SWIFT today announced that NZX has selected SWIFT for its clearing and settlement messaging.
The decision to adopt international standards for its messaging coincides with the intention of NZX to replace its legacy equities and debt settlement system with a new Central Counterparty Clearing House and a new Central Securities Depository.
The changes will mean NZX will offer its markets a solution that satisfies both domestic and international requirements by using standardised messaging across one of the most secure and highly resilient financial networks, SWIFNet.
The NZX joins 78 other Securities Market Infrastructures already connected to SWIFT in more than 48 countries.
Announcing details, the Head of IT Projects for NZX, Mr Martyn Bain, said “SWIFT was selected as the NZX’s primary messaging platform because of its business value, proven technical excellence and customer reach.
"SWIFT allows banks and financial institutions to efficiently communicate with each other in a highly automated manner," he said.
According to Mr Bain, the selection of SWIFT by the NZX was also due to:
- NZX is changing its settlement arrangements for equities and debt products to use central bank funds and so it needs to efficiently interface with the Reserve Bank of New Zealand;
- A subsidiary of NZX, TZ1, has been named as a global registry for voluntary carbon emissions units and wishes to provide STP services to banks and other financial institutions globally; and
- TZ1 needs to interface with commercial banks for a variety of currencies to allow DvP settlement of emissions contracts.
In each of these initiatives the intention of the NZX is to use SWIFTNet FIN messaging (or commonly known as MT), applying ISO15022 standards, but with an interest in moving to MX (XML) using ISO20022 standards as and when appropriate.
Charles Legrand, Head of South Asia for SWIFT, said “We are very pleased the NZX has recognised the value of SWIFT for cost savings, interoperability, greater STP and enhanced security and resiliency.
"Its decision, together with similar market infrastructure developments in the Asia-Pacific region, is tangible proof that SWIFT can bring significant value to securities markets. SWIFT is committed to providing that capability," he said.
He said that "New Zealand will become the first market in Asia Pacific to have all its domestic payment and securities market infrastructures (RBNZ, NZCSD, NZX) accessible via SWIFT’s international standards.”
TATA as the application provider has been selected as the vendor to develop the new middle-tier system that will link with the SWIFT network.
