Securities Market Practice Group (SMPG)

SMPG was created in July 1998 and since its inception has established a local presence in more than 30 countries through National Market Practice Groups (NMPG). These groups are comprised of broker/dealers, investment managers, custodian banks, central securities depositories and regulators. SMPG creates globally agreed harmonised market practices which, integrated with ISO standards, have brought the securities industry closer to achieving Straight Through Processing (STP).
The SMPG is focused on enhancing the current securities industry practices. There is active dialogue between the SMPG and other industry groups/organizations including OMGEO, ECSDA, ACSDA, ISITC, ISSA.
To date SMPG has produced a significant number of market practice recommendations within Trade Initiation/Confirmation, Settlement, Reconciliation and Corporate Actions. Additionally, SMPG has since expanded to define market practices for the Investment Funds industry. 
The work of the Securities Market Practice Group focuses on three themes:

•          Settlement and Reconciliation;
•             Corporate Action;
•             Investment Funds

Market practices and other materials developed by SMPG are published on the website of the organisation: www.smpg.info.
 
 
SMPG has established a local presence through National Market Practice Group (NMPG). SMPG has a presence in 38 countries including Poland. Currently two NMPGs are in operation in Poland:

1.     S&R NMPG PL
2.     CA NMPG PL  

 
S&R NMPG PL -  National Practice Group Settlement and Reconciliation

The goal of the Group is to develop local standards of market practices for clearing and settlement. S&R NMPG PL has developed and published in November 2005 procedures for the exchange of information in clearing of classical buy/sell transactions as well as relevant ISO 15022clearing messages for the Polish market. The procedure applies on the Polish market in relations between KDPW Participants and their clients since July 2006. In 2010, S&R NMPG PL published a Hold-Release market practice. In 2011, S&R NMPG PL prepared Recommendations for the application of client identifiers in matching settlement instructions.
 
CA NMPG PL

CA NMPG PL develops local market standards of corporate actions processing. At the turn of 2007 and 2008, CA NMPG PL approved market practices for dividend and interest payment and redemption of securities on maturity. The practices involve the exchange of ISO 15022 messages between KDPW Participants and their clients. The document “POLAND - CORPORATE ACTIONS - ISO 15022 - Communication between local custodians and their clients” was published on the SMPG website in March 2008.
In 2011, KDPW representatives participating in the work of NMPG CA PL were involved in the development of an ISO 15022 market practice for the exercise of subscription rights on the Polish market. 
 
SMPG CA – Securities Market Practice Group Corporate Action 
 
SMPG CA was established to prepare harmonised market practices under ISO 15022 applicable to corporate actions processing. SMPG CA has defined the rules of application of tax rates by selected countries. In 2011, SMPG CA published four documents concerning different aspects of global market practices:

·         SMPG Corporate Actions Global Market Practice  - Part 1
·         SMG CA Global Market Practice – Part 2 for Standards Release
·         SMPG CA Global Market Practice Part 3
·         SMPG Corporate Actions Event Templates

In 2011, SMPG CA published a new version of “SMPG Corporate Action Global Market Practice Part 1” which describes the global market practice of ISO 15022 corporate actions processing including the exchange of CA information.
 
SMPG S&R – Securities Market Practice Group Settlement and Reconciliation
 
The main goal of SMPG S&R is to develop market practices for business processes involving the exchange of securities settlement messages between financial institutions. SMPG S&R has prepared more than 20 practices covering among others the main elements of settlement instructions, statements, repo transactions, securities lending, etc.

In 2011, SMPG S&R focused on harmonising the practices with ISO 20022 and discussing modifications proposed by the Group’s members including requests of T2S system developers.