Industry trade groups working on the development of common reference data codes for straight-through processing of securities are backing the London Stock Exchange's efforts to extend the Sedol numbering system as a viable global option for unique instrument identification.
Unique instrument identification has become a critical requirement to improve the efficiency of securities transactions processing and to meet the automation objectives associated with straight through processing (STP).
In a new white paper, members of the Global Reference Data Coalition (REDAC) and the Reference Data User Group (RDUG) have put their weight behind the LSE's plans, which propose an extension of Sedol using Swift-based market identifier codes (MICs).
"RDUG and REDAC participants believe the LSE proposal meets the criteria for unique instrument identification and is a viable option available to the industry," states the paper.
Members of the groups, which represent a powerful alliance of UK and US securities industry participants, have dismissed proposals by Reuters to extend the front office Reuters Identifier Codes as fraught with competitive and commercial risks.
Other options, such as the modification and extension of Isin data, have also been disregarded for failing to meet the criteria of timeliness.
John Gubert, head of group securities services at HSBC and Chairman of RDUG, comments: "This paper recommends a logical approach to the issue of unique instrument identification and will help bring us all closer to achieving true STP."
Read the full paper: In Search of Unique Instrument Identifier