LEI Up, ISO 20022 Down

About a month ago in this space, I made the point that the financial services industry's interest in achieving better risk should propel migration to the more advanced ISO 20022 messaging standard for corporate actions.

That assertion was soundly refuted during our webcast last week concerning corporate actions events processing issues. Selvaraman Ponniah, an analyst for Barclays Capital in London, expects both 20022 and its predecessor ISO 15022 to be used simultaneously for years more. He poked holes in the idea that the industry's support for adopting 20022 is strong, noting that the on-the-spot poll conducted in the webcast only yielded 34% agreeing that those promoting the standard would be able to convince the industry to adopt it. And Elizabeth Krow, who works on US corporate actions operations for BlackRock, says the firm backs adoption of 20022, but is encountering a catch-22 of not being able to move forward on it largely because there isn't enough support.

European markets have been the most wary, says Gerard Bermingham of service provider Information Mosaic. In the Asia-Pacific region, there have been a couple of high-profile adoptions, such as Jasdaq and the Singapore Stock Exchange, but is it also possible that US firms, seemingly strong proponents of ISO 20022, are backing off?

The observations from BlackRock and Barclays Capital might make it seem that way, but ISO 20022 does have some influential US-based backers, or backers with significant US presence. Information Mosaic, along with Thomson Reuters, Brown Brothers Harriman, the Depository Trust & Clearing Corporation (DTCC), Fidelity ActionsXchange and SunGard XSP are major supporters of ISO 20022. Northern Trust, to name another major global firm, has also invested in adopting it.

So, does the assessment one gets of the value of ISO 20022 and how much it is catching on and hastening the phase-out of ISO 15022 depend only on who you ask? I'd like to put that question to you, our readers, and invite you to comment here or in our LinkedIn discussion group, where this issue will also be covered.

Also on Inside Reference Data's radar this week is the news that the US Treasury's Office of Financial Research, which is represented on the legal entity identifier (LEI) Regulatory Oversight Committee, plans to publish a blueprint for an interim LEI system making pre-LEIs issued by any country's local operating unit (LOU) authority compatible for reporting anywhere worldwide.

This move, if it comes to fruition, would be a boost for LEI adoption efforts. Judging by some of the ongoing chatter doubting the effectiveness of a federated LEI model (as opposed to a centralized one), just making the identifier compatible no matter what the jurisdiction could yield a more workable quasi-federated model.