Sorting Through Sibos Alphabet Soup

The takeaway from this year's Sibos, Swift's annual conference based on payments and securities messaging and related issues, concluding today in Toronto, could be that the industry, to a casual observer not enmeshed in its inner workings, faces a confusing tangle of alphabet soup.

By alphabet soup, I mean the variety of regulatory bodies, industry associations, standards bodies, and standards themselves for various different functions in the securities industry. There's LEIs (legal entity identifiers), which Inside Reference Data has covered extensively since the US Treasury's OFR (Office of Financial Research) started its drive to have the industry begin using the standard in 2012. There's Emir (European Market Infrastructure Regulation), which like LEI, is intended to reduce risk and improve risk management by the industry.

At the same time, the industry is still trying to grasp central clearing of OTC derivatives through central counterparties (CCPs), move messaging from the ISO 15022 standard to the updated ISO 20022 standard and make use of XBRL (eXtensible Business Reporting Language). Business identifier codes (BIC) figure into the LEI efforts, and LTIDs (large trader identifications), are a completely separate coding to be implemented next year, wholly separate from LEI efforts. Industry representatives will be watching next week as the G-20 itself takes on LEI issues in a workshop in Basel, with the EDM Council association representing financial firms, service providers and others, planning to play a role in the discussions.

Omgeo's director of industry relations, Tony Freeman, interviewed at Sibos on the unexpected effects LEI will have on the industry, wonders why the financial industry cannot emulate other industries with more consolidated and singular standards. ICANN regulates IP addresses globally, so there aren't disputes between nations over internet protocols; the airline industry, for all its woes, has globally accepted runway standards, with consistent symbols and markings worldwide. Those are just a couple examples Freeman points out.

Online and in print in our next issue, Inside Reference Data will report on and sort through developments among the acronyms as seen and heard at Sibos, and beyond.