Link Up Markets - DIRECT CROSS-BORDER ACCESS

Monday, 6th September 2010,

About us » Background

Improved Post-Trade Efficiency by Interoperability

The Link Up Markets initiative is a result of the changing market environment, and it aims at promoting simplified cross-border securities processing as requested by the Lisbon Agenda. The member CSDs believe that improved interoperability between them with a single point of access for customers results in significant cost reductions. Jointly they have developed a unique solution geared at reducing the complexity and the costs of cross-border transactions and the safekeeping of foreign securities.

Launched on 30 March 2009, Link Up Markets has established a common infrastructure allowing for easy implementation of links between CSD markets and introducing efficient cross-border processing capabilities. By connecting to the common infrastructure, each participating CSD has access to the services of the other participating CSD markets across all available asset classes. Link Up Markets absorbs differences in communication standards across the markets, while leveraging the existing infrastructures and processes of CSDs. As a result, the solution was provided with shortest time-to-market and minimal adaptations for the participating markets.

Benefits for the Market

Customers benefit from a single access to 50 % of the European securities market as well as approx. 90% of the African market and receive consistent best-in-class CSD settlement and custody services. This central access, based on an existing local CSD infrastructure which customers are already familiar with, translates into the potential of significantly reduced cross-border transaction costs and safekeeping fees for foreign securities.

Catalyst for Harmonization

Link Up Markets and the member CSDs are committed to contribute to standardization and harmonization in securities processing. Rather than being a prerequisite for the launch, harmonization of formats and procedures across markets is an ongoing objective.

While Link Up Markets absorbs differences in communication standards across markets, allowing its member CSDs to keep existing formats and procedures in place, tangible contributions to harmonization have been made from the beginning:

Promotion of ISO formats: the common infrastructure is fully ISO 15022 compliant and member CSDs are encouraged to implement ISO formats. Examples are the implementation of securities related ISO messages in Greece as well as MT56x messages in Spain, offered with the connection of these markets to Link Up Markets.
Harmonized CSD services: each CSD participating in Link Up Markets has agreed to offer best-in-class CSD services. Service gaps - typically in the areas of complex corporate actions, tax service or proxy voting � are closed when going live.
Standardized CSD links: scope and quality of the bilateral CSD relations are standardized to the maximum degree possible, leaving as little room for bilateral negotiations as required. As a general principle, investor CSDs should be standard customers of issuer CSDs wherever feasible.

Link Up Markets is aligned with and complements the public and private initiatives launched in light of the Lisbon Agenda. It is acknowledged as a showpiece for horizontal interoperability under the Code of Conduct for Clearing & Settlement and recognized as a facilitator and complement of Target2-Securities.