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A couple of reflections on the 25th ISITC Annual Operations Summit

The ISITC Annual Operations Summit, held in Boston on March 24-27 2019, was focused on data disruption impacting the securities industry. Many interesting topics were discussed but I would like to focus on a couple of ones that caught my attention since they were discussed in many of the sessions.

Data abstraction and simplification
In many sessions the topic of data abstraction came up. The idea of having a mechanism to abstract the data required for exchanging with other firms involved in the trade life cycle. Current data standards such as FpML, FIX, and ISO 20022 cover a very wide range of products and processes. For some of the asset managers and custodians, only a subset of this data would be needed. On the other hand, firms are using different data formats and syntaxes to send and process this data. Both of these streams converge into the idea of having some common mechanism to abstract the required data from the actual syntaxes being used in the messaging implementation. The ISITC Derivatives and Reference Data working groups are progressing through this idea and it would be very interesting to see the end results. In addition, the data abstraction combined with mappings to specific syntaxes will be a powerful artefact to simplify data processing.

At the standards front, organizations such as FpML and FIX are working on the same direction through simplifying some of the data models they have. Karel Engelen (ISDA) explained that FpML has published a simplified reporting model in version 5.11.

Equity Derivatives
The lack of a central service provider for confirming equity derivatives combined with the fact the asset class lacks standardization on the product representation at the front office systems makes data integration really difficult for participants. At the ISITC Derivatives Working Group update it was clear that there is a lot of room for improvement in the current data models for these products.

APIs
Stephen Lindsay, Head of Standards at SWIFT, gave a very interesting presentation on the API based solution they are developing. There seems to be a clear appetite on the industry to use API based services that deliver value to the data chain. The use of data standards is critical to facilitate the interoperability between services and SWIFT is focusing on delivering ISO 20022 based APIs. The more some of these services become decentralised, the more the need to use common standards for accessing the APIs. Otherwise integration costs will raise exponentially.

John Plansky, Executive VP at State Street, gave an overview of the technology trends to watch and number was Clouds and Microservices, number two being Front to Middle Connectivity, then DLT, and finally Cognitive and Deep Learning.

If we combine APIs with cloud and the progress on continous integration, the result is very powerful.

This goes in line with TradeHeader's strategy on developing API services using open data standards such as FpML, FIX, and ISO 20022 and deploying them on the cloud. Our recent work partnering with ISDA on the FpML to ISIN JSON Generator and the FpML to JSON Converter are good examples of API based services using open standards for communication.


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Marc Gratacos

Marc Gratacos

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