London
Security ID Meeting Report
May 17, 2001
Unique
Security Identification
FISD
has held five working meetings (as well as a number of conference calls) as part
of an open inquiry into the requirements for unique security identification --
as it relates to assisting the industry in meeting the efficiency objectives of
automation and STP. Over 30 organizations, representing all segments of the market
data information chain, have been active participants in the discussion on a regular
basis. FISD staff will deliver an issue paper -- outlining what we've learned
so far -- at the next ISIN working group meeting on June 12. Copies of the paper
will be posted on the web and distributed to FISD members prior to the meeting.
The
purpose of the inquiry is to define what each segment of the financial information
chain requires for security identification (at what level of granularity) and
to provide an assessment of how the information might be communicated in an automated
environment.
In
summary … we've learned that financial instruments can be issued, priced,
traded and settled in many ways. And that different types of identifiers are relevant
at various levels and are used to convey information about the market on which
the security is listed, the clearing system through which the trade will clear,
the CSD where the trade will settle and the register to record changes in security
ownership. As such, ISIN (issue level identifier) alone no longer provides an
unambiguous pointer to trade and settlement location -- or security price. So
far, FISD has identified at least five core elements required for security identification
and STP as illustrated in the table below.
|
Attribute of |
Data
Element |
Definition/Function
|
|
Identification |
ISIN |
Issue level identifier |
| Identification |
Place of Official
Listing (POOL) | This
is the identification of primary and secondary markets where the security
is listed |
Identification/
Trade | Register |
Place where ownership
of security is held – can be inferred from POOL but is needed for settlement
compatibility
and speed of settlement – must know at point of trade to ensure
that risk is manageable |
|
Trade |
CSD Bridge Link |
Used to determine
if a security can be delivered from one local market to another – risk management |
| Trade |
Place of Trade |
Used as an aggregate
key by vendor systems and an important data element for financial instrument
pricing |
The
open questions relate to how the missing data elements will be collected and disseminated,
the standards used for their expression and the spectrum of practical issues associated
with implementation of new identification elements. The inquiry is not complete.
FISD is not ready to make a definitive statement on either industry requirements
or probable solutions. At the June meeting we will only be ready to summarize
the results of our inquiry and give a preliminary assessment of implications.
Click
here to see the
FISD issue summary prior to the meeting in London.
