ISDA®
INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC
NEWS RELEASE
For Immediate
Release Monday, May 5, 2008
For More Information, Please Contact:
FpML/ISDA, FPL, ISITC and SWIFT Develop Messaging
Investment Roadmap
The Roadmap is designed to provide
market participants a consistent and clear direction with regards to
messaging standards usage by visually mapping the industry standard protocols –
FIX, ISO, and FpML – to the appropriate business
processes across the major asset classes.
The Investment Roadmap also defines
an agreed path for future initiatives by identifying gaps as well as areas that
may overlap. The most important aspect surrounding standards interoperability
is focusing on the ‘peering,’ or transition points at which a user may shift
from using one standard to another. This
will result in higher levels of interoperability for the financial services
community and will save firms the cost of maintaining multiple syntaxes within
the same area of the transaction lifecycle for the same asset classes.
Thanks to the Investment Roadmap,
the standards organizations are closer to ensure that all the relevant data is
delivered to the next stage of the transaction chain.
Historically, industry uncertainty around
messaging standards to use has led to large amounts of duplication of technical
investment. The collaboration is aimed at producing a consistent direction for
financial services messaging standards and communicating that clearly. Over the
longer term this collaboration should lead to the standards needed by the
financial services industry if it is ever to successfully streamline its
processes, automate and save consumers money.
“This is the first time the major financial
standards organizations have come together to map out the different asset
classes and parts of the trade lifecycle they each focus on,“ said Karel
Engelen, Head of FpML, ISDA. “The roadmap allows the
financial community to better direct its IT infrastructure and helps the
standards organizations to improve interoperability between their respective
standards.”
Commenting on this initiative Scott
Atwell of American Century Investments, Co-Chair FPL Global Steering Committee,
stated, “It
is clear that the FIX Protocol is the de
facto standard for pre-trade and trading, that FpML
is the de facto standard for OTC
Derivatives, and that ISO is the de facto
standard for settlement. We need an
approach that leverages these standards into a broader framework without
reinventing and creating redundant messages that increase implementation costs
and cause confusion for the industry.”
Jamie Shay, Head of Standards, SWIFT, commented,
“The great news is that standardization organizations are working together to
ensure some level of interoperability.
Most financial practitioners now recognize the challenges associated
with multiple standards and are not looking to create additional standards to
represent financial transactions in a new way.
The financial community is able to deal more effectively with the
existence of multiple standards due to the availability of tools that enable
interoperability.”
Genevy Dimitrion
of State Street Corporation, Chair of ISITC, added, “ISITC’s
main goal as an organization is to develop and promote market practice and
shared standards in the global securities industry in order to help reduce
inefficiencies, and we were delighted to be a part of this important effort and
provide a neutral perspective.
Collaboratively, we need to ensure that we are providing a consistent
direction to all participants on the appropriate message standards to be used
throughout the trade lifecycle and that is exactly what this exercise has
accomplished.”
About FpML
FpML (Financial products Markup Language) is
the freely licensed business information exchange standard for electronic
dealing and processing of privately negotiated derivatives and structured
products. It establishes the industry protocol for sharing information on,
and dealing in, financial derivatives and structured products over the Internet.
It is based on XML (Extensible Markup Language), the standard meta-language
for describing data shared between applications. The standard is developed
under the auspices of ISDA, using the ISDA derivatives documentation as the
basis. For more information, please visit www.fpml.org.
About ISDA
ISDA, which
represents participants in the privately negotiated derivatives industry,
is the largest global financial trade association, by number of member firms.
ISDA was chartered in 1985, and today has over 825 member institutions from
56 countries on six continents. These members include most of the world's
major institutions that deal in privately negotiated derivatives, as well
as many of the businesses, governmental entities and other end users that
rely on over-the-counter derivatives to manage efficiently the financial market
risks inherent in their core economic activities. Information about ISDA and
its activities is available on the Association's web site: www.isda.org.
About FIX
Protocol Ltd
FIX Protocol Ltd is a non-profit organization
that owns the intellectual property rights of the Financial Information eXchange
Protocol (FIX), which is available free of charge from the FPL website, subject
to FPL’s copyright and acceptable use policy. FIX is a globally-recognized
messaging standard enabling the electronic communication of pre-trade and
trade messages between financial institutions, primarily investment managers,
broker-dealers, ECNs and exchanges. For more information, see www.fixprotocol.org.
About ISITC
ISITC is an industry association that collaborates to develop and promote
market practice and shared standards in the global securities industry in
order to reduce inefficiencies, lower risk, and build shareholder value.
For
more information, please visit www.isitc.org.
About SWIFT
SWIFT is the industry-owned co-operative
supplying secure, standardised messaging services and
interface software to over 8,100 financial institutions in 208 countries and
territories. SWIFT members include banks, broker-dealers and investment
managers. The broader SWIFT community also encompasses corporates
as well as market infrastructures in payments, securities, treasury and trade.
Over the past ten years, SWIFT message prices have been reduced over 80%, and
system availability approaches 5x9 reliability — 99.999% of uptime.
®ISDA is a registered trademark of the
International Swaps & Derivatives Association, Inc.