July
10, 2001
Organizations
Present
Bank
of New York, Bloomberg, JP Morgan Chase , Clearstream Banking,
Euroclear Bank, FISD, London Stock Exchange, Madrid Stock Exchange,
Merrill Lynch, Standard & Poor's Corporation, SWIFT, Telekurs
Financial, Verdepapierscentralen (VP-Denmark), WM Datenservice
ANNA
Service Bureau Launch
The
ANNA Service Bureau (ASB) went live July 2. The initial database
load includes approximately 686,000 ISIN's and incorporates information
from about 20 NNA master files. Daily updates are being processed
by the ASB. There are some language and format issues that need
to be resolved to complete the testing phase. The ASB reports
they are slightly ahead of schedule on technical implementation.
Notice
on testing was sent to the three vendors getting a direct connection
to the ASB on July 10. ASB/vendor testing is scheduled for August/September
with an expected cut over to the ASB scheduled to occur no later
than October 10. ANNA indicated that any vendor or institution
interested in getting a direct connection to the ASB is invited
to participate in the testing process. Interested parties should
contact Scott Preiss at
the
S&P CUSIP Service Bureau (212-438-6560).
Unique
Security Identification
FISD
and SWIFT presented the preliminary results of our research on
the information requirements for unique security identification
to ANNA and the ISIN User Group on June 12. In summary the indications
from our research were as follows:
- ISIN
is a unique issue identifier but not always a unique security
identifier. ISIN alone is not sufficient for unique identification
because one ISIN can be shared among offerings in multiple locations.
However, our research indicates that ISIN should remain unchanged
because of its importance to front-office systems and for the
aggregation of global positions.
- The
most critical data element for unique identification is the
place of official listing. Place of official listing identifies
the primary and secondary markets where the security is listed
and is needed to differentiate the security in the case of multiple
listings. A market issuance in multiple locations will be subject
to different settlement, pricing, tax/corporate event treatment,
and allocation of national numbers.
- Register
is an important data element for transferability across markets
and to help route the security to the correct place of settlement
and holding. Our research indicates that while registration
can be inferred from place of listing, it is needed to determine
settlement compatibility and must be known at the point of trade
to ensure that the risk is manageable.
- Place
of trade is not a component of security identification but
is needed as a practical matter for due diligence and market
compliance for researching trade execution problems, transaction
related taxes and for determining trade related statistics.
Pathway
to Solutions
FISD
and SWIFT members believe that as a result of this research we've
accurately identified the essence of the security identification
challenge. We proposed shifting the discussion from "inquiry
on the problem" to "possible solution implementation."
We further suggested that ANNA and the ASB were seemingly in a
good position to help create, implement and manage the solution.
ANNA agreed to explore the range of options and to determine if
a business case could be developed to justify implementation.
Discussions
on possible solutions will need to cover the following components:
- the coding structure of the information (i.e. how a standard
would be applied to the security identification requirements);
- the content (i.e. collection of the data and the creation
of linkages between ISIN, place of listing, register, and place
of trade); and
- distribution (including the dissemination mechanism and
commercial terms/conditions).
Status
of Discussions
- SWIFT
reported that the Market Identification Code (MIC) has been
updated to include all exchanges and extended to cover ECN's
and ATS. As such it is believed that the new MIC could be used
to identify both place of listing and place of trade.
- SWIFT
reported that discussions are underway to modify the Bank Identifier
Code (BIC) to include non-financial institutions. The new business
entity identifier (BEI) could be a possible coding structure
for identification of register.
- ANNA
agreed (again) to examine the issues associated with the collection
of place of listing and register data as well as to look into
the development of a business case to create the linkages and
disseminate the information. The evaluation is due for the September
25 meeting.
For
place of listing
- The
challenges of data acquisition relate to the fact that the
source of the data is stock exchanges and trading systems,
not numbering agencies (i.e. who will collect, validate, link
and maintain the data)
- The
challenges of assignment relate to decisions on whether a
new identification code at the place of listing/register level
should be created and integrated into a database of relationships
or whether a standard symbology should be creating for communication
of the information
For
register
- the
challenges of data acquisition relate to data sourcing (i.e.
is the data on book entry available and how can it be collected/aggregated)
- The
challenges of assignment relate to the difficulties of creating
the linkages between register, ISIN and place of listing
STP
Relationships
All
participants are in agreement that a relationship must be maintained
between ANNA, the ISIN User Group and the organizations involved
in STP. Relationships need to be established and maintained with
ISO 15022, X9D, Omgeo, GSTPA, FIX, SMPG, SIA T+1 Committee and
others. The issue of security identification needs to be effectively
coordinated. SWIFT agreed to be the point of communication with
GSTPA. This issue will be discussed at the September meeting.
Post-GIAM
Era
The
issue of enhancements to the ASB feed was tabled until the September
meeting.
