TORONTO, Can. -- Bitterly ironic as it may be, a top operations executive at UBS was scheduled to speak Wednesday at the international conference on banking operations known as SIBOS in Toronto. His topic: settlement risk.

It will not happen. He has withdrawn.

Securities Technology Monitor has  confirmed that Simon Haggerty, head of operations and managing director of the investment bank at UBS, will not be appearing on a panel to be held Wednesday on settlement risk at the world's foremost seminar on how to operate bank and securities firms effectively.

Haggerty was scheduled to speak on a panel that would discuss "Settlement risk revisited: Targeting total automation for trade confirmations.''

Haggerty "currently manages Securities and FX Operations'' at UBS' investment bank, according to his bio. "He is responsible for the Ops relationship with the Equities business, and also oversees Operations cross product client service."

The difficulty, of course, is that a 31-year-old UBS trader named Kweku Adoboli appears to have used his knowledge of the inner workings of the Zurich investment bank's back office operations to fake trades, first with internal parties and later with external parties.

According to a Wall Street Journal account this morning, in fact, the fraud was unavoidably going to break open this Thursday, September 22, when the settlement of trades in exchange-traded funds with external counterparts were going to come due.

That would be one day after Haggerty's panel would take place.

The settlement risk panel, set for 2 p.m. Wednesday, is to discuss:

The EU’s interest in harmonizing aspects of settlement, including a possible move to a T+2 EU settlement norm, has put shortening settlement cycles back at the top of the agenda, as an important way of eliminating risk and improving market safety. Automating the trade confirmation process, whether through a local match or a central match, and across all asset classes (even those that have traditionally fallen outside the well-established industry mechanisms for electronic trade confirmation (ETC)), is a crucial step in enabling shorter settlement cycles, as well as eliminating operational risk from post-trade processes. So where are the gaps today, for which types of business and market participant – and what can the industry do to fill them as it aims for comprehensive ETC globally?

The panel members are listed on the SIBOS site as:

  • Alistair Almeida, Head of Financial Institutions, CIBC Mellon
  • Simon Haggerty, Operations, MD, UBS
  • Ruben Lee, CEO, Oxford Finance Group
  • Fritz McCormick, Senior Product Director, Interactive Data Corporation
  • Scott Sandler, WSS COO, J.P Morgan

"Simon Haggerty is indeed withdrawn from the mentioned session,'' the conference organizer, SWIFT, said Monday morning.
UBS had not yet responded to a Monitor inquiry on the withdrawal as this was posted.

Here is the Journal account of how Abodoli's trade positions would have to come undone this Thursday, a day after the panel, when ETF trades with alleged external counterparties were to settle.

-- This article first appeared on Securities Technology Monitor.


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