regional Overview: Asia China State of play › Commenced relocation of Sydney-based Plan Managers HK/China team to both HK and Beijing. Have also commenced building team of local recruits › Starting up meeting service for domestic Chinese listed companies › Proxy business developing a credible track
Slide 22: Regional Overview: Asia India
Regional Overview: Asia India State of play › Market has rebounded from lows seen during financial crisis › New IPO’s emerging but both flow and application volume subdued Challenges & opportunities › New IPO and mutual fund regulations may put stress on business › CPU IT team helped to review IT in
Slide 23: Regional Overview: Asia Japan
Regional Overview: Asia Japan State of play › Effects of financial crisis still felt as issuers continue to cut back › Manifested as less demand for ID, fewer M&A, and price pressure Challenges & opportunities › Other TSE corporate governance initiatives may present some opportunities › Japan-based
Slide 24: James Wong Question Time
Computershare Business Briefing James Wong Head of Computershare Asia Question Time 23 March 2010
Slide 25: Morning Tea
Computershare Business Briefing Morning Tea 23 March 2010
Slide 26: Business Overview Canada
Computershare Business Briefing Wayne Newling Head of Computershare Canada Business Overview Canada 23 March 2010
Slide 27: Regional Overview: Canada Investor Services
Regional Overview: Canada Investor Services State of play › Client retention remains strong › Robust product development: Quick certificates, global redevelopment of Issuer Online, meeting calendar, TeleVote › Shareholder activity starting to return to normal volumes › Major focus on sales managemen
Slide 28: Regional Overview: Canada Corporate Trust
Regional Overview: Canada Corporate Trust State of play › Despite market downturn, continue to hold strong market position › Debt under administration up 26% year on year, to over $1.3 trillion; winning most new business › Default levels stable, driving revenue (debt restructuring, etc) › Focus on c
Slide 29: Regional Overview: Canada Communication Services
Regional Overview: Canada Communication Services State of play › Continued revenue and margin growth › Increasing pricing pressures in core print › Investment in IT technology to manage client demand for Canadian only data management › Ongoing systemic quality improvements to drive Certainty › All s
Slide 30: Regional Overview: Canada Plan Managers
Regional Overview: Canada Plan Managers State of play › Transactional activity has recovered to “pre-financial crisis” levels › Increase in market values has greatly increased the level of “in-the- money” options › Tenders are up for companies serviced by non-core record keepers (life insurance comp
Slide 31: Regional Overview: Canada Proxy
Regional Overview: Canada Proxy State of play › Market now has 6 players, Georgeson market share has declined › Transactional deal flow within industry is down 16% year over year › Pricing has held up compared to last fiscal year › Proxy contest volume is at an all time high level › Cost base reduce
Slide 32: Wayne Newling Question Time
Computershare Business Briefing Wayne Newling Head of Computershare Canada Question Time 23 March 2010
Slide 33: Business Overview EMEA
Computershare Business Briefing Chris Morris Business Overview EMEA 23 March 2010
Slide 34: Regional Overview: EMEA Governance Services
Regional Overview: EMEA Governance Services State of play › Difficult market as a result of GFC › GEMS is now considered the leading global product › Only global competitor is ICSA but only competitive in European market Challenges & opportunities › Deals not lost just put on hold › Increasingly cli
Slide 35: Regional Overview: EMEA IML
Regional Overview: EMEA IML State of Play › Offices now in › UK Still biggest market, but less than half the business now › Australia Performing very well › Germany Purchased Mobited and migration to IML on track › Dubai Business picking up significantly after recent problems › SA Signs of market re
Slide 36: Regional Overview: EMEA The IML Connector
Regional Overview: EMEA The IML Connector 35. Business Briefing of Computershare Limited.
Slide 37: Regional Overview: EMEA IML
Regional Overview: EMEA IML › Just launched and great coverage across the industry. › Full clear market differentiator › LOI in place for significant purchase orders › Huge potential for distributing through Audio-Visual companies globally › It could evolve the IML business model into more purchase,
Slide 38: Business Overview EMEA
Computershare Business Briefing Naz Sarkar Business Overview EMEA 23 March 2010
Slide 39: Regional Overview: EMEA Registry UK & Ireland
Regional Overview: EMEA Registry UK & Ireland State of play › No. 1 again in Capital Analytics Survey 2009/10 › High client retention rates as major clients renew without tender › Capital raisings reducing but some M&A and IPO activity › 40 IPO mandates from which 12 have come to market to date Chal
Slide 40: Regional Overview: EMEA Registry UK – The Competition
Regional Overview: EMEA Registry UK – The Competition Equiniti › Slipped to 3rd out of 3 in Capital Analytics Survey 2009/10 › Prospective clients report a significant drop in service › A number of successful switches from Equiniti including: › Schroders › WH Smith › Brit Insurance › Virgin Media ›
Slide 41: Regional Overview: EMEA Business Services
Regional Overview: EMEA Business Services State of play › New 3 year gilts contract signed and Fixed Interest issuances programmes for 2 new clients › Deposit Protection Scheme continues to outperform expectations › Emission Trading Scheme successfully launched Challenges & opportunities › Deposit P
Slide 42: Regional Overview: EMEA Corporate Proxy Solicitation
Regional Overview: EMEA Corporate Proxy Solicitation State of play › M&A market remains weak › Shareholder activism is expected to increase › Office in the Netherlands has expanded our client base › France has retained all of the clients we worked for last year, and is pushing for new clients Challe
Slide 43: Regional Overview: EMEA Russia
Regional Overview: EMEA Russia State of play › New local, senior team already in place to manage integration › Corporate activity beginning to pick up › Transactional revenues remain off but tracking to market › Mutual fund TA business – activity picking up Challenges & opportunities › Acquisition o
Slide 44: Regional Overview: EMEA Germany & VEM
Regional Overview: EMEA Germany & VEM State of play › VEM now fully integrated in CPU’s offering in the German market › VEM now working well with Global Capital Markets team and other CPU markets › Joint wins with Plans (KWS), Registry (10 new register clients through VEM) and AGM Service (dividend
Slide 45: Regional Overview: EMEA Denmark & Sweden
Regional Overview: EMEA Denmark & Sweden State of play › In Denmark, core registration and plans business performing better than forecasts › Strong combined product suite › Sweden is mainly an AGM business Challenges & opportunities › Intense competition with local CSD in both markets › New law rega
Slide 46: Regional Overview: EMEA Channel Islands
Regional Overview: EMEA Channel Islands State of play › Significant expansion in Jersey with completion of acquisition of former CPU joint venture, HBOS EES and Lloyds CTS › Integration plan well underway › Steady growth in UK companies re-domiciling offshore and requiring offshore registry services
Slide 47: Business Overview EMEA
Computershare Business Briefing Martyn Drake Business Overview EMEA 23 March 2010
Slide 48: Regional Overview: EMEA South Africa
Regional Overview: EMEA South Africa State of Play › Consistent profits through recession: upside limited by lack of corporate activity › Pan-African opportunity slow but solid Challenges and opportunities › Corporate activity picking up - particularly mining sector › BBBEE deals - dormant for the l
Slide 49: Regional Overview: EMEA Plan Managers
Regional Overview: EMEA Plan Managers State of Play › Acquisition of major competitor complete › Dealing revenues have returned much more strongly than expected › Participant numbers and value of shares under management significantly higher due to client wins › Number of new projects driving increas
Slide 50: Regional Overview: EMEA Communication Services
Regional Overview: EMEA Communication Services State of Play › Quality of output excellent › Cost base very well controlled › Fully supporting internal business lines › Good growth on external business lines driven largely by main broker client wins Challenges and opportunities › Traditional print a
Slide 51: Regional Overview: EMEA Computershare Voucher Services
Regional Overview: EMEA Computershare Voucher Services State of Play › Recently combated and overturned adverse policy change through political campaigning – political awareness is essential › Migration was very difficult, new business sector led to more challenges than expected but now mostly behin
Slide 52: HBoS EES History
HBoS EES History › Established in 1984 as a UK Share Plan Administration Business as extension of deposit-taking activity of Halifax Building Society with an original focus on Sharesave › EES acquired Mourant Equity Compensation Solutions (MECS) in 2006 for slightly less than £30m in order to develo
Slide 53: HBoS EES Key Stats
HBoS EES Key Stats › 3 Locations › Halifax 158 staff › Purley 108 staff › Jersey 53 staff › Spread across multiple locations 89 staff › 21 IT staff › 76 External IT staff 52. Business Briefing of Computershare Limited.
Slide 54: HBoS EES Clients
HBoS EES Clients › EES had a market share of about 20% of the UK Share Plan administration market › Blue chip client base which includes: › 43 of FTSE-100 › 82 of FTSE-250 › 5 of Dow Jones 30 › 19 of FTSE EURO 100 › Includes HSBC, BT, Exxon Mobil, Conoco Philips, GE, Swiss Re, Honeywell, Total 53. B
Slide 55: HBoS EES Strategic Reasons & Synergies
HBoS EES Strategic Reasons & Synergies › Strategic reasons › Significant technology rationalisation › EES and CPM are a good fit with a combined balance of clients across UK Sharesave, UK SIP and global offerings › CPM (UK) was doing exceptionally well but its growth was being constrained by the num
Slide 56: HBoS EES Implementation Plan
HBoS EES Implementation Plan › Dump all technology in EES in the bin and replace it with CPU systems › Implement the systems into the current location due to client concerns about the importance of the operational team (different to CPM) › Client profitability analysis: fix associated revenue and/or
Slide 57: EMEA Management Question Time
Computershare Business Briefing Martyn Drake, Naz Sarkar, Chris Morris EMEA Management Question Time 23 March 2010
Slide 58: Lunch
Computershare Business Briefing Lunch 23 March 2010
Slide 59: Market Structure Interactive Session
Market Structure Interactive Session Paul Conn President – Global Capital Markets 23 March 2010
Slide 60: Introduction - Stuart Crosby
Introduction - Stuart Crosby › Most investor day presentations focus on current year activities in our national and regional businesses › This session provides some insight into the structural aspects of the markets we operate in “Market Structure” › International experience, local adoption › Medium
Slide 61: Introduction - Stuart Crosby (cont’d)
Introduction - Stuart Crosby (cont’d) › The core objective for Global Capital Markets (GCM) in a market structure sense is: › “Defend our business against unwanted change and seek to influence positive change” › If we can get this right, we can have a significant financial impact on our business and
Slide 62: Objectives for today’s session
Objectives for today’s session › Explain what we mean by ‘market structure’ › Provide a “round the world” view of some of the most significant current and proposed major events and what CPU is doing in this area › Answer your questions › Leave you better informed about developments in key CPU market
Slide 63: Agenda
Agenda › Introduction, Stuart Crosby › General Introduction › Overview of different models › Key developments › US › Europe › China › Hong Kong › Russia › Summary, Open Forum & Close 5
Slide 64: GCM’s mandate
GCM’s mandate GCM draws on a wealth of experience and insight into international markets to drive and provide support in three key areas in CPU’s business: 1. GCM’s innovative range of Solutions have been created to help issuers, advisors and capital market participants access international markets
Slide 65: Part 1: General Introduction
Market Structure Interactive Session Part 1: General Introduction 7
Slide 66: Definition of market structure
Definition of market structure › M acro definition: the organization, structure and operation of a [securities] market, including the roles, inter-relationships and commercial, operational and technical interactions between the major infrastructure operators, various commercial service providers and
Slide 67: Market structure definition in CPU context
Market structure definition in CPU context Relative to CPU’s core registry/TA services, ‘market structure’ means the structure and organization of, or proposed changes to: › The nature/form of the exchange trading and connected settlement systems, supporting local, national & international markets ›
Slide 68: Major drivers of market structure change
Major drivers of market structure change › Market Evolution › e.g. globalization › Government / Regulatory policy › Competition › Different providers in the transaction chain (convergence) › Competing markets › Technology & innovation › Process improvements (straight-through-processing) › Cost of se
Slide 69: Part 2: Overview of different market models
Market Structure Interactive Session Part 2: Overview of different market models 11
Slide 70: Original G30 recommendations (1989)
Original G30 recommendations (1989) The nine recommendations of the Group of Thirty were designed to reduce the risk and lower the cost of trading securities internationally: 1. Comparisons should be established between direct market participants (brokers, exchange members ) by day T+1 2. Indirect m
Slide 71: Highlights of G30 2003 recommendations
Highlights of G30 2003 recommendations › Eliminate paper and automate communication, data capture and enrichment › Harmonise messaging standards and communication protocols › Develop and implement reference data standards › Synchronise timing between different clearing and settlement systems and ass
Slide 72: Four general market models
Four general market models The following slides set out details of four generalised market models to show the range of approaches that have been adopted to paperless globally: › Australia and United Kingdom › USA and Hong Kong › Continental Europe › Singapore and China 14
Slide 73: Key market structure concepts
Key market structure concepts › Immobilisation vs. Dematerialisation › Standard opaque or semi opaque depositories vs. transparent ‘name on register’ system › Different recordkeeping and processing models reflecting historic evolution of the local market › Participant and stakeholder access to centr
Slide 74: Different models, different experiences: Australia/UK Model
Different models, different experiences Australia/ UK Model Where lines pass through boxes, information is available across that level (i.e., from the level below to the level above). If the line stops at the edge of boxes, information is not available across that level. 16
Slide 75: Different models, different experiences: US Model
Different models, different experiences US Model Where lines pass through boxes, information is available across that level (i.e., from the level below to the level above). If the line stops at the edge of boxes, information is not available across that level. 17
Slide 76: Different models, different experiences: Continental Europe
Different models, different experiences Continental Europe Where lines pass through boxes, information is available across that level (i.e., from the level below to the level above). If the line stops at the edge of boxes, information is not available across that level. 18
Slide 77: Different models, different experiences: Singapore Model
Different models, different experiences Singapore Model Where lines pass through boxes, information is available across that level (i.e., from the level below to the level above). If the line stops at the edge of boxes, information is not available across that level. 19
Slide 78: Different models, different experiences: China Model
Different models, different experiences China Model Issuer Clearing House & Central Registrar Participant Participant Participant Participant Where lines pass through boxes, information is available across that level (i.e., from the level below to the level above). If the line stops at the edge of b
Slide 79: Overview of GCM market structure activities
Overview of GCM market structure activities Period 2010/13 likely to be a period of significant change › Many different forces driving change, some have been accelerated by GFC › Significant upside if we can positively influence outcomes (e.g. US) CPU to stay active & influence market structure deve
Slide 80: Market structure dynamics – current examples
Market structure dynamics – current examples The following markets are each undergoing structural change or facing pressure to introduce significant change: Hong Kong › Market evolution/development of electronic clearing house ‘register’ China › Development of the International Board Russia › Market
Slide 81: Market Analysis USA
Market Structure Interactive Session Market Analysis USA 2
Slide 82: Core elements of Proxy Reform – actual & proposed
Core elements of Proxy Reform – actual & proposed › Strand 1: Rule 452 Changes – abolition of broker discretionary voting in director elections › Implemented Jan 1, 2010 › Strand 2: Investor Access to the management proxy › Timing 2H 2010, or 2011 › Highly likely to be implemented by the SEC › Issue
Slide 83: Shareholder Communications Coalition’s (SCC) recommendations
[ Shareholder Communications Coalition’s (SCC) recommendations Below are the issues addressed by the recommendations the SCC sent to the SEC on 8/4/09: 1. Investor education 2. NOBO and OBO classification 3. Competition among proxy service providers 4. Beneficial owner list compilation 5. Proxy vote
Slide 84: Comparison of today’s system vs. the proposed system
Comparison of today’s system vs. the proposed system Current system Note: Arrow numbers indicate chronological process order 26
Slide 85: Comparison of today’s system vs. the proposed system
Comparison of today’s system vs. the proposed system Proposed system Note: Arrow numbers indicate chronological process order 27
Slide 86: What key changes would be needed from regulators, etc.
What key changes would be needed from regulators, etc. › NYSE: › Key changes: › Would no longer be expected to set reimbursement fees › Revise NYSE rule language to align with revised SEC Rule and removing Rule 465 (reimbursements) › Next steps: › Oversee implementation project plan › SEC: › Next st
Slide 87: Overall summary
Overall summary › Shortcomings of the existing system: › Issuers do not have direct access to a large portion of their shareholder base › The current single-service-provider model lacks transparency and accountability › The distribution process is disjointed and not cost effective › Lack of ability
Slide 88: Market Analysis EMEA
Market Structure Interactive Session Market Analysis EMEA 3
Slide 89: Key themes
Key themes Changes in European clearing and settlement › TARGET2–Securities › Euroclear Single Platform › Harmonisation of Corporate Actions › Harmonisation of General Meetings › LCG – Harmonisation of Laws re. Securities Holdings › UK market dematerialisation 31
Slide 90: The key players in European reform
The key players in European reform UK Europe › Euroclear › European Central Bank › Bank of England › Central Banks of France, Germany, Italy and Spain › LSE › Bank of England › UK firms, global banks & securities firms › Major EU firms, global banks, securities firms › Issuers › Various Stock Exchan
Slide 91: Definition of T2S
Definition of T2S › T2S stand for ‘TARGET2-Securities’, a major EU-wide infrastructure project sponsored by the European Central Bank › T2S is described as ‘a core, borderless and neutral securities settlement platform’, a platform for the cross-border and domestic settlement of securities against C
Slide 92: Background to T2S
Background to T2S › To reduce the high cost of settlement of transactions, especially cross-border transactions, within the EU market › To deliver cost effective infrastructure to support a single integrated EU-market › Builds on other key reform initiatives, e.g. Giovannini Group recommendations ›
Slide 93: T2S - Industry dynamics: Existing post trade infrastructure
T2S - Industry dynamics Existing post trade infrastructure 35
Slide 94: T2S - Industry dynamics: Proposed post trade infrastructure
T2S - Industry dynamics Proposed post trade infrastructure 36
Slide 95: Background to T2S – cont.
Background to T2S – cont. › The T2S project was formally approved by ECB (July 2008) › Implementation is scheduled for 2013* › Claimed benefits include reduced costs for market participants, translating into deeper more liquid markets and lower capital costs for issuers › However, some important pol
Slide 96: Scope of T2S project
Scope of T2S project › T2S is designed to embrace all Euro markets and, on an “opt-in” basis, any other key markets in the EU-region that would benefit from inclusion (e.g. UK Sterling, Swiss Francs, etc) › T2S currently designed to be a central ‘outsourced’ settlement platform for each member CSD,
Slide 97: Scope of T2S project
Scope of T2S project › T2S is not proposing to interface with issuers or their agents › Direct Access for registrars remains an open policy question. Access to T2S will be intermediated via the local CSD › Note 1: Major market participants will be afforded direct access to T2S › Note 2: CSDs may los
Slide 98: Impact for PLC Issuers
Impact for PLC Issuers › Difficult to gauge at this point, given key policy issue of Sterling participation remains an open question › (BoE decision due by end 2008, then mid 2009, then 2010?) › If sterling is included, we will seek to influence design: › Upside: potential increase in transparency a
Slide 99: Sterling participation
Sterling participation › Bank of England letter to ECB “The overall summary of our assessment is that while there may be a case for a more integrated approach to securities settlement across Europe (going beyond euro-denominated securities), a number of very important issues require further careful
Slide 100: What is Euroclear’s single platform (SP) project
What is Euroclear’s single platform (SP) project › Euroclear is implementing its own European consolidation programme › Rationalisation of infrastructure and introduction of standard processes › SP covers UK and Ireland (CREST), France, Netherlands, Belgium and Scandinavia › Narrower scope than T2S.
Slide 101: Euroclear single platform
Euroclear single platform › Platform dynamics, including development impact, cost, functionality and slippage, creating general uncertainty › Project subject to significant delays and uncertainty re T2S. Timing of SP custody module now unclear › UK Issuers frustrated with additional costs caused by
Slide 102: EU harmonisation
EU harmonisation › Significant pressure to harmonise processes across European markets › Driven by major banks and regulators › Critical pre-condition to major infrastructure rationalisation › Key focus › General Shareholder Meetings › Corporate Actions 44
Slide 103: UK dematerialisation
UK dematerialisation › Proposal with Her Majesty’s Treasury (HMT) for consideration › HMT policy not yet clear › Industry consultation document and business case expected in near future › Subject to HMT policy, expected to be mandated by 2012, if “legislation” is modified › All certificates to be re
Slide 104: Legal Certainty Group
Legal Certainty Group EU harmonisation of Law on securities holding and dispositions LCG made broad recommendations, August 2008, to introduce EU legislation to: › Harmonise minimum set of rights for book-entry holders* › Require information relating to corporate actions and other information affect
Slide 105: Legal Certainty Group
Legal Certainty Group EU harmonisation of Law on securities holding and dispositions › Computershare submitted a response to consultation › Recommendations currently too broad and general to permit adequate analysis of impact on Issuers & Agents › Translation of policy into executable outcomes uncle
Slide 106: Legal Certainty Group
Legal Certainty Group EU harmonisation of Law on securities holding and dispositions › Other observations: › Certain aspects similar to recent changes to UK Companies Act to provide shareholder rights to nominee holders › T2S could provide the platform for shareholder identification and communicatio
Slide 107: Key issues for European market infrastructure
Key issues for European market infrastructure › Uncertainty regarding critical market structure model(s) › Cost/benefit for issuers › UK Market vs broader European single market › Preservation of UK specific attributes? › Current mood in EU is that pan-European Trading/Settlement reform should super
Slide 108: Specifically….. in the context of EU reform, including T2S
Specifically….. in the context of EU reform, including T2S › Will the UK market (and BoE) commit to T2S? › Are these broader EU initiatives good for the UK PLCs? › Cost benefit? › Ongoing transparency of shareholder ownership records › Interaction with Euroclear single platform vs. direct T2S connec
Slide 109: Market Analysis Russia
Market Structure Interactive Session Market Analysis Russia 5
Slide 110: Russia existing structure
Russia existing structure Custodian Where lines pass through boxes, information is available across that level (i.e., from the level below to the level above). If the line stops at the edge of boxes, information is not available across that level. 52
Slide 111: Computershare's view of market structure development in Russia
Computershare's view of market structure development in Russia Our view is the Russian market should develop a central clearing house (a “flexible CSD") using the following guiding business principles: i. A legal and regulatory framework to support electronic clearing, settlement and registration of
Slide 112: Computershare's view of market structure development in Russia - cont.
Computershare's view of market structure development in Russia - cont. v. Delivery-versus-Payment settlement of all market transactions and related transactions, e.g. Securities Lending and Borrowing transactions vi. Highly efficient electronic interfaces between registrars and the central clearing
Slide 113: Computershare's view of market structure development in Russia - cont.
Computershare's view of market structure development in Russia - cont. x. Corporate actions (e.g. dividends, capital restructures, takeovers and share voting) and all other shareholder communications including those in respect of holding balances maintained directly on the clearing house system to b
Slide 114: Different options for the Russian market
Different options for the Russian market Following preliminary discussions with major stakeholders, it is clear there are deployment issues that require consideration to be given to 4 different variations of the central clearing house model Model 1: Central Clearing House. Under this structure one o
Slide 115: Possible models for Russia
Possible models for Russia 57
Slide 116: Market Analysis Hong Kong
Market Structure Interactive Session Market Analysis Hong Kong 5
Slide 117: Proposed scripless model in HK
Proposed scripless model in HK › Securities and Futures Commission (SFC), Hong Kong Exchanges and Clearing Limited (HKEx) and the Federation of Share Registrars Limited (FSR) formed a Working Group › Different market models revived, including AU & UK › Proposal will peel back the depository nominee
Slide 118: Existing market structure in HK
Existing market structure in HK Complete Register of Holders HKSCC Nominees Limited CCASS Investor Participant Participant Accounts* Accounts (CPA)* (IPA) Other certificated CCASS holders Participant Stock Segregated Accounts (SSA) * Securities in a CPA may belong to the CCASS Participant and/or its
Slide 119: Proposed scripless operational model in HK
Proposed scripless operational model in HK Complete Register of Holders Uncertificated sub-register Certificated sub-register CCASS sponsored or CCASS Participant Issuer sponsored sponsored CCASS Investor Registrar Participant Participant Participant Certificated Accounts Accounts Accounts holders (
Slide 120: Proposed scripless operational model in HK - cont.
Proposed scripless operational model in HK - cont. › Admission of share registrar as CCASS participant enabling CCASS access › Introduction of the concept of Issuer-Sponsored Account › Creates opportunity for share registrar to provide value-added services to registered shareholders › The roles and
Slide 121: Market Analysis Mainland China
Market Structure Interactive Session Market Analysis Mainland China 6
Slide 122: Proposed International Board
Proposed International Board › Draft regulatory framework to be rolled out in 2010 › “A shares” will be listed on the International Board, under new listing rules, as currently contemplated › “A shares” are not fungible with the foreign issuer’s securities held and traded in the international market
Slide 123: Proposed International Board – cont.
Proposed International Board – cont. › No cross border trading or arbitrage between the markets due to RMB currency restrictions. As such “A shares” trade only within Mainland China › In all other respects, “A shares” are the same legal class of securities of the foreign issuer › All “A share” accou
Slide 124: Target markets and companies
Target markets and companies According to media reports at least 10 companies are interested in listing on the SSE International Board. Of these, 8 are Computershare clients. UK and US "market connectivity" is the current priority for China 66 Confidential
Slide 125: Potential SD&C/CPU connectivity to UK/US
Potential SD&C/CPU connectivity to UK/US if/when fungibility applies 67
Slide 126: Summary & Open Forum
Market Structure Interactive Session Summary & Open Forum 6
Slide 127: Summary
Summary › 2010-13+ likely to be a period of significant change › CPU to stay active in market structure developments › The goal is to improve CPU’s and our clients’ positioning › This period likely to create new commercial opportunities to CPU 69
Slide 128: GCM view: potential timeline of key developments
GCM view: potential timeline of key developments Progressive changes to proxy model › Access › Market Mechanics European Law effective › Harmonisation law › Market Russian central infrastructure settlement law for Russia “CREST” Russian market infrastructure upgrade Hong Kong dematerialisation and i
Slide 129: Question Time
Market Structure Interactive Session Question Time
Slide 130: Paul Conn Close
Market Structures Interactive Session Paul Conn President – Global Capital Markets Close 23 March 2010 7