The two reference data industry groups – the US-based Reference Data Coalition (Redac) and the European Reference Data Users Group (RDUG) – are close to finalising details of how to merge their activities”.
With the focus of both groups in the same area, it would seem a logical step to merge the efforts, providing the initiatives with greater scale and resource. Officials of both groups have been making joint presentations. “I think it is a solid idea and everyone is pretty much in agreement,” says Mike Atkin, vice president of the Financial Information Services Division (FISD) of the Software and Information Industry Association (SIIA).
The groups are also starting to move towards having their efforts accepted into the International Standards Organisation’s process for definition.
Redac was established by the FISD to ensure that groups working in the reference data area, such as RDUG and the International Securities Association for Institutional Trade Communication (ISITC) are aligned with the primary objectives of the overall coalition.
Atkin says that a formal alignment of Redac and RDUG makes particular sense in the wake of Reuters’ withdrawal from administrative support of RDUG following the closure of its STP consultancy group and subsequent redundancy of Tony Kirby, secretary of RDUG. He stresses, however, that this is unrelated to the vendor’s involvement in the standards development process.
Kirby says, “The goal of Redac is not to take over other groups, it is to bring all the people that are working on reference data stuff together under a common agenda. If people want to get together independently, identify problems and come up with recommendations, then we think that’s great and support it. RDUG is, however, now faced with a lack of staff support, which is all-important when everybody has their real jobs to do.”
The focus of RDUG has been on instrument identification and fund level identification. On the former, says Atkin, RDUG agrees, “this is being handled correctly by the work that FISD is doing and there is no need to add any more to that”. The fund identification work has now also been passed to FISD. “They’ve passed that to me and I’m going to shop that around, with ISO, to make sure that it matches up with the activity taking place (in ISO sub-committees) and to make sure that there is a plan in place to evaluate the proposal and make sure that it can be managed properly. If you want it to be an ISO standard, you’ve got to go through all the ISO processes,” says Atkin.
“The question we have is can this funds level identification proposal stand on its own or does it have to be part of a total business entity identification process? If it can stand alone, is it a good proposal? I’m assuming it’s great, because the people that worked on it are smart, but let’s makes sure that we’ve got buy-in from the companies that matter.”
The coming together of the various bodies is eased by the fact that many of the faces are the same at their different meetings. Atkin points out that four members of the RDUG executive committee are also on the Redac steering body. “What we don’t want to do is lose the global make-up of the conversation. We need to make sure that European issues are understood, that US issues are understood – and we want to do everything we can to make sure that the Asian market is plugged in,” he says. “We are going to have to go to Asia and say ‘please join us’, because they have the same problems.”
As well as the bodies coming together, the standards – proposed and existing – are starting to come together into a form that can go through the ISO adoption process, though most will be introduced or adopted in the industry before that.
Central here is the convergence of initiatives including: ISO 15022, a messaging standard for trade confirmation messages; the FIX Protocol group’s work on pre-trade information; and Market Data Definition Language (MDDL), an XML protocol for reference data being developed by the FISD. The new XML version of ISO 15022, has taken some steps towards integration, particularly with FIX, and Atkin says, “in essence completes the work of what was working group 10 (WG10).”
The key element of 15022 is the datafield dictionary, but it is not complete in that it doesn’t include elements such as pre-trade data, reference data, corporate actions or settlement information. All of this falls into the lap of ISO technical committee 68 sub committee 4 (technically referred to as TC68SC4).
“SC4 is saying that we need a more comprehensive data dictionary, the output of which will be a vocabulary translated into 15022 messages, and it will be a full data model,” says Atkin. “They are now gearing up to manage that, with the creation of WG11. FISD will be part of that, and MDDL is the area that is focussing on reference data and corporate actions. In ISO parlance it is these financial instrument attributes that are not yet in the 15022 datafields. We are all going to dump our vocabularies into this new data model.”
“Standards fall into three distinct categories: standards for identifying things – be it instruments, entities, funds or counterparties; standards for content, which is the vocabulary; and standards for messaging,” says Atkin. “All of those need to be ISO standards, so we all report to SC4, and take our direction from them on how they want to manage the process correctly. Part of the concern that we all have is the difference between the industry’s timeframes and the ISO process timeframes and we’re going to have to let ISO figure out that part of it,” says Atkin. “We are not waiting for ISO to do the work, though. We’re going ahead and doing it now, but we want it to be ISO standard and hopefully they can work out how to expedite their activities. We intend to work through and with them.”