DTCC Nudge May Finally Complete ISO Transition
I'm not an industry practitioner or a C-level technology executive, but from what I see and hear so far about ongoing efforts to persuade the securities industry and its firms to adopt the ISO 20022 standard for trade messages, it seems like the recalcitrance of some firms is hindering progress for the industry as a whole.
While International Securities Association for Institutional Trade Communication (ISITC) is working on a business case to show the benefits of migrating to 20022, some members of Swift, the registration authority for ISO standards, said they don't want to drop the older 15022 standard completely. Only now does the industry have an effort under way, thanks to DTCC, to complete the migration by 2015, more than 10 years after 20022 first appeared.
The result of this shaky or divided support for the new standard was that the industry has been stuck for several years with two standards. A standard should be universal for all participants and everyone must adhere to it. A standard is created with the purpose of making sure no communications are lost, mishandled or misunderstood. Allowing two standards to continue with no end in sight seemed to defeat their very reason for being.
ISO 20022 first emerged in 2004. "ISO 20022 is modeled after a business process and as a result offers the industry increased opportunity to increase straight-through processing across the corporate actions lifecycle," says Steven Gale, co-chair of the ISITC corporate actions working group and a vice-president at Northern Trust.
A re-engineering initiative by the Depository Trust & Clearing Corporation (DTCC), set for implementation in late 2015, should get laggards on board with the new standard. It's more than a bit belated, but DTCC is now using its influence to sunset 15022 with the initiative. As Paul Fullam, senior director, XSP, and co-chair of the ISITC US corporate actions working group, told Inside Reference Data: "DTCC's move in the US market will prove to be critical to push the move forward."
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