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Swift Admits CIVIC Plans “Under Review”, as Observers Suggest Business Case Proving Difficult

As Reference Data Review went to press, it emerged that Swift could be having second thoughts about pressing ahead with previously-announced plans to allocate BIC-like codes to funds – dubbed CIVICs (Reference Data Review first brought to light Swift’s CIVIC plans as far back as September 2006).

In light of the failure of the ISO IBEI process to yield any standard global solution for legal entity identification, Swift’s project to clean up and extend BICs and BIC1s had been perceived by some as the pragmatic route towards the IBEI goal. And work has been under way between Swift, Avox (its chosen partner to support it in the BIC clean-up) and a group of banks to establish the way forward for CIVICs.

At this time Swift will say only that “its plans for CIVIC are currently under review”. The co-operative adds that “at this moment we are not planning any formal collaboration with S&P” – Standard & Poor’s having itself recently said it is looking into how to contribute to a global entity identification solution based on the issuer identification component of Cusips.

The problem is reportedly around building a business case for CIVICs. While Swift doesn’t have an issue with providing BICs and BIC1s for well-defined business purposes such as transaction reporting under MiFID, and while it can justify the allocation of identifiers to regulated fund managers and the corporates that would be eligible to use its network under its corporate access programme SCORE, it is reportedly struggling to establish a business case for creating codes for the broader legal entity community that could be used for myriad purposes such as risk management.

The CIVIC initiative would clearly take Swift closer to the realm of the IBEI as envisaged and pursued by ISO WG8. The failure of this effort to yield a useable standard entity identifier so far has been attributed in no small measure to Swift’s historic reluctance to act as the registration authority for a code for which every legal entity – even those outside the Swift customer base now and likely forever – would be eligible. The possibility that Swift will pull back from CIVICs would be consistent with the stance it has always taken on IBEI – that there isn’t sufficient business case for it to take the task on.

Where Swift is reportedly keener to pursue the creation of identifiers to support processes outside requirements such as MiFID is where there is an overlap with further business opportunities it would like to pursue itself, that is where there are more obvious commercial drivers than just an initiative being generally beneficial for industry efficiency. These could include, it is understood, codes for use to support trade enrichment and the appending of standing settlement instructions (SSIs) by Swift – an area it has long toyed with entering but for which it is apparently still in the very early stages of planning.

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