Bourse Consult at Work

How Bourse Consult can help

Bourse Consult LLP is a group of senior financial market professionals, with chief executive or other senior executive experience at exchanges, infrastructure platforms and regulators. We are a small, high-level team who can work individually or in whatever combination meets the client’s needs. Clients value our impartial advice, sitting on their side of the table, knowing that we do not have any ambitions to sell other products or services.

How can we help established financial/commodity markets?

You operate a financial market place and need to launch new products or increase efficiency. Competition is heating up from new alternative market places and expanding established markets.

To be a winner you need to change and adapt. The future leaders are the players that not only have competitive products, but also are the fittest in all disciplines of operating a financial market place.

At Bourse Consult we have experience from all aspects of running an efficient market: the ‘front-end’ of the business (product innovation, promotion, marketing and sales), the internal operation (organisation, management processes, operational efficiency, IT services, customer service and risk management), rules and regulation (regulatory requirements, governance, listing, trading, surveillance and enforcement) and the ‘back-end’ of the business (clearing and settlement).

At Bourse Consult we help our clients to achieve industry best practice in all areas of operating a financial market place.

How can we help financial/commodity market place startups?

You have plans to launch a new financial market. Competition is tough and many other people are operating in the same space.

You have so many questions to answer, if you are to succeed. What market structure do you need? What trading platform should you use? What are the requirements for post-trade services – clearing and settlement? Do you need to provide market surveillance? What official authorization do you need and how do you get it?

Bourse Consult has helped in these situations. We have experience gained from going through this process before. We can advise you from our unique vantage point on the strategy of the various players involved in trading, clearing, settlement and regulation and guide you through the practicalities of implementing solutions.

Case study: Developing a new commodities exchange

The promoters of a new commodities exchange to be launched in Asia approached Bourse Consult for advice. Three Bourse Consult consultants advised them on all aspects of developing and launching the new exchange, including their strategy towards partners, their approach to the regulators and the clearing arrangements for the new exchange and participated in some of the key negotiations.

Case study: Organisation and operational efficiency of a new exchange

A Bourse Consult consultant advised a startup exchange in the United States concerning operational procedures and efficiency. He recommended an organisational structure, staffing levels, roles, responsibilities and management processes. He acted as a coach to the management team during the implementation period.

Case study: Gaining regulatory approval for a new trading platform

A number of new trading platforms during the last two years launched in Europe commissioned a Bourse Consult consultant to advise them on all aspects on obtaining regulatory approval and the design and implementation of appropriate compliance functions. The tasks included:

• advising on board and committee structures;
• designing the rule book structure;
• determining, drafting and implementing appropriate compliance systems and procedures;
• and ensuring the scope of market surveillance and monitoring complied with regulatory requirements.

Bourse Consult coordinated with regulators and professional advisers to help ensure swift and cost-effective solutions to regulatory hurdles as they arose. Bourse Consult also mentored and trained new regulatory and compliance staff enabling a seamless transition though all stages from the beginning through to launch.

Case study: Master activity plan for a startup exchange

A consultant from Bourse Consult was engaged to develop a complete activity plan to establish the operational organization for a new exchange in Asia. The plan covered listing, trading, market data, surveillance, post trade services, marketing & sales, training & support, IT services, business management, business support, and governance. Each activity was ranked according to effort of implementation and effect on business. All activities were prioritized and assigned to a responsible person.

How can we help in clearing and settlement?

You operate a financial market and you know that effective post-trade services to reduce risk and improve efficiency are an essential competitive tool. Are yours good enough?

Bourse Consult can help. We are close to developments in the major markets. We have deep, practical experience of clearing and settlement and can advise both on high-level strategic issues and on practical implementation issues.

Case study: CPSS-IOSCO compliance (1)

Basel III, the global regulatory standard on banking regulations including capital adequacy, imposes prohibitive capital penalties on banks which deal with clearing houses that aren’t CPSS-IOSCO compliant. As part of its preparation for Basel III (which comes into force from 2013), the JSE asked Bourse Consult to undertake an audit of JSE’s clearing house, Safcom, to determine its alignment with these CPSS-IOSCO principles.  As a result of this work, several detailed recommendations were made to the JSE on how Safcom could become fully compliant.

JSE undertook the necessary work to achieve compliance throughout the latter part of 2012. Following these changes its regulator (the Financial Services Board, FSB) undertook a comprehensive review which resulted in Safcom now being certified as a “Qualifying Central Counterparty” (CCP). This achievement is very important to derivative traders because failure to comply means banks would have had to hold up to ten times more capital as surety, resulting in the derivatives market becoming increasingly expensive to trade in.

Safcom is the first Clearing House in the world to obtain this status.

Case study: CPSS-IOSCO compliance (2)

As part of its internal review of its operations, the Nigerian CSD (CSCS) asked Bourse Consult to undertake an audit of its operations. The client agreed that the CPSS-ISOCO principles should be the basis of this exercise and and a report was produced to show how these principles were being met and, if not fully met, what actions needed to be undertaken to become fully compliant

Case study: Designing a new clearing house

A new financial centre currently under development identified an opportunity to launch a clearing house focused on OTC derivative trades in its region. It engaged a Bourse Consult consultant to advise on the structure and services of the clearing house. The consultant worked closely with the management of the financial centre, helping them analyse the advice received from leading management consultancies and joining them in discussions with market participants.

Case study: Implementing a new clearing house

The Bond Exchange of South Africa (now part of JSE) wanted to implement a new market for Interest Rate Derivatives with central counterparty clearing within an aggressive time table. It engaged Bourse Consult to provide a Program Director to manage all aspects of this complex project through to completion.

Case study: Improving security in Environmental Markets

Registries and CSDs are key to providing proof of ownership and secure transfer of ownership. However, the Voluntary Carbon Emissions and other global Environmental Markets have mostly been developing independently of these mainstream market infrastructures. Bourse Consult is using its experience of Financial Market Infrastructures to bring similar rigour to Environmental Registry design and operations.

How can we help the public sector?

You are a government official with responsibility for new measures designed to open your domestic or regional market to greater competition. You need to know how the potential users of the market will respond. You need to assess their views from a qualitative as well as a quantitative measure. But the biggest users sometimes shout loudest. How do you judge the validity of the concerns they express?

Bourse Consult has extensive experience of assessing the validity of views expressed by market practitioners. It is capable of assessing which views are based on sound objective criteria and which are based on a desire to maintain market share.

Case study: Analysing market developments

The City of London has a highly regarded programme of publishing research papers on developments affecting London’s financial markets. It has commissioned Bourse Consult to prepare several papers for this programme, including an assessment of the exchange consolidation process (for a confidential study), an assessment of the state of clearing and settlement in Europe, an assessment of the financial infrastructure supporting London’s markets and, most recently, an assessment of issues relating to the role of OTC Derivatives in the recent financial crisis. All these papers have helped to shape policy in their respective areas.

The research was based on interviews with market participants, using the seniority of the Bourse Consult consultants to obtain access to high-level executives in market firms. While protecting the anonymity of the interviewees, the consultants combined the results of these interviews with their own knowledge and experience to prepare the final reports, which were published by the City of London.

How can we help with Information Technology?

Today’s financial market places and clearing and settlement organisations have in effect become advanced IT shops and the investments in information technology are massive. Selecting the right solution for your needs and then operating it effectively is crucial for your competitiveness and success.

Bourse Consult knows how to effectively manage IT services and has experience with many of the available vendors as well as managing selection and implementation projects.

Case study: Efficient IT Service Management

A Bourse Consult consultant outlined management procedures for an exchange to ensure that the IT service was focused on supporting the business, achieving both high service quality and financial efficiency in every stage of the service life cycle (Service Strategy, Service Design, Service Implementation, Service Management, Security Management and Continual Service Improvement).

How can we help facilitate strategic policy formulation?

You are a company or organisation needing to to develop a strategy designed to take your business forward. As CEO you need to be able to participate fully in the debate yourself, and not be constrained by chairing the meetings and thereby having to maintain a neutral approach. You need information about how you are perceived, but your counterparts may not be open and frank if you ask them direct.

Bourse Consult can help. We have considerable experience of participating in and handling such events. Either together or individually, as each of us has been a CEO, we can work with CEOs to arrange such events and facilitate the meetings themselves. We have the experience to be able to talk your counterparts and elicit their views in confidence in order to present you with a well-researched assessment.

Case study: Evaluating counterparty relationships

A European central bank wanted an appraisal of its relationships with market counterparties. It commissioned a Bourse Consult consultant to prepare an assessment. The consultant conducted confidential interviews with senior executives in market firms, who were able to speak frankly on the basis that their comments would be reported anonymously. The central bank made a number of improvements to the way it managed its relationships with market counterparties, based on the consultant’s recommendations.

How can we help with Interim and Change Management?

A key manager has left the organisation and it will take some time to find a good replacement. Or perhaps you need to drive through a difficult change and want an ‘outsider’ to manage it. Maybe one of your managers can improve with the support of a coach that really understand what it takes to be a leader in the financial industry.

Bourse Consults consultants have extensive senior executive experience from the financial industry in a time of intense transformation. Among our consultants, we have managed organisations of hundreds of employees going through all kinds of challenging periods. We can use this experience to help you rise to your challenges.