November 7, 2002
Reference Data: The Storm Before the Calm
Reference data, symbology and unique security identification have
long been considered only in the domain of the back office, but
with the global movement to shorter clearing and settlement
cycles, these issues have found their way into the forefront of
the financial information industry. Reference data is now being
viewed as the fuel of STP because it touches virtually every
process within user firms. Standards and reference data
consistency are needed to eliminate manual processes, reduce
errors and delays and make the entire transactions chain – from
security set-up through settlement more efficient.
FISD members have been actively working on symbology and security
identification issues over the past few months and activity is
clearly heating up. The London Stock Exchange announced
plans to
extend SEDOL to meet industry requirements for a market level
identifier, and other
groups are looking into alternative strategies for improving
front/back office symbology.
The light is finally shining on reference data and security
identification issues as an acknowledgment of the data side of the
STP equation. And while there is broad consensus on the importance
of a market level identifier for dealing with multi-listed
securities, there is some nervousness associated with all the
emerging proposals. The nervousness exists because the industry is
not homogenous. Different segments, and even functional areas
within the same segment, use identifiers in different ways and
there are open questions about the impact of implementation on
internal systems and processes – not to mention questions about
the commercial structures associated with the emerging proposals.
This report provides a summary of the activities that we’ve been
involved in and suggests that it’s time for the entire industry to
pay close attention and to make sure the emerging proposals are
coordinated in a way that meet the business, information
architecture and technical requirements needed to facilitate
automation and risk management.
Click here for full report
available to FISD members only.
