Nandini Sukumar – CSDs will thrive if they stay close to their customers, says Sukumar

The raison d’être of the World Federation of Exchanges (WFE) is to expedite the flow of capital across national borders, so it is no surprise that Nandini Sukumar, chief executive of the WFE since March 2015 and a panelist in the session on how CSDs can meet the rising expectations of their stakeholders, would welcome reinforced cross-border settlement links between central securities depositories (CSDs). CSDs, she says, must evolve and innovate in order to keep up with the demands of their users and regulators. While Sukumar cautions that the priorities for CSDs must remain safety, resilience and security, she thinks that those which stay close to their customers will find more opportunities than threats in the technological changes now sweeping through the securities industry.

Hobson: What do owners and users of CSDs want from CSDs?

Sukumar: Fundamentally, both want the same thing: a resilient, transparent, secure, efficient post-trade operator that communicates effectively in times of market stress. Everyone is also seeking efficient allocation of collateral. That shared ambition is a good thing for CSDs – as, in the long term, both parties are pulling in the same direction.

Hobson: Which of users, owners and regulators would like CSDs to do more?

Sukumar:  The reality of modern market infrastructure is that the industry is constantly evolving and innovating. This means that all the participants in the eco-system – exchanges, central counterparty clearing houses (CCPs), CSDs and users, owners and regulators – are being asked for more by their respective stakeholders. There are obviously also specific regulatory mandates and thematic pieces of work that are specific to the CSD world and specific to the regulatory jurisdiction that seeks a response to them. But outside of that, most of the broader drivers – cyber-resilience, operational resilience, innovation driven by technology – are consistent across the industry.

Hobson: Where do the best new revenue opportunities for CSDs lie? Is it with institutional investors, retail investors, FinTechs, digital start-ups, welfare payments, registrar functions or somewhere else?

Sukumar: The WFE speaks from a specific perspective as our members are CCPs and exchanges. From our side there is always a need for innovative new products that support the exchange or CCP. Serving institutional investors, the bedrock of capital markets, is always a good place to generate new business. Looking at the rest of your list, I would say that, as the complexity of new regulations increases, and FinTech firms bring new products to market, the CSD that offers a solution is always going to do well. CSDs are an integral part of the trade cycle, so they are in the fortunate position of being able to generate new revenue – as long as they listen to their customers.

Hobson: Do the users and owners of CSDs want them to do more to link markets?

Sukumar: At the WFE our mission, among other things, is to enable and support the free flow of capital across regulated public markets around the world. We believe that is how market infrastructures can best fulfil their mandate to serve the real economy. The CSD obviously has a crucial part to play in this mandate. There is considerable, and increasing, regulatory interest in inter-dependencies at the moment. This is understandable. It means that, in the interests of systemic effectiveness, all types of infrastructure need to be in dialogue with each other and have aligned approaches. At the WFE, we are the voice and heart of the exchange and CCP industry. We view the CSD industry as a key partner, as together we represent the entire trading cycle.

Hobson: How have CSD stakeholder expectations changed in the last two years?

Sukumar: Exchanges and CCPs are seeking a closer relationship, and a more sustained, regular and frequent dialogue with the CSD industry. There are multiple common areas of interest: cyber-resilience, data, public education around the role of market infrastructure, FinTechs and systemic stability, to name just a few.

Hobson: What would you like the session to focus on – and what is the best measure of the success of the panel?

Hobson: What would you like the session to focus on – and what is the best measure of the success of the panel?


Expectations of CSD stakeholders. What have CSDs done to transform and meet expectations since WFC 2017? Have the expectations changed in the last two years and if yes how so?

Wednesday 10 April 2019


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