About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

And So it Begins…

Subscribe to our newsletter

Sibos 2010 kicked off this morning to a rather drizzly but promising start; with around 8,000 odd delegates registered for the annual Swift user conference in Amsterdam, it’s set to be a busy week. The securities market infrastructure session began proceedings by debating the benefits of competition versus consolidation in the evolving global market: a topic that is highly relevant for the reference data sector also.

The general consensus of the panellists, which included BNP Paribas’ head of sales and relationship management Alan Cameron and ABN Amro’s CCO Jan Bart de Boer, was that interoperability and competition are preferable to a monopoly in the world of post-trade infrastructures. Interesting news given that this afternoon’s panel on a “golden” securities reference data utility is about setting up such a mandated monopoly.

Rather than imposing a regulatory mandated monopoly, Thomas Zeeb, CEO of SIX Securities Services, argued that interoperability between infrastructures in individual European countries is the more pragmatic and practical option. “However, this level of interoperability needs to be fully supported and this is where regulation is needed: to impose sanctions on those that block interoperability.”

Philip Brown, member of the executive board for Clearstream Banking, added that the cost of establishing a monopoly would potentially make it an unattractive proposition. “If we are aiming to achieve greater efficiency and lower cost across Europe, a single monopoly provider is unlikely to be able to offer this. Moreover, mandating consolidation will not work due to the fact the public sector is not able to agree on something as esoteric as post-trade infrastructure,” he explained.

Cameron agreed and noted that there are significant obstacles in the path of achieving the removal of the Giovannini barriers across Europe, including differences in the treatment of tax and corporate actions from country to country. He pointed to the success of initiatives such as Link-up Markets between central securities depositories (CSDs) as an example of interoperability in action.

He also reiterated the potential cost of a monopoly as a drawback: “It will be difficult to build into a system all the requirements of individual European markets, three or four may be possible, but 20? Who wants to pay for that?”

De Boer reckoned that many local small and mid cap firms would also be uninterested in using a global platform due to cost considerations (an equation that has traditionally put many of these firms off from using Swift, pre-Swift Lite that is). “Local constituents want local silos in order to meet their specific requirements,” he added.

These are arguments that could also be used in the discussions around the establishment of a central reference data utility for Europe. Cost is certainly an issue and the desire for the continuation of domestic standards for data is another that rings true in the reference data context. Perhaps the idea of several commercial providers in the utility context, where data standards mapping is provided, could be a comparable offering to the post-trade infrastructure equation? I await this afternoon’s panel to find out…

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Approaches to ESG data for the Sustainable Finance Disclosure Regulation (SFDR)

The EU Sustainable Finance Disclosure Regulation (SFDR) outlines extensive rules designed to ensure transparency across sustainable financial markets. It also demands huge volumes of non-financial ESG data to be sourced, managed and governed, some of which is difficult to find, and much of which is unstructured and of variable quality. The data challenge is exacerbated...

BLOG

FSB Explores Potential of Adding LEIs to Cross-Border Payments

The Financial Stability Board (FSB) is encouraging greater adoption of the Legal Entity Identifier (LEI) in a report exploring its potential in cross-border payments. No implementation mandates are suggested, although the report does identify how the LEI could be a useful addition to payment transactions. The LEI is currently mandated for use in OTC derivatives...

EVENT

A-Team Briefing: Cloud Innovation for Data Ops

This Innovation Briefing will explore approaches to data infrastructure transformation, technologies required and how to make sure processes are optimised to support real time data management. Hear from leading practitioners and innovative technology solution providers who will share insight into how to set up and leverage your data infrastructure to provide user access to consistent data and analytics, and companies the ability to monetise their data.

GUIDE

Regulatory Data Handbook 2022/2023 – Tenth Edition

Welcome to the tenth edition of A-Team Group’s Regulatory Data Handbook, a publication that has tracked new regulations, amendments, implementation and data management requirements as regulatory change has impacted global capital markets participants over the past 10 years. This edition of the handbook includes new regulations and highlights some of the major regulatory interventions challenging...