The agreement, which centres on the adoption of ISO 15022 XML as an industry standard protocol, will enable the seamless flow of data between the front and back office operations of securities institutions, say the companies.

Under the terms of the agreement, FPL and Swift will actively support the efforts of the ISO Working Group 10, which aims to evolve the current ISO 15022 scheme for securities message types to a single standard, expressed in XML.

The agreement leverages the dominant positions of FPL in the pre-trade/trade domain and Swift in the post-trade domain. Both organisations say they will work to develop mapping documentation to support the industry’s migration to ISO 15022 XML and the coexistence of FIX, ISO 15022 and ISO 15022 XML.

"Achieving interoperability and convergence of standards from the front to back office is an industry prerequisite if higher rates of STP are to be achieved," says Francis Remacle, head of the securities industry division, Swift. "Unless everyone is speaking the same language, communication will be compromised, irrespective of other efforts toward automation."

XML is seen to have a critical role to play in overcoming the communications barriers that exist within the IP environments that the securities industry is now embracing.

"With so many XML initiatives currently underway, there is a real danger that the standard could lead to the sort of divergence or even fragmentation that the industry has for so long battled to curb," says Alan Line, European co-chair of the FIX steering committee and director and head of trading at Foreign & Colonial Management. "We believe that ISO 15022 XML will provide the glue between the pre-trade and post-trade domains. Pursuing a single best-of-breed standard is essential for the industry."

ISO 15022 XML is expected to be available by early 2002.