The vision of a unified standard in the financial world took a giant leap forward at the first 2006 meeting of the ISO 20022 Registration Management Group (RMG) recently in Berlin.
Accomplishments for the first year of operation were reviewed, including:
- The creation of the RMG itself with about 50 senior managers from 17 countries and 9 international organizations;
- The creation of the first two Standards Evaluation Groups (SEGs) for Payments and Securities, involving 70 industry experts who represent the various communities of users;
- The approval by the RMG of 13 projects for development of candidate UNIFI (UNIversal Financial Industry message scheme – the "nickname" for ISO20022) message sets; and
- The review by the SEGs and the approval and publication of the first UNIFI messages in both payments and securities market areas (4 messages for payment initiation and 45 messages for investment funds distribution).
At the meeting, representatives from 12 countries and 6 international organisations reviewed the work pending at both the Payments SEG and the Securities SEG where there are more than 100 candidate messages in various stages of registration and final publication. Discussion also covered several proposals for new message development, including a submission by ISITC for a total net asset value statement that would cover multiple asset classes, a submission by ACBI in Italy related to invoice financing and a submission by CLS in the foreign exchange market sector.
"The detailed message standards work is done in the Standards Evaluation Groups," said Arthur Cousins, Director of Strategy and Product Development, The Standard Bank of South Africa, and the South African representative to the RMG. "The Securities SEG will shortly be validating the pre-trade/trade candidate messages which were developed by SWIFT, although initially proposed jointly by SWIFT and FIX. The Payments SEG will focus their attention on several sets of messages in the payments and cash management areas, including messages expected to be adopted by European countries as part of SEPA."
Cooperation on ISO 20022 was further reinforced by a new commitment on the parts of several international organisations to the modeling methodology and the central repository/dictionary. Their active participation on Working Group 4 (WG4) will also be vital to the technical evolution of UNIFI. WG4 is the group created by ISO late last year to work on the technical specifications around the UNIFI standard. It was felt that, once WG4's work was completed, technical differences would begin to disappear and a true harmonisation of the differing syntaxes could be foreseen.
"FpML, through the International Swaps and Derivatives Association (ISDA), is an active participant in WG4, where we address concerns FpML has with the ISO 20022 design rules," said Karel Engelen, ISDA's policy director and head of FpML. "These concerns, in our view, do not allow proper coverage of complex over-the-counter derivative transactions in the current form of ISO 20022. We are confident that WG4 will be able to find a solution for these issues and ultimately lead to a better standard for the financial industry. We and others have raised issues before and the proper way to address them in the ISO process was by forming a new working group: WG4."
The RMG also discussed how best to collaborate with other industry domains to ensure that financial requirements are appropriately addressed and included in their work. As global standards evolve at a rapid pace, collaboration and cooperation across industries and domains will remain critical to the successful implementation of new messages.