SGSS’s Prigent seeks global expansion

SGSS’s Prigent seeks global expansion

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Regulation should be an opportunity to transform rather being than a constraint on business, according to Bruno Prigent, global head of Societe Generale Securities Services (SGSS).

Prigent spoke to Global Investor/ISF as the bank announced strategic appointments to develop its business in the UK as part of a wider global project.

It has been a busy year for SGSS following the completion of its acquisition of brokerage firm Newedge and launching new products to help clients meet new European regulations including the Alternative Investment Fund Managers (AIFM) directive and European Markets Infrastructure Regulation (Emir).

“You could consider regulation as an obligation, full stop. But our approach is to leverage regulation to create new services for clients, such as we have done with the AIFM directive and Emir. Rather than just being a constraint, it’s an opportunity that allows us to transform our business,” said Prigent.

Recently acquiring the remaining 50% stake in Newedge from Credit Agricole is one example of how Societe Generale is hoping to capitalise on regulatory changes. The move combines the bank’s activities with Newedge’s execution and clearing services, placing it in a good position as derivatives must now be centrally cleared under Emir.

Prigent said: “The combination of Newedge and SGSS is a good ticket from a business prospective as it means we now cover all aspects of post-trade services. To have us both under the same roof is a strong combination for our clients and for the future. This was a turning point for us as it clearly shows that we have a strong commitment to post-trade services.”

Aside from European regulation, Prigent also sees huge potential in the UK where he believes there is a gap in the outsourcing market.

“In the UK market there are not many providers that outsource middle and back office for broker-dealers.”

In light of this SGSS will soon introduce two main product offerings in the UK, the first targeted at brokers, banks and financial institutions.

The second offering will be an outsourcing solution for wealth and investment managers covering post trading from global execution to global custody.

The bank recently appointed Bertrand Blanchard to spearhead the UK expansion and Prigent said it was hiring other people to support the move.

Following Societe Generale’s recent decision to outsource some of the back office of its CIB business to Accenture, Prigent said there are plans to have a similar partnership for SGSS’s UK offering.

He said this relationship would enable SGSS to avoid having to start from scratch, adding: “I believe that this combined with our knowledge about broker-dealer outsourcing from Paris will make our offering stronger and enable us to deliver a good service.”

The custody bank’s UK project is just one component of its global strategy plan for 2014-2017, which includes three main pillars, the first being geography.

“Our second target is Germany where today we have a strong franchise in fund administration and distribution but we need a global approach to our depobank services,” explained Prigent.

“We will continue to expand our own sub-custody network, which currently covers 24 countries. Other players don’t have a large network so we consider ours to be a strength.”

SGSS is taking a pragmatic approach to how many markets it intends to extend its network.

“For each country we want to adapt the local sub-custody set-up for international needs wherever possible. For example in South Africa we have specific entity from which we could have direct access with other countries nearby such as Ghana, which we’re proposing to clients.”

As to whether the bank was considering further acquisitions, Prigent suggested that it would depend on the opportunities.
“For the time being, we are concentrating on our development plan based on organic growth.”
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