The Financial Information Services Division (FISD) of the Software & Information Industry Association (SIIA) will use its forthcoming meeting in London on September 3 to inform members of its considerable recent activities in the reference data space.
Among the main topics for discussion will be recent white papers relating to its work as manager of the Reference Data Coalition (REDAC) on unique instrument identification, business entity identification and – with the London-based Reference Data Users Group (RDUG) – fund/counterparty identification. It will also use the meeting to allow the London Stock Exchange to brief industry participants on its planned SEDOL Master File (SMF) testing and rollout.
The meeting is due to take place at the offices of Citigroup in London’s Canary Wharf complex. Details of the recently published white papers are available at http://www.fisd.net/referencedata/default.asp.
In a recent missive from FISD chief Mike Atkin, REDAC/RDUG announced the posting of its white paper on unique instrument identification. Atkin said the paper has been well received and was recently presented to the Association of National Number Systems (ANNA) ISIN User Group, which indicated that it would add an official listing and possibly other data elements to its data feed.
REDAC’s initiative to define the interrelationship between entities, issuers and products, meanwhile, was the primary topic of last month’s REDAC Steering Committee meeting. Much of the discussion appeared to centre on whether REDAC is best positioned to take on the task of assigning, maintaining and cross-referencing identifiers for business and legal entities within the financial services industry.
At the meeting, the group identified two main issues. The first relates to management of risk and compliance requirements associated with dealing with counterparties. While there is general industry agreement that existing compliance procedures are insufficient, Atkin said, it isn’t clear whether there is widespread interest in establishing an industry-wide approach to this aspect of compliance, or whether such demand could be fulfilled by commercially available vendor products, such as the Entity CrossWalk Service venture between Standard & Poor’s, Telekurs Financial and Dun & Bradstreet.
The second major issue relating to entity identification relates to funds and the challenge of referencing between proprietary internal account numbers among counterparties. Specifically, post-trade allocation and settlement messages between investment managers, brokers, custodians and clearing agents have no standard format or identifier.
This makes it difficult to automate this portion of the transaction process, in turn presenting a substantial obstacle to true straight-through-processing. Indeed, as Atkin points out in his missive, “the absence of such identifiers has been cited as a key weakness of the GSTPA model and … the successful adoption of the FIX 4.4 STP model will be dependent on non-Omgeo and Alert participants having a set of identifiers.”
The RDUG group has developed a proposal for creating a standard identifier that it says is compatible with proprietary databases and could work alongside Omgeo and DTCC. Details are available in RDUG’s Fund Level Identification Paper, accessible via the FISD web-site.
As with REDAC as it considers a unique identifier, RDUG is seeking feedback on whether the industry is supportive of a standard fund level identification scheme, on the specifics of its own proposals, on possible use of Swift as registration and issuing agency for the proposed new identifier, and on the potential for a close relationship with the ISO TC68/SC4 International Business Entity Identification (IBEI) initiative.
Finally, REDAC will be helping user firms to coordinate testing of the London Stock Exchange’s SEDOL Master File product, which is due to go live on January 24, 2004. REDAC expects two days of testing between vendors and customers to take place in October or November, ahead of an anticipated ‘code freeze’ for the project in December.
The tests are aimed at ensuring that firms subscribing to multiple data feeds are able to test all systems and feeds in a simulated live environment.