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London Exchange Delays Sedol Upgrade, Citing High Demand

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The London Stock Exchange has delayed the launch of its upgraded Sedol Masterfile Service, citing additional testing precautions in the face of apparently greater-than-expected demand. The delay, however, is not expected to be significant, with a new launch date scheduled for announcement on January 23.

The new version of the SMF Service will change the Sedol securities identification codes to a seven-character alphanumeric format from its previous numeric format. The upgrade is part of the exchange’s attempt to establish Sedol as a global standard securities identifier. The exchange last month contracted with Swiss vendor Telekurs to provide some international data coverage for the new service.

In a letter to prospective clients and partners, LSE chief information officer David Lester said the exchange had “taken the precaution of changing the launch date following a very high level of demand for access to the new Sedol Masterfile web-site. In the meantime, additional testing will be carried out to ensure a seamless transition to the new service.”

He said the exchange will have sufficient codes in the old numeric format to continue issuing Sedol numbers until the revised live date. He added that the existing Sedol service will continue to run until migration to the new service has been completed. It isn’t clear how long that is expected to take.

It appears that some clients may not have been ready to accept the new codes anyway. “Some customers have expressed concerns with their readiness for the enhancements by 26 January,” Lester wrote. “Therefore, rescheduling the live date will also allow our customers further time to prepare for the change.”

The new SMF Service is aimed at widening the exchange’s capability for issuing identification codes for global securities. From the time of launch, the SMF Service will have allocated codes for all global listed equities and fixed-income securities. The new service will also be capable of handling additional identification data, including market identifier codes (MICs) and ISINs. This, the exchange believes, will help its clients reduce trade failures and streamline their manual processes.

In the run-up to the launch, the LSE has published pricing for the new service. For client firms that are single legal entities, user licenses are based on access to bands of Sedol codes: £500/month for fewer than 1,000 codes; £1,500/month for 1,000-5,000 codes; £5,000/month for 5,001-10,000 codes; and £15,000 for more than 10,000 codes. For distributing vendors (and user firms who wish to distribute to their clients), the Sedol Masterfile costs £15,000/month, with access to U.K. corporate actions data at £35,000/month.

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