ANNA Service Bureau Contract Report

May 16, 2002

Participating Organizations

Bloomberg, Clearstream Banking (representing the ASB Advisory Committee), Deutsche Bank, FISD, Reuters, Standard & Poor’s/CUSIP, Telekurs Financial, Thomson Financial

ASB Contract

FISD has proposed a draft ANNA Service Bureau (ASB) Contract for consideration by the members of the Association of National Numbering Agencies (ANNA). The draft contract is modular -- consisting of a core license with the possibility of adding separate addenda for NNA’s that currently require (and wish to maintain) additional licensing terms/conditions. The ASB reported that the FISD proposal has not been shared with the ANNA members.

The purpose of the modular contract is to centralize the contract administration process and to make contract terms and conditions as consistent as possible. It also creates a foundation for ongoing discussions about business models, further administrative simplification and data usage requirements.

The FISD modular approach was proposed as an alternative to the single uniform contract currently under consideration by the ASB. The problem with the uniform contract is that it mandates terms and conditions that are more restrictive than those already in place. Vendors are not willing to accept a global licensing solution that conflicts with existing agreements or one that imposes more restrictive terms and conditions on the use of primary security identifiers.

Representatives from the ASB and the ASB operators indicated that they understand the objectives of the modular approach proposed by FISD and agreed to support it pending a closer examination of the contract language. FISD staff agreed to present the approach and rationale to the NNA’s at the next ANNA General Meeting (May 30-31) in Athens.

ASB Decision Making Process

The experience with the ASB contract discussions as well as with the proposals related to the addition of new data elements (e.g. OPOL/Register) required for unique security identification suggests the value of adjusting the decision-making processes associated with the ASB.

The ASB is “owned” and “managed” by the NNA’s who are currently being consulted on all operational requests. That process takes a long time to manage and is inconsistent with the environment in which the ASB operates. FISD members would rather have the Service Bureau empowered with the ability to make decisions on product enhancements and service offerings based on an analysis of the viability of the request and the commercial implications.

The discussion about decision-making procedures is directly related to the mission/function of the ASB as well as the general importance of security identification (and the associated identifier linkages) as a key component of automation and other STP-related initiatives. The industry is rapidly moving toward more efficient securities processing. Security identification (and other reference data components) is a key part of that movement – and the symbology requirements are still evolving. The Service Bureau is in an important position as the aggregator and dissemination point of ISIN-related information.

The conclusion is that the pace of change in the financial industry dictates the need for ongoing interaction between the ASB and the industry. The bureaucracy of ANNA or the lack of NNA understanding about this issue should not be a limitation on that interaction. (For example, it is unclear why the NNA’s are involved in the discussions about the ASB’s ability to provide an official place of listing identifier. This is a request of the ASB. The access to the data problems of the NNA’s should not necessarily preclude the ASB from offering this identifier as a product enhancement.)

FISD members suggest that decisions related to ISIN assignment and maintenance should be made between the ASB and the NNA’s – while decisions related to ASB operations and potential product enhancements should be made between the ASB and the industry. It was agreed that Atkin and Kuhnel would present this issue (delicately) at the next ANNA meeting.