Open Season For Instrument Codes?

This might be slightly belated, but there are some considerations to note about Thomson Reuters opening the Reuters Instrument Codes (RICs) to outside desktops and feeds a few weeks ago. Whether RICs were opened up in response to the European Union's antitrust inquiries, as some have suggested, or just to lead the way to more commercial opportunities for Thomson Reuters, one has to wonder whether simply making once-proprietary codes open-source is the way this should be handled.

Thomson Reuters' opening of RICs follows Bloomberg's decision to open its instrument codes back in 2009, while the Cusip standard operated by Standard & Poor's has always been open. Should instrument codes be handled like the legal entity identifier (LEI), which will have its administrators and operators chosen under guidelines set by agencies including Europe's Financial Stability Board (FSB)?

Ed Ventura, president of industry consultancy Ventura Management Associates, suggests such a possibility. "There's a cost to maintain them," he says of the instrument codes. "They should be open, but I am sensitive to the commercial understanding of it."

While it might not be feasible or possible to standardize several different proprietary instrument codes, in another facet of identification – the LEI – the task before the industry now is to implement a federated model out of the central operating units and local operating units structure that the Financial Stability Board (FSB) has designated for administering the LEI.

"The fastest way to get LEIs into the world is to re-use an existing infrastructure," says Tim Lind, global head of legal entity and corporate actions, enterprise content, at Thomson Reuters. "A federated model itself will take more time to set up, but we support the FSB recommendations to ensure that the governance is appropriate and that public interests are ultimately served, not the interest of any one commercial entity or anyone who harbors any other ambitions that would be associated with the LEI."

Between now and March 2013, it remains to be seen which providers will end up with designations to administer the LEI, and beyond that, just how a variety of providers in different geographies will form a federated model. What was originally foreseen – a tight and comprehensive combination of the International Organization for Standardization (ISO), Swift and the Association of National Numbering Agencies (Anna) that was also backed by the industry itself - has given way to something more uncertain.