20 April 2014

Gary Wright

Gary Wright - BISS Research

277 | posts 895,485 | views 369 | comments

Post-Trade Forum

The Post Trade Forum's aim is to propagate debate and discussion between senior practitioners in Post Trade Operations in the global securities market; to bring about increased awareness and knowledge across both buy-side and sell-side financial institutions in financial products and be a focal point for firms and practitioners to air views.

Who's on first, What's on second Identity Standards

08 May 2012  |  2324 views  |  3

Like the old Abbott and Costello routine, [when Lou Costello is considering becoming a ballplayer and Bud Abbott wants to make sure he knows what he's getting into] there can be huge confusion and mishaps if there is ambiguity in the identity of who’s involved in a transaction. For those that may not be familiar with this running gag, the (slightly abbreviated) routine goes as follows:

Abbott: Strange as it may seem, they give ball players nowadays very peculiar names. Costello: Funny names?

Abbott: Nicknames. Now, on the St. Louis team we have, Who's on first, What's on second, I Don't Know is on third— Costello: That's what I want to find out. I want you to tell me the names of the fellows on the St. Louis team.

Abbott: I said Who’s on first, What’s on second, I Don't Knows on third. Costello: You know the fellows' names?

Abbott: Yes. Costello: Well, then who's playing first?

Abbott: Yes. Costello: I mean the fellow's name on first base.

Abbott: Who! Costello: The fellow playin' first base for St. Louis.

Abbott: Who. Costello: The guy on first base.

Abbott: Who is on first. Costello: Well, what are you askin' me for?

Abbott: I'm not asking you--I'm telling you. Who is on first. Costello: I'm asking you--who's on first?

Abbott: That's the man's name. Costello: That's who's name? Abbott: Yes

Costello: When you pay off the first baseman every month, who gets the money? Abbott: Every dollar of it. And why not, the man's entitled to it.

Costello: Who is? Abbott: Yes.

Costello: So who gets it? Abbott: Why shouldn't he? …

Costello: Look, all I want to know is when you sign up the first baseman, how does he sign his name? Abbott: Who

Costello: The guy. Abbott: Who.

Costello: How does he sign... Abbott: That's how he signs it.

Costello: Who? Abbott: Yes.

Costello: All I'm trying to find out is what's the guy's name, on first base! Abbott: No. What is on second base.

Costello: I'm not asking you who's on second. Abbott: Who's on first. Costello: One base at a time!

Costello: St. Louis has a good outfield? Abbott: Oh, absolutely.

Costello: The left fielder's name? Abbott: Why.

Costello: I don't know, I just thought I'd ask. Abbott: Well, I just thought I'd tell you.

Costello: Then tell me who's playing left field? Abbott: Who's playing first.

Costello: Stay out of the in-field! The left-fielder's name? Abbott: Why.

Costello: Because. Abbott: Oh, he's centre-field.

Costello: Wait a minute. You got a pitcher on this team? Abbott: Wouldn't this be a fine team without a pitcher? Costello: Tell me the pitcher's name. Abbott: Tomorrow.

Costello: Now, when the guy at bat bunts the ball--me being a good catcher--I want to throw the guy out at first base, so I pick up the ball and throw it to who? Abbott: Now, that's the first thing you've said right.

Costello: I DON'T EVEN KNOW WHAT I'M TALKING ABOUT!    Abbott: Don't get excited. Take it easy.

Costello: I throw the ball to first base, whoever it is grabs the ball, so the guy runs to second. Who picks up the ball and throws it to what. What throws it to I don't know. I don't know throws it back to tomorrow--a triple play. Abbott: Yeah, it could be.

Costello: Another guy gets up and it's a long ball to centre. Abbott: Because.

Costello: Why? I don't know. And I don't care. Abbott: What was that?

Costello: I said, I DON'T CARE! Abbott: Oh, that's our shortstop

Now identity management is one of the holy grails of settlements. Legal Entity Identifiers (LEI) has already taken the focus of reporting but it holds so much more potential. T+2 and T2S are coming and it will be a prime requirement for the industry to have a standard for identifying counterparties to the transaction. The ‘Who’s on first’ confusion must be rectified and LEIs are another piece of the industry jigsaw, leading to industry wide STP.

At the next Post Trade Forum we will be debating the impacts of T2S on the market and investors and how T+2 will influence a change in processes.

PS: For those of you that might want to see this sketch in full performed by Abbot and Costello here’s the link to the footage on YouTube:

Comments: (6)

A Finextra member | 08 May, 2012, 15:22


A great analogy Gary & the A&C sketch is still very funny despite it's age.

Strongly-agree with your point on 'Industry wide STP', this was something that wasl always my nirvana but it's taken the crisis to force the change in mind-set so budget & refocusing to start down that road. Strongly agree that LEI's can play a big-part in that STP nirvana and the potential for leveraging LEI's in other post-trade areas is huge & dare I say it, exciting.

Will leave you with this: I always envisaged that (high-level) MO/Ops/post-trade would eventually end-up as more of an exception based monitoring-role, i.e. the focus is on the trade exceptions that didn't flow. That would trigger remedial action to ensure such exceptions don't nt reoccur. In other words, Ops would be monitoring dashboards for exceptions and action accordingly. Some way-off (if ever!) but certainly more of a realistic possibility in the 'new world' we're in but we need much more in-terms of data-standards across asset-class's & further industry buy-in to achieve that in many post-trade area's too. One example, there is a lack of global data-standards  for OTC's in reporting so we need standard economics across all OTC asset-classes to facilitate STP between all players as well as overseers, thoughts welcomed on that as I see this as a major hurdle which WILL have impact on many areas's of post-trade & crucially. daily collateral mgmt & CSA funding deadlines..

Nb, Keep your blogs coming too, I always enjoy reading them

DP

 

A Finextra member | 08 May, 2012, 15:33

Thanks Darren for your comments. I agree the end game has the ops working on exceptions. Firms often say this is the case today but its not. Its just people dont look at the big picture. This is something that is holding the industry back as the long term is getting lost in daily fire fighting

I agree totally the OTC points and this something i have been trying to highlight to try and get uniformity and dare i say action

I am encouraged by your kind words and be assured the Wright mouth is a long way off being shut

Kathleen Tyson-Quah - Granularity Ltd - London | 10 May, 2012, 17:15

Hi Gary,

The LEI confusion is more confusion the industry didn't need, but it is important to get the principles right.  As I understand it, the supervisors were unhappy with the single issuance point for all LEIs on the planet.  They want multiple issuers but traceable registration to single entities.

The adoption of LEI is complicated by the fact that it isn't a single identifier that will replace all the other standards in the current universe of identifiers.  It will in fact be an additional identifier that will have to be maintained in parallel with all legacy identifiers within almost all current systems and data bases.  As a result, the commercial case for imposing it rather than rationalising the existing sets of indentifiers is not terribly clear.  Big software challenge building the reconciliation and transformation processes.

A Finextra member | 10 May, 2012, 17:30

Yes Kathleen. We are not starting from a blank sheet of paper otherwise it would be so easy. Some form of mapping between existing and new looks probable These maps could be in use for decades until they can be made redundent 

Allan Grody - Financial InterGroup - New York | 23 May, 2012, 04:38

Gentlemen - words like "nirvana" and its equivalent "boiling the ocean" are remnants left over from the can't do crowd. We have regulatory compulsion (or will have if the G20 stays the course) for identifying uniquely, unambiguouusly and universally every financial market participant  (the LEI) and the products they own,trade and process (the UPI). 2-3 million of these, 80 million of those - not very big or troublesome at all! What is troublesome is the thought that it will be just another number - we cannot let that happen. For example we have alreday organized a consortium to tackle the STP problem and to make sure that the transition from multiple and proprietary business entity identifiers is short lived. For example the same federated servers that support the distributed LEI utility in our proposal to the FSB and the CFTC will support mapping software to resove proprietary codes into LEI's and LEI's into proprietary codes - all in the network. See our proposal by clicking on www.ssrn.com/abstract=2016874

 

A Finextra member | 23 May, 2012, 15:20

Hi Alan, thanks for this and i agree with what you say. My aim is to create interest and ideas how LEI can be introduced to gain business benefits. STP on a industry wide scale is miles from here today but i see LEI as an important componant to make it happen

To this end i am doing a LEI CPD event on Monday for the CISI hosted by SWIFT

I dug out an old presentation i did on LEI in 2004 and you know what ? It is still relevant today 

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Latest posts from Gary

Wealth Management - Turkeys Vote for Christmas

27 September 2013  |  2489 views  |  0  |  Recommends 0

The future of systems in financial services

29 July 2013  |  2470 views  |  0  |  Recommends 0

Social media and trust in financial markets

25 June 2013  |  4688 views  |  0  |  Recommends 0

Technology changing the markets

25 June 2013  |  2436 views  |  0  |  Recommends 0

Technology begins to change

14 June 2013  |  1941 views  |  0  |  Recommends 0
name

Gary Wright

job title

Analyst

company name

BISS Research

member since

2007

location

London

Summary profile See full profile »
CEO of B.I.S.S. Research, founder of the BISS Independent Accreditation for all systems and servi...

Gary's expertise

Who is commenting on Gary's posts

Ketharaman Swaminathan
Robert Avery