FISD Online Update

November 2002
 

TABLE OF CONTENTS

MARKET DATA HOLIDAY PARTY DECEMBER 16

FISD’s 6th Annual Market Data Holiday Party is scheduled for December 16 at the New York Mercantile Exchange in NYC. It’s time to forget about industry layoffs, contract negotiations and inventory reconciliation by reconnecting with customers, suppliers and colleagues. Thank you to our event sponsors.

DECEMBER GENERAL MEETING IN NYC

The next FISD General Meeting is scheduled for December 16 at NYMEX in NYC. The schedule and agenda is posted on the web. Topics include industry sizing, reference data, SEDOL extension, BMA portal project, VRXML, market data administration, and MDDL. The Working meetings (billing, MDDL, security identification) will be held on December 17 at the offices of Bloomberg. Final agenda will be posted shortly. No registration fee for FISD members.

December Preliminary Agenda

BILLING AND REPORTING PRIORITIES

One of the primary results from the FISD billing workshop has been the identification of the core issues that represent opportunities for process improvement, automation and standardization. From an industry perspective, these issues as well as their derivatives and extensions are where FISD members will be applying effort. A number of large user firms used the core issues document to establish an incremental action plan for FISD. Staff have used the user priorities as a starting point and are coordinating with the other segments to evaluate the operational issues and obstacles associated with the initial recommendations.

Core Issues to Resolve
User Firm Priorities
Blueprint for Market Data Administration

VRXML STRATEGY DEFINED BY FISD MEMBERS

Discussions about market data billing have gained significant momentum over the past few months. FISD staff have been meeting with members from all segments of the industry. An initial action plan was presented to the membership at a recent meeting (October 23) at Goldman Sachs. There are three core priorities associated with the plan:

(1) The adoption and implementation of VRXML as an industry-standard reporting format including specification management, definition and normalization of the glossary of billing and reporting data elements to enable members to produce, transmit, receive and process reports in VRXML; (2) The establishment of a series of implementation pilots to define the operational implications associated with migration to VRXML. The goal is to assist members with data analysis, data scrubbing, vocabulary mapping, VRXML translation and production deployment; and (3) Evaluation of recommendations designed to ensure that the data passed from system-to-system is consistent. Data consistency is one of the most critical components of reconciliation and is a core objective of this activity.

Full details on the VRXML strategy, a link to the pre-release version of VRXML as well as a complete summary of FISD activities are available on the web.

VRXML Strategy Paper
VRXML Pre-Release Specification

CME EXPLORING ENTERPRISE LICENSE OPTIONS

The Chicago Mercantile Exchange has initiated a dialogue with user firms on the concept of enterprise licenses for both internal and external redistribution of market data. On the internal distribution side, the objectives are about reducing administration, eliminating contractual policy debates, managing financial risk, reducing reporting requirements and addressing the business challenges associated with indirect business structures. On the external distribution side, the objectives are focused more on the development of new markets. FISD is helping organize industry reaction to the CME concepts.

CME Enterprise License Presentation

THE REFERENCE DATA CHALLENGE

The global movement to shorter clearing and settlement cycles has propelled reference data, symbology and unique security identification issues into the forefront of the financial information industry. Reference data is now rightly being viewed as the fuel of STP because it touches virtually every process within user firms. The obvious goal is to ensure that there is a common understanding of all the data attributes and their respective data structures – particularly within security master files. The theory is that if master file data was consistent, there would be less need for manual intervention. Fewer manual operations mean less risk and less expense. A new paper has just been posted to the web site providing a synopsis of these issues and their current status.

Reference Data and Security Identification

LONDON STOCK EXCHANGE TO EXTEND SEDOL

The London Stock Exchange has received internal authorization to extend SEDOL to meet industry requirements for a market level identifier. The next iteration of SEDOL will consist of a seven digit alphanumeric code for global listed securities, linked to ISIN with full corporate action coverage.

Press Release: Exchange to Introduce New Global Numbering System

BUSINESS ENTITY IDENTIFICATION

Industry standard entity identifiers that create precise linkages between legal entities, subsidiaries and investment programs are required to help firms manage portfolio and enterprise-wide risk – and meet new regulatory requirements. TC68/SC4 has assumed the IBEI discussion from SWIFT and is in favor of extending BIC (ISO 9362) to cover business entities of relevance to the securities industry. The issue was discussed at the October SC4 meeting and it is our expectation that SC4 will recommend that ANNA serve as both the repository and maintenance authority.

IBEI Summary

MDDL MOVES FORWARD

FISD has taken a number of strategic steps forward with MDDL. Details on all activities have been published on the MDDL.org website. FISD hired James Hartley in September (from Reuters) to manage the development and implementation of MDDL on a full time basis.

Hartley’s activities are being organized around the following primary activities: (1) normalization of the MDDL vocabulary and integration into 15022 data dictionary, (2) maintenance and modification of the specification including schema diagrams (showing the relationship between the XML elements and MDDL nomenclature), (3) ongoing liaison with other critical XML initiatives within the financial industry, (4) the development of an industry model (common understanding of how the industry processes market data), and (5) applications support. Applications are the key to the next activity for MDDL. Hartley is meeting with user firms about using MDDL for internal applications and interest remains high. The next MDDL working meeting is scheduled for December 17 at Bloomberg.

MDDL 2.0 beta and SchemaDocs
MDDL October Report
MDDL Schema Diagram

MDDL CONFERENCE THIS FEBRUARY

FISD is planning an MDDL applications conference February 25-26 (tentative) in NYC. The conference will focus on overall XML trends affecting the financial industry, the core elements of the MDDL (and XML) business case, and the specifics of the MDDL specification as applied to various types of market data services.FISD is planning a MDDL applications conference February 25-26 (tentative) in NYC. The conference will focus on overall XML trends affecting the financial, the core elements of the MDDL (and XML) business case as well as the specifics of the MDDL specification as applied to various types of market data services.

FISD/SIA COORDINATING ON MARKET DATA INITIATIVES

FISD has been working with the SIA Market Data Subcommittee under the direction of Peter Esler (Bear Stearns) to address issues related to market data management. The SIA Subcommittee provides a meeting ground for the heads of market data from a number of large user firms. FISD has been briefing the Subcommittee on FISD activities and will continue to work with them to ensure that relevant activities (e.g. enterprise licenses, billing/reporting and industry benchmarking) are fully coordinated.

FISD OPERATIONS

Executive Committee Elections: Terms for 14 members (four exchanges, five vendors, five user firms) of the FISD Executive Committee will expire at the end of December. FISD members interested in running for the Executive Committee need to contact Michael Atkin.

FISD Dues Equitability: The SIIA Board has passed a unanimous recommendation by the FISD Business Models Committee to ensure that the dues paid by exchanges, vendors and user firms become more equitable. The move was based on the fact that FISD is a neutral business forum and recognizes that all members (regardless of industry segment) have an equal opportunity to influence and participate in the FISD agenda. SIIA is implementing the new dues structure based on the current membership renewal cycle.

FISD Web Site Now Members-Only: FISD is restricting non-member access to many of the reports, databases and working documents on the FISD website. FISD is a membership organization and the activities of the Associations are for the benefits of our members. In addition to the access restrictions, FISD has improved navigation and contact info functionality and will be making more detailed reports on activities available to the membership. For more information and help with login procedures, please contact Tom Andresen.