Letter From The Editor

LETTER FROM THE EDITOR

To Our Readers,

Last year, the securities industry was overshadowed by the demands of the Y2K computer fix. As systems were made ready for the new millennium, a number of less publicized initiatives were percolating on the back-burner, just waiting to come center stage in the year 2000.

One such item is now ramping-upž the industry’s move to a more streamlined settlement process, with settlements occurring one day after trade date, referred to as T+1. In the U.S., the initiative is just starting to gain momentum, with initial estimates calling for a June 2002 implementation. Outside the U.S., the Global Straight-through Processing Association (GSTPA) initiated a similar effort to build a T+1 environment specifically for cross-border trades. This year’s survey covers both industry developments, providing a number of candid insights about the work at hand, the critical issues and the reality of the implementation schedule.

The Economic and Monetary Union (EMU) introduced the euro currency, last year. The event went remarkably well with only a few, early-on problems surfacing. But, that’s not the end of the story. The euro-zone is not quite a singular, harmonious market place awaiting the foreign investor. Underlying the single currency remains an entanglement of exchanges, trading systems, clearing operations and central securities depositories. Global custodians and others need to untangle this infrastructure. The survey explores the issues and major development efforts which lie ahead.

Each year, EM countries are reviewed to highlight those troublesome issuesž EM Hot Spotsž of import to the most savvy investor. This year a handful of emerging markets were given mixed reviews by the global custodians, making the most improved EM award a difficult choice. The investor is provided with practical insights in these markets, accompanied by seasoned advice for sidestepping the many pitfalls. Several articles, contributed by global custodians, relate their firsthand experiences in the EMs, including an article about the anticipated market opening in Vietnam.

The international securities lending business had another boom year, with a 30% plus growth rate over last year. European markets were strong; custodians attribute growing demand to the euros introduction, developments in the U.K. market and a demand for certain French securities. On the other hand, the market in Asia softened somewhat. This section of the yearbook provides a three-year perspective on the marketplace, by EM country.

The Internet was elevated to "juggernaut" status in the securities business. Most custodians are rolling-out new Internet-based products this year. The survey found a very strong client pull for enterprise-wide applicationsž watch for them in the year ahead.

There is never enough ink or space to do this properlyž a hearty thank you to the participating global custodians for their many candid insights about the developments in the ever changing emerging markets. And to our readers, thank you for supporting Buttonwood’s seventh annual survey. We strive to make the Yearbook the most comprehensive and serious treatment of the important EM issues.

Sincerely,

John J. Giudice

Editor