A year after Reference Data Review broke the news that Swift was to open up its network to third-party vendors corporate actions data, six vendors are now in early adopter status, with a number of others in discussions to make a commitment to the project. The initiative is now on track for additional data types – under additional vendor categories – to be considered for distribution via Swiftnet, using the ISO 15022 format.
FT Interactive Data, Telekurs, Reuters, WM Datenservice, Mergent and Next Info (Group FinInfo), have signed up to join the early adopter initiative. All but Mergent participated in this year’s pilot for distributing corporate actions data via Swiftnet. All have developed ISO 15022 versions of their corporate actions data services.
Catherine Marks, SwiftSolutions business manager, asset services, at Swift, says the early adopter programme, which runs from August 2004 to March 2005, will open up participation for market data vendors wishing to distribute – and Swift members wishing to receive – third-party services via Swiftnet. New data types may include intra-day and closing market prices, new-issue and prospectus documents, calendar information, trade volume data and index data, in addition to the corporate actions already available.
The introduction of the early adopter programme followed the creation of a new market data vendor membership category at Swift’s AGM last June, by unanimous vote. The vote itself was preceded by the CA pilot, which ran from December 2003 to June 2004, in which a select number of vendors sent ISO 15022 corporate actions announcements using the MT564 and MT568 messaging formats. The pilot used the Swiftnet FileAct facility, which resembles FTP. It allowed Swift to assess the quality and timeliness of information, completeness of the messages, and adherence to market practice guidelines.
Swift members participating in the pilot reported that most information was received ahead of alternative sources, including agent banks in local markets. The pilot also suggested that most data was accurate and complete. Finally, because the data was delivered in the same format, participants gained operational benefits from comparing more easily information from the data providers against their agent bank notifications.
According to Marks, the new early adopter programme, which features incentives for market data providers to join Swift, appeals in different ways depending on the information vendor. FT Interactive Data, she says, has a long-term commitment to industry standards, and the use of ISO 15022 represents a good fit.
Mergent, meanwhile, saw the opportunity for reaching a new audience. Feedback from the pilot suggested institutions liked receiving corporate actions in ISO 15022 whether or not they were supplied via Swiftnet. Mergent, originally formed from former assets of Moody’s Investors Service, recently acquired the historical data services of the former Iverson Financial from new owner Capco. Mergent itself, meanwhile, was acquired this year by Xinhua Financial, based in Hong Kong.
For Swift itself, the goal is to extend acceptance of ISO 15022 beyond its traditional user base. As an industry utility, Swift has been told by its members that they expect to benefit from expanding ISO 15022 usage in the securities chain as far as possible; from issuer, to exchange to market data vendor.
The corporate actions pilot involved market data providers, and Swift has since attracted a number of exchange participants, among them the London, Johannesburg and Tokyo Stock Exchanges, all of which will participate in a Sibos panel discussion on October 13 hosted by Reference Data Review’s Andrew Delaney. Marks says getting issuers on board is a longer-term goal.
Under the early adopters programme, Swift is opening Swiftnet up to its new Securities Market Data Provider member category, which will also cover real-time pricing and other reference data types.
For the latter, Marks says, the Financial Information Services Division’s Market Data Definition Language (MDDL) will be available as a technological tool for distribution using FileAct rather than the various MT Swift messages.
Meanwhile, the ISO TC68/SC4 Working Group 11’s work on a data model for market data – when it comes to fruition – will offer up an XML-based format using ISO 20022, successor to ISO 15022. Marks believes the market data providers are on board with WG11’s plans. The vendors may see a benefit in using Swiftnet for swapping such non-urgent services as end-of-day pricing so as to alleviate the burden on their own networks, which are under increasing pressure to offer lower-latency access to price updates.
Marks also believes that cost may encourage more take-up of Swiftnet’s new ability to distribute external data services. She says corporate actions messaging using FileAct average around EUR 50 cents per day for receiving users, which she says is favourable compared with traditional FTP routes, including firewalls, software and server costs.
Future data types, meanwhile, could include client or partner identification data. Swift itself offers its members its BIC directory. Marks says that if additional vendors develop services in the ISO 15022 format, they could join within the new member category.