by Lisa Taikitsadaporn and Hanno Klein | December 15, 2010 |
For the first time, there is actual proof of the long promised commitment from standards bodies and the industry to work together under the ISO 20022 umbrella. The Standards Coordination Group, the guardian of the recently updated Securities Investment Roadmap, is steering this collaboration. It is becoming the voice of open standards, promoting it up to law makers and regulators in Washington DC and Brussels.
Because the financial community is a vast one, encompassing institutions across the globe that deal with diverse asset classes at different points in the securities trading life cycle, different organizations have traditionally been responsible for developing their own messaging schemes. Today, financial firms often combine a great range of trading activities; therefore, the messaging standards from different organizations often intersect, but remain incompatible.
Within the financial services industry, there are multiple standards being used, hence the desire to ensure some level of interoperability. It is clear to many market participants that the FIX Protocol is the de facto standard for pre-trade and trade, that FpML is the de facto standard for OTC Derivatives, that ISO is the de facto standard for settlement and payments, and that XBRL is the de facto standard for business reporting. The Industry would benefit from an approach that leverages and includes these standards into a broader framework without reinventing and creating redundant messages that increase implementation costs and cause confusion for the industry.
The Standards Coordination Group began collaborating on the Securities Investment Roadmap in 2006, publishing the first version of the Roadmap in 2008 and the latest version in October 2010. The Investment Roadmap provides market participants with consistent direction when using financial services messaging standards by visually mapping the protocols to their appropriate business processes across asset classes and it also lays the groundwork for moving towards a common business model, ISO 20022, for the securities industry.