The Society for Worldwide Financial Telecommunication has prepared short-term contingency plans that both support and penalise institutions failing to meet the November 2002 deadline for migration to the new ISO 15022 securities message standard.
While insisting that the deadline will be implemented on schedule, the interbank messaging outfit has prepared a six-month contingency to run old ISO 7775 messages in parallel to the new standard through a closed message user group. Users not ready would be charged until they become ISO 15022-compliant, says Swift.
The migration to ISO 15022 will bring benefits in improved automation, reduced operational costs and increased operational risk mitigation. However, for these benefits to be achieved, Swift needs to ensure that the entire industry is ready to meet the deadline and use the new standard appropriately. Anecdotal evidence suggests that some institutions have been unprepared to invest the six-figure sums required to achieve compliance, while others have delayed their efforts until the last possible minute.
Alarmed at the slow progress, Swift has in recent months accelerated efforts to support customer take-up and talk up the benefits of the move. The interbank co-operative says that users representing 90 per cent of traffic are sending either live and/or test messages and that the current status of the migration indicates an increasing upward trend in terms of adoption. Of the total traffic to be migrated, 26 per cent of live traffic is now being sent in ISO 15022, up from 12 percent in March. As of 5 June 2002, an average of 0.54 million ISO 15022 messages are being sent per day out of 2.08 million securities messages to be migrated.
Swift says that the six-month contingency is intended to safeguard existing STP levels and encourage completion of the migration as quickly as possible.
Penalties for laggards are likely to be severe. In a statement, Swift warns: "Charges would be significant and would increase throughout the time the closed message user group is in use."