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A-Team Insight Blogs

Virginie’s Blog – Reference Data @ Sibos

Ahead of Swift’s annual conference later this month, here’s a quick roundup of the reference data related sessions on the agenda for those heading to Toronto (and a preview for those of you who will be waiting for A-Team coverage of the event). In keeping with Swift’s extended ambitions in the reference data standards space (see more on which here), the conference features a couple of sessions dedicated to discussing the legal entity identification (LEI) initiative it is involved in with ISO and Depository Trust & Clearing Corporation (DTCC), a session (rather cryptically) focused on exploring the strategic elements of reference data and numerous panels devoted to debating various market infrastructure and regulatory related topics.

The programme this year therefore extends beyond last year’s single session on the potential of a reference data utility (which I moderated, see more on which here) and aims to put a more practical spin on the LEI issue with a standards forum session on the “LEI in practice,” featuring participation from the Office of Financial Research’s (OFR) Bill Nichols. The aim, according to the session description, is to explore how the LEI could assist regulators in tracking systemic risk, the identifier’s potential impact on operations and legacy systems, and on reference data master files. Industry association and securities industry panellists will likely delve into some of the consequences of and requirements for reporting, and, hopefully, a balanced discussion about the benefits and challenges will be the result (this, as always, will be down to the opinions of the panellists).

However, given that a final decision on whether the DTCC/ISO/Swift bid to act as the facilitators/issuers for the new LEI standard is the correct direction to move in has not yet been made by the US Treasury agency (see more on which here) and will not happen before the conference, exactly how practical the session can be is debatable. This same problem will hamper the other Sibos panel on “LEI implementation and BIC evolution,” which features participation from Swift’s LEI programme director Paul Janssens and DTCC’s Avox subsidiary CEO Ken Price.

The Swift auditorium session on the LEI is seeking to address some of the issues that arose during the panel session on a utility last year, by providing direct Swift input on the subject of the LEI. The idea is to elaborate on how the LEI would be introduced, to talk up its benefits to the Swift community and the industry at large, as well as indicating how it will coexist with Swift’s own Bank Identifier Code (BIC), which is a key concern for some corners of the market. Of course, all of this will have to be theoretical, in lieu of the OFR’s final word, but it could provoke some interesting debate, given it is Swift’s first proper public forum on the subject. I, for one, am interested in hearing how all of this will impact Swift’s wider securities strategy, so you can expect some details on that front in the post-Sibos roundup.

These LEI sessions take place during the latter half of Sibos week along with the cryptically titled “Securities reference data: is your strategy up to scratch?” The session purports to explore whether the industry is effectively tackling risk through its approach to reference data (the obvious answer to which is most likely ‘no, but it’s working on it’). It also suggests that there could be a much greater role for market infrastructure providers in this endeavour. Although Swift isn’t participating directly in the panel, its key partner DTCC is, so one can, hopefully, expect a glimpse into further securities reference data related services from the duo (if the right questions are posed, that is).

As for the start of the week, the securities market infrastructures forum on the first morning of the conference will be my first port of call. The forum will include two panel sessions on the development of these new infrastructures, hopefully including a debate on trade data repositories, and a yet to be announced presentation (fingers crossed for something beyond a product pitch by a clearing organisation). It should be interesting to see how reference data could fit into these infrastructure developments and the role that data standards will play in the changing dynamics of the industry’s clearing and settlement framework.

Another interesting few sessions from a reference data perspective, could be those dedicated to exploring the impact of securities regulation in its many regional flavours. Given that data quality requirements feature in much of the post-crisis regulation and regulators such as the Commodity Futures Trading Commission (CFTC) and the Canadian Securities Administrators (CSA – see more here) have been focused on discussing data standards, one can expect the reference data element to crop up during these sessions, especially on the transaction reporting front.

Obviously, my own session on standards innovation is also worth a listen – during which you’ll hear about corporate actions standards and standards adoption lessons from the payments industry also (see my quick roundup of which here). And, courtesy of Swift and DTCC’s ambitions for its XBRL corporate actions initiative, there will be many more sessions this year on its progress, including an update from Citi on its own pilot project to this end.

A lot will also depend on how many securities industry professionals turn up to attend the conference: this will determine the level of engagement and interest during panel sessions, and the quality of any audience questions and interactions. Last year, although the overall turnout for the conference was impressive, the percentage of securities industry professionals on that list was not (see commentary on which last year here). However, last time the Sibos was in North America, the numbers were much more encouraging, with a much higher percentage of asset managers in attendance. That wasn’t hard to achieve, given that the conference was held in Boston, but will this contingent make it to Toronto? We only have two weeks to wait to find out.

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