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Leading financial market messaging standards organizations developed a financial messaging Investment Roadmap to establish one common standard, ISO 20022, while maintaining the existing independent protocols.
Both FIX Protocol (FPL) and Swift are involved in the collaboration, along with International Securities Association for Institutional Trade Communication (ISITC) and Financial Products Markup Language/International Swaps and Derivatives Association (FpML/ISDA)
“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 organizations say.
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.
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.
“The roadmap allows the financial community to better direct its IT infrastructure and helps the standards organizations to improve interoperability between their respective standards”, Karel Engelen, Head of FpML, ISDA said.
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, “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.”