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What is the true value of XBRL?

XML is not new but you would be forgiven for thinking it is, in the financial services industry. Now that ISO20022 is grabbing some attention there is an inevitable growing interest in XML. A few years ago the FSA in the UK started a project to move towards XBRL, one of the many derivatives that have been sporned from the origins of XML.

The project was eventually curtailed by the FSA through reasons best known to them. During this period the benchmarking of the Fujitsu XBRL solution was carried out which clearly demonstrated the terrific potential of XBRL to bring huge efficiencies to regulatory reporting. Later the USA and European Regulators mandated that all markets should begin XBRL regulatory reporting projects. This was great news and sure to accelerate the XBRL value broadly into financial services and open up more ideas on how to increase XML benefits across the industry.

Readers of my blogs will know how enthused I am about XBRL and its potential to electronically organise initial corporate information, bringing a genuine chance of standardising market data and the subsequent cost savings in the data chain. However, one of the obvious prospects for a XML slam dunk would be in the standardising of confirmations in the OTC markets, where an array of XMBL templates could be created describing all types of complex financial instruments. 

It would be a simple exercise to create any number XML based templates per OTC trade. Each trade could have its own unique identifier with a unique issuer code.

But one problem might be the need to indentify who would be the registrar to maintain the directory of issuer's codes and each OTC template. This should be an industry debate and maybe a search and selection exercise with SWIFT and other commercial network suppliers with Thomson Reuters/ Bloomberg possible providers of the solution. The global necessity may rule out the UK Registrars.

Alternatively the registrars function could be by the setting up of a new independent ‘not for profit' organisation which has a committee made of a collaboration of all interested parties.     

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Gary Wright

Gary Wright

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BISS Research

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