2012 Top International Operations Executives
2012 TOP INTERNATIONAL OPERATIONS EXECUTIVES:
The More Things Change, The More They Stand Out | DIANA CHAN: Shaking Things Up, In European Clearing | CHRIS REMONDI: Increasing Information, Reducing Risk | NEERAJ SAHAI: Marrying Large-Scale Technology With Boutique Service | KEVIN MILNE: Making an Exchange Succeed By Working With Rivals | THOMAS ZEEB: Gold Standard in Securities Processing | CHRISTOPHER JAYNES: Cutting Out the Custodian Bank | PATRICK COLLE: Going Global, But Not Everywhere | TONY FREEMAN: Targeting Two-Day Settlement
THOMAS ZEEB: Gold Standard in Securities Processing
December 19, 2011
In September, SIX Securities Services said it will treat gold as a currency.
Gold would be accepted as payment against the delivery of securities. One troy ounce would act as one unit. The value of the unit gets set in U.S. dollars, one gram valued against one dollar.
That’s innovation, in post-trade processing.
But this “wasn’t a particularly difficult change” to make, said Thomas Zeeb, the chief executive of SIX Securities Services.
That’s because SIX is not your ordinary provider of custodial services. It has a vault in the middle of Switzerland, with three-foot-thick walls and a four-foot-thick ceiling. It’s been called the Fort Knox of Switzerland.
And it stores gold, for banks.
“Gold is interesting,’’ said Zeeb, “because we have had numerous banks come to us over the last two or three years, saying, we’d like to outsource our vault to you.
“You do all our processing for other securities, can you take on our precious metals,’’ he said. “They cost too much” to store and handle, for an individual bank.
So SIX has been taking in a lot of precious metals into its vault, for companies that it already processes trades in stocks, bonds and other securities. Now, it is turning gold into a settlement currency, known as an XAU. The X means there is no country. AU is symbol for gold in the table of elements.
Within a month, Scoach, an exchange joint venture between SIX Group and Deutsche Börse, began offering trading in structured products such as “multi-barrier reverse convertibles” denominated in gold. SIX Securities Services is responsible for the processing. And to use gold as the currency, traders must open an account with SIX Securities Services.
“Creativity” and “securities processing” don’t normally fit into the same sentence. But it’s applying new ideas to back offices that has gotten the Canadian-born Zeeb notice over the course of his fairly far-flung career.
He got his master’s degree in business administration from the Katholieke Universiteit in Leuven, Belgium. This is a town better known as the home of Stella Artois beer, but also home to the Center for Operational Research, which is helping the Society for Worldwide Interbank Financial Telecommunication establish its barometer of world financial health, currently referred to as the SWIFT Index.
Zeeb didn’t plan on becoming intimately familiar with the processing of securities when he took his first job, with Ontario’s Toronto Dominion Bank in 1986. “You slide into it,’’ he said, at SWIFT’s International Business Operations Seminar in, ironically enough, Toronto, in September. “Nobody knows about the post-trade business, until you’re actually in it.”