Achieving Best Practice in Capital Market Infrastructure

Institutional investors may not have a direct interest in the quality of the infrastructure for trading, clearing, settling and holding assets in the markets where they invest. But they are affected indirectly, and in ways that can have a significant impact on investment risk and performance. If a stock exchange is inefficient or illiquid or both, it reduces returns to investors. If there is no central counter-party (CCP), it increases risks for investors. If the central securities depository (CSD) cannot offer delivery of securities against payment of cash in central bank money, it increases both costs and risks for investors.  This is why the work of Thomas Murray IDS in advising local market participants, as well as regulators, stock exchanges, CSDs and CCPs, concerns institutional investors as well. In doing so, the firm is able to draw on its extensive sources of data to prepare benchmarks which help markets raise their own services to international standards in clearing, settlement and safekeeping.

Why does market infrastructure matter?

The quality of the infrastructure of stock exchanges, trading platforms, payment systems, central counterparty clearing houses (CCPs) and central securities depositories (CSDs), by which transactions in securities are traded, cleared and settled, plays a crucial role in the ability of any market to attract international investors. If risks or costs are high, investors will be deterred, liquidity will be lost, and the market will not develop as rapidly as it could. It is in the interests of both local market participants looking to attract international capital, and international investors attracted to local market investment opportunities, to ensure that the market infrastructure operates to international standards.

How can Thomas Murray IDS help markets improve their infrastructure?

Thomas Murray IDS is at the centre of vast flows of information about infrastructural developments in nearly 150 markets around the world. The firm is engaged in a constant process, by which this information is turned into knowledge about best practices in securities market infrastructure. Thomas Murray IDS has advised a number of markets on the restructuring of their entire infrastructure, from exchanges, through CCPs, to CSDs and payments systems, and across the equity, fixed income, exchange-traded and OTC derivative asset classes. The firm also runs regular workshops on specific issues, such as trade matching, to help officials and participants in a market to develop their infrastructure. Thomas Murray IDS has helped markets conduct competitor analyses, and assess and replace technology platforms for trading, clearing and settlement.

Select the links below to learn more about each service.

If you would like to find out more about this service, please contact:
Simon Thomas at sthomas@thomasmurray.com or telephone him on +44 (0) 20 8600 2300
Tim Reucroft at treucroft@ids.thomasmurray.com or telephone him on +44 (0) 20 8600 2300