Euroclear is building a set of ISO 20022 corporate actions messages for issuer to CSD communication, as part of its move to a single platform across all its markets and the implementation of its new Common Communications Interface.
The new messages will replace existing proprietary electronic communication between issuers or issuers’ agents and the CSDs within Euroclear for corporate actions activity, and will enable corporate actions announcements to be made in a standard, electronic format from the outset, according to Kevin Wooldridge, who heads the ISO standards activity within the business model and harmonisation division of Euroclear.
Swift, the registration authority for ISO 20022, has not yet announced plans to upgrade its core corporate actions messages from ISO 15022 format to ISO 20022.
Euroclear first looked at standardisation for issuer/issuer agent to CSD communication for corporate actions some three years ago, and established the existing ISO 15022 corporate actions messages did not meet the functional requirements. Rather than asking the ISO community to change the 15022 messages, the ICSD determined a better route would be to model the new messages in ISO 20022. Instead of asking Swift to create messages for its purpose, Euroclear decided to create them itself, leveraging inhouse UML modelling expertise and implementing the necessary tools to create ISO 20022 messages.
The new message set will have the same scope as the existing MT 564, 565, 566 and 567 corporate actions messages but because ISO 20022 is much more focused on business modelling the messages are more granular and the final suite of messages will number some 20, covering the whole process between issuer and CSD, including announcements, election processing and final distribution. Processing between CSD and participants will stay in ISO 15022, with Euroclear acting as a hub in the process and translating between the formats.
Wooldridge says Euroclear is on target to make its submission to ISO by the start of Q3, and anticipates the approval process will take some three months.