INVESTMENT ROADMAP – FREQUENTLY ASKED QUESTIONS
Table of Contents
What is the motivation and purpose of this investment roadmap collaboration between the
Standards Coordination Group members (FpML, FIX, SWIFT, ISITC, FISD, and XBRL)? ...... 1
What is the overall role of each of the standard bodies / organizations involved in this
collaboration? ................................................................................................................................ 2
How is the investment roadmap organized? .............................................................................. 3
What are the definitions for each of the functions as well as the sub functions in the detail
slides? ............................................................................................................................................ 4
Issuer – Pre-Investment Decision ............................................................................................ 4
Front Office - Pre-Trade ............................................................................................................ 4
Front Office - Trade ................................................................................................................... 5
Middle Office - Post-Trade ........................................................................................................ 5
Middle Office - Clearing / Pre-Settlement................................................................................ 6
Back Office - Asset Servicing .................................................................................................. 6
Back Office – Reconciliation .................................................................................................... 7
Back Office - Collateral Management ...................................................................................... 7
Back Office - Settlement ........................................................................................................... 7
Back Office - Pricing, Risk and Reporting .............................................................................. 8
Investor Supervision – Regulatory Reporting ........................................................................ 8
Why is there usage of multiple standards in some of the cells? ............................................. 9
Why is FIX and ISO represented in the Post-Trade space for Cash Equities, Fixed
Income, Forex and Listed Derivatives? .................................................................................. 9
Why is FIX and ISO represented in the Clearing / Pre-Settlement space for Listed
Derivatives? ............................................................................................................................... 9
Why is ISO and XBRL represented in the Asset Servicing space for Cash Equities &
Fixed Income and Funds? ...................................................................................................... 10
Why is FIX and ISO represented in the Collateral Management space for Cash Equities &
Fixed Income and Listed Derivatives and FpML and ISO for OTC Derivatives? .............. 10
Why is FpML, ISO and XBRL represented in the Pricing / Risk / Reporting space for
Cash Equities & Fixed Income and Funds and FpML and ISO for Forex, Listed
Derivatives and OTC Derivatives? ......................................................................................... 11
Why is FIX and ISO represented in the Investor Supervision – Regulatory Reporting
space for Cash Equities & Fixed Income, Forex and Listed Derivatives? ........................ 11
What is the plan going forward? ................................................................................................ 11
1. What is the motivation and purpose of this investment roadmap collaboration between
the Standards Coordination Group members (FpML, FIX, SWIFT, ISITC, FISD, and
XBRL)?
Because the financial community is a vast one, encompassing institutions across the globe that
deal with diverse asset classes, different organizations have traditionally been responsible for
developing their own messaging schemes. Today, financial firms often combine a great range of
trading activities. Therefore, the messaging standards from different organizations often
intersect, but remain incompatible.
Investment Roadmap FAQ November 2018
2
Within the financial services industry, there are multiple standards being used, hence the desire
to ensure some level of interoperability. 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 and includes these
standards into a broader framework without reinventing and creating redundant messages that
increase implementation costs and cause confusion for the industry.
This collaboration affirms the commitment of each organization to the ISO 20022 standard by
laying the groundwork for defining a common underlying financial model. The model allows for
20022 based messages to be created to support the business processes, while at the same time
provides in certain circumstances for existing independent protocols to be maintained in order to
protect the investments of market participants.
The purpose of the collaboration between these organizations is to produce a consistent direction
for financial services messaging standards and communicate that direction clearly. This will allow
the industry to spend its money more wisely.
2. What is the overall role of each of the standard bodies / organizations involved in this
collaboration?
FISD
The Financial Information Services Division (FISD) of the Software and Information Industry
Association (SIIA) is a global neutral forum that has been serving the financial information
industry for more than 20 years. FISD is comprised of 140 member companies that recognize
that market data distribution and efficient trade execution require a high level of consistent and
predictable service - all of which are dependent on the close cooperation of many independent
organizations and systems, which is why industry stakeholders support FISD as the forum of
choice to identify and resolve the business and technical issues that affect the administration,
distribution and utilization of market data. For more information, see www.fisd.net.
FPL
FIX Protocol Limited (FPL) is the not-for-profit industry association that owns, develops and
promotes the FIX Protocol messaging standard. Nearly 250 firms from across the global buy-side,
sell-side, exchange/ATS/MTF, regulatory, association and service provider communities are
members of FPL. The Financial Information eXchange ("FIX") Protocol is the de-facto messaging
standard for pre-trade and trade communication globally. Having achieved significant levels of
adoption within the Equity markets, it is now experiencing horizontal expansion across the
Derivatives, Foreign Exchange and Fixed Income markets. Further to this, it has expanded
vertically into the post trade space, supporting Straight-Through-Processing (STP) from
Indication-of-Interest (IOI) to Allocations, Confirmations, and Regulatory and other reporting. For
more information, see www.fixprotocol.org.
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.
ISITC
ISITC (International Securities Association for Institutional Trade Communication) is a non-profit
industry group in which securities market participants (broker/dealers, investment fund managers,
banks, market infrastructures and vendors) collaborate to develop common approaches for
Investment Roadmap FAQ November 2018
3
communication to process financial transactions (for example, buying and selling securities.) This
collaboration includes defining how the adoption and use of industry-wide standards and
consistent data can facilitate this communication. For more information, please visit
www.isitc.org.
SWIFT
SWIFT is a member-owned cooperative that provides the communications platform, products and
services to connect over 9,000 banking organizations, securities institutions and corporate
customers in 209 countries. SWIFT enables its users to exchange automated, standardized
financial information securely and reliably, thereby lowering costs, reducing operation risk and
eliminating operational inefficiencies. SWIFT brings the financial community together to work
collaboratively to shape market practice, define standards and debate issues of mutual interest.
SWIFT is also a recognized leader in the area of financial message standards and is the
Registration Authority for the ISO 20022 standard, the agreed methodology used by the financial
industry to create consistent message standards. These standards and their related messages
cover all financial market transactions including payments, cash management, foreign exchange,
loans, securities, collateral, derivatives and trade finance. For more information, please visit
www.swift.com.
XBRL US
XBRL US is the independent non-profit consortium for XML business reporting standards such as
XBRL, a "tagging" language that standardizes financial statements in a way that makes them
accurate, consistent and comparable. All publicly traded companies are required by new SEC
rules to tag their 10-K and 10-Q filings using a digital XBRL dictionary (also called a taxonomy)
based on US GAAP accounting standards. For more information, please visit www.xbrl.us.
3. How is the investment roadmap organized?
The Investment Roadmap is broken down into a grid by two types of criteria – functional category
areas (vertical axis) and asset classes (horizontal axis). The map is color coded for each
messaging standard (blue for FIX, green for ISO, yellow for FpML and orange for XBRL), or
combination thereof. For example, FIX is a recognized standard for the pre-trade area in
equities; therefore the corresponding cell in the Roadmap grid is colored blue.
Prior to being able to allocate specific business functions to messaging protocols / standards
within asset classes, it is necessary to first define the specific functional categories and the
specific functions within them. The functional category tables that follow the next few pages aim
to provide clarification on the specific functional categories and their sub-categories. The
functional categories which are defined are:
Issuer:
o Pre-Investment Decision
Front Office
o Pre-Trade
o Trade
Middle Office
o Post-Trade
o Clearing/Pre-Settlement
Back Office
o Asset Servicing
o Collateral Management
o Settlement
o Pricing/Risk/Reporting
Investor Supervision:
o Regulatory Reporting
Investment Roadmap FAQ November 2018
4
Issuer Supervision:
o Regulatory Reporting
The table below reflects the asset classes that have been identified for inclusion in the investment
roadmap. Any asset class notations have been included below each of the functional category
tables.
Asset class
Description
Equities &
Fixed Income
Equities - Common and preferred stock, large and small
cap stock, rights, warrants, etc.
Fixed Income - Government and corporate debt, agency
issues, floaters, callable/puttable bonds, zero coupons,
convertibles, bank loans, ABS, MBS, CDO’s, revolving
credit, CMO’s, CBO’s, CLO’s, etc.
Foreign Exchange
FX Swaps, FX Forwards, NDF’s, FX Options, FX hedge,
etc.
Listed Derivatives
Equity options, IRS, etc.
OTC Derivatives
Derivative contracts off exchange on the different asset
classes:
- Interest rate
- equities
- credit (fixed income)
- commodities (physical and financial)
- FX
- Real estate
Funds
Corporate Pensions, mutual funds, hedge funds,
investment funds, trust funds, ETF’s, insurance funds,
supra-national funds, collective investment funds, etc.
4. What are the definitions for each of the functions as well as the sub functions in the
detail slides?
Issuer – Pre-Investment Decision
This covers the information from the issuer to Edgar, etc. which is used by the analysts in making
their investment decision.
Sub-function
Description
Filing Fundamental Data with the
Regulator
An Issuer reports financial statement data that describes the
economic fundamentals of the investment. This data can then be
processed by automated processes that enhance the accuracy and
speed of investment decisions.
Analytical Models
Fundamental evaluation frameworks define evaluation metrics
whose value is derived from financial statement data. i.e. Free Cash
Flow from Operations, etc.
Front Office - Pre-Trade
Pre-Trade covers all activity which occurs prior to a trade. Examples of pre-trade activity are
indications of interest (IOI), trade advertisements, quotes and market data (in support of trade
through post-trade functions, i.e. market data dissemination, instrument identifiers, descriptive
data, attributes, rates, codes and contact data, etc.).
Sub-function
Description
Indications of Interest (IOIs)
A buyer or seller communicating to others an interest in finding the
opposite side to a trade. For equities, this typically is a broker
Investment Roadmap FAQ November 2018
5
communicating to its customers while representing another
customer's order.
Trade advertisements
An executing party (broker) publicly disclosing that (when and how
much) they have executed large block trades in an effort to publicize
their role and volume in a particular security.
Quotes
The bid or ask quotes are the most current prices and quantities at
which the shares can be bought or sold. The bid quote shows the
price and quantity at which a current buyer is willing to purchase the
shares, while the ask shows what a current participant is willing to
sell the shares for.
Market Data
Refers to numerical price data, reported from trading venues, such
as stock exchanges. The price data is attached to a ticker symbol
and additional data about the trade.
Short Sale Locate
Location of stock prior to the execution of short sale.
Reference Data
Includes securities reference data (instrument identifiers, descriptive
data, attributes, rates / codes, calendars and taxes), entity reference
data (counterparty data, entity identifiers, client data, contact data)
and ancillary reference data (location of trading).
Front Office - Trade
The trade area includes the order and execution processes, including order management, order
routing and trade execution.
Sub-function
Description
Order Routing
Order routing and execution for single instruments and multi-leg
instruments; crossing order routing and execution; and basket and
list order processing.
Trade Execution
The process in which a trade is executed. The trade may be a
single, multi-leg, cross, basket, list, etc.
Trade Date Position Reporting
Management of traded and tradable positions on trade date.
Reference Data
Client data, credit profiles, account numbers, commission rates,
place of trade, etc.
Middle Office - Post-Trade
Post-trade covers all activity after execution up until clearing and pre-settlement begins.
SUB-FUNCTION
DESCRIPTION
Trade Capture & Validations
The process in which trades (block and or allocations) are
captured by a central counterparty or locally, for purposes of
trade matching and confirmation.
Allocation
Allocation of trades from both two and three party models.
Matching
Trade and allocation level matching. May be performed locally
(two party) or centrally (three party). Matching may occur prior
to and also after allocation.
Confirmation/Affirmation
The process of confirming and affirming trades executed.
Position Management
Affects start of day positions, positions created through trading
activity, deliveries, transfers, and end of day position
management. Depending on the type, position may be
liquidated, adjusted, exercised, and marked to the market.
Novation/Assignment Process (OTC
Derivatives Post Trade Processing)
The full or partial transfer of the rights and obligations defined
by an OTC derivative contract to other consenting counterpart.
A fee may be payable between the parties (actual payments
are part of the settlement function) to account for the contract
value. The novated and remaining contracts maybe
subsequently confirmed (see confirmation sub-function). Note:
Investment Roadmap FAQ November 2018
6
FpML uses FIX messages to carry FpML data (trade
messages).
Amendments / Modifications (OTC
Derivatives Post Trade Processing)
The process by which one or several economic parameters in
an OTC contract is changed. The process typically includes a
confirmation part (see confirmation sub-function) and fee
payments between the parties (actual payments are part of the
settlement function), to account for the change in the contract
value.
Termination (OTC Derivatives Post
Trade Processing)
The full or partial reduction of the notional amount or number of
options defined in an OTC derivatives contract prior to the
scheduled termination date (swaps) or the last exercise date
(options); the process typically involves a confirmation part
(see confirmation sub-function) and fee payments between the
parties. Note: FpML uses FIX messages to carry FpML data
(trade messages).
Increases (OTC Derivatives Post Trade
Processing)
Process by which the notional amount or number of options of
an OTC contract increases.
Affirmation (OTC Derivatives Post Trade
Processing)
Exercise (OTC Derivatives Post Trade
Processing)
The full or partial exercise of an option.
Middle Office - Clearing / Pre-Settlement
This denotes all activities from the time confirmation is made for a transaction until settlement
begins. In theory, this includes the management of post-trading, pre-settlement credit exposure,
ensuring trades are settled in accordance with market rules.
It is important to note that clearing may occur either bi-laterally or through a central party.
SUB-FUNCTION
DESCRIPTION
Matching
The process of “pre-matching” in order to alleviate issues (fails) in
the settlement process, prior to instruction of settlement.
Netting
The process of netting trading obligations (cash, securities or other),
with a goal to reduce the number of settlement transactions.
Funding
The process in which a party, individual corporate or central
counterparty is responsible for ensuring that trades are properly
funded, prior to settlement process initiating.
Reference Data
Settlement location, clearing account numbers, CSD identifiers, etc.
Back Office - Asset Servicing
Administration activities performed for others, e.g. processing of corporate actions, tax reclaims
and portfolio valuation.
SUB-FUNCTION
DESCRIPTION
Issuance
The process in which securities are created/issued. Also referred to
as underwriting. Includes the IPO process and activities of the
agent, registrar, transfer agent, etc
Corporate Actions
An event issued by a company that effects the securities issued by
the company, ie, dividends, stock splits, coupon payments, factor
updates, etc.
Proxy Voting
The process of voting by members or shareholders and the related
management of this process.
Securities Lending
Transfer of ownership of securities from the lender to the borrower
for a specified period of time against fees. The transfer of ownership
Investment Roadmap FAQ November 2018
7
of the securities is not a sale. The borrower assumes all rights of
ownership and receives interest, dividend, bonus, rights and any
other corporate actions due from the securities, but is obliged to pay
these to the lender (original owner).
Back Office – Reconciliation (Note: this is not in the roadmap)
The process of reconciling with counterparties details of some or all transaction data such as
positions or cash flows.
SUB-FUNCTION
DESCRIPTION
Portfolio Reconciliation
Automated process for reconciling with counterparties
details of some or all of the positions outstanding between them. A
position includes the transaction details and may include valuation
information as well. The need to reconcile portfolios may be met
either through bilateral arrangements or through the use of vendors
providing centralised matching services.
Cash Flow Matching
Automated process for reconciling with counterparties details of
some or all of the pre-settlement OTC Derivatives cash flows
between them. A pre-settlement cash flow may include its
calculation details to facilitate its reconciliation.
Back Office - Collateral Management
The process used to control counterparty assets against the exposure calculated as part of the
risk management process. Management of risk via collateral, margin, positions, voting rights, etc.
This includes repo collateral management associated positions resulting from trading activities -
includes assignments, substitutions, inquiries, and request of collateral.
SUB-FUNCTION
DESCRIPTION
Initial Margining
The process of assessing the risk of a position based on volatility
and market conditions, calculating a performance bond based on
these factors, and comparing the requirement to the assets that are
currently on deposit. A margin requirement that is greater than what
is on deposit is referred to as a margin deficit. A margin
requirement that is less than what is on deposit is referred to as a
margin surplus. The clearing house is responsible for collecting
more collateral in the case of a deficit.
Margin Call
End to end process of collateral call, including collateral call
issuance, collateral call issuance responses, collateral assignment
and responses to proposed collateral assignment, and notification
of collateral to be moved. It also includes dispute resolution in case
of rejection of collateral call.
Substitution
End to end process from initial request for a collateral substitution
and expected responses.
Recall
End to end process from initial request for a collateral recall and
expected responses.
Transfer
The process of requesting the transfer of collateral between clearing
member sub-accounts
Interest Payment
Process that support the interest payment notifications and the
dispute resolution in case there is no matching of the notifications.
Back Office - Settlement
Settlement can be simply defined as the actual exchange of obligations (cash, securities, others).
Settlement is the next step in the trade lifecycle after clearing / pre-settlement.
Investment Roadmap FAQ November 2018
8
SUB-FUNCTION
DESCRIPTION
Pre-advisement
The process whereby a party prevents its transactions from settling
on a temporary basis. This can be, for example, for pre-matching
purposes without committing for settlement.
Settlement Notification
The process in which a trading party, ie, an investment manager,
notifies, or instructs, their settlement agent of settlement instructions
for a trade.
Settlement
The process in which obligations are settled between counterparties
to fulfill contractual obligations of a trade. The settlement process
includes the process of pre-settlement matching, in that settlement
instructions are matched prior to actual settlement being initiated in
the local market.
The settlement process includes settlements of financial
instruments, physical or non physical and the cash payments.
Transaction Management
The process in which transactions related to settlement are
managed. The process includes advice of settlement status,
pending transactions, allegements, intra-position instructions, etc.
The transaction management process also includes the
reconcilement of settlement transactions.
Fail and Claim Management
The process in which failed trades and their associated claims are
tracked, communicated and reconciled.
Back Office - Pricing, Risk and Reporting
Pricing, Risk and Reporting covers all processes across products related to the pricing and
valuation of securities and derivatives, series of risk measures (or values), and all types of
reporting including position management and regulatory reporting.
SUB-FUNCTION
DESCRIPTION
Tax Management
Tax Payments, reclaims, repatriations, etc.
Income Collection
The process in which income due on an investment or otherwise, is
tracked, collected and paid to an account.
Risk Management
The process of monitoring and controlling the financial exposure
created by a collection of financial obligations with respect to
fluctuating risk factors (e.g. market price, credit worthiness, etc).
Pricing & Valuation
The determination of a financial instrument’s ‘fair value’ by
theoretically valuing the current and future financial behaviour.
Financial measures other than just price/NPV may also be
calculated such as the ‘greeks’ for derivatives or duration/convexity
for fixed income products. Valuations are in general considered for
books and records, not for trading.
Reporting
The process of reporting on transactions, positions, currency
accounts, etc. The reporting process includes general ledger and
accounting statements.
Position Management
The process in which positions (interests) in financial instruments
are managed by an account servicing institution on behalf of an
account owner.
Investor Supervision – Regulatory Reporting
This includes the functions listed below.
Sub-function
Description
Short Sale Reporting
The practice of selling assets, usually securities, that have been
borrowed from a third party (usually a broker) with the intention of
buying identical assets back at a later date to return to the lender.
Investment Roadmap FAQ November 2018
9
The short seller hopes to profit from a decline in the price of the
assets between the sale and the repurchase, as the seller will pay
less to buy the assets than the seller received on selling them.
Conversely, the short seller will incur a loss if the price of the assets
rises. Other costs of shorting may include a fee for borrowing the
assets and payment of any dividends paid on the borrowed assets.
Shorting and going short also refer to entering into any derivative or
other contract under which the investor profits from a fall in the
value of an asset.
Trade Surveillance Reporting
Designed to assist with surveillance and investigations of member
firms by regulators and exchanges for potential violations of federal
securities laws and related rules.
Position Management Reporting
Affects start of day positions, positions created through trading
activity, deliveries, transfers, and end of day position management.
Depending on the type, position may be liquidated, adjusted,
exercised, and marked to the market.
Tax Lot Reporting
The process of reporting (from custodian to authorities) or
transporting tax lot information (from custodian to custodian). Tax
lots can be defined as a breakdown of position per historical
purchase.
Issuer Supervision – Regulatory Reporting
This includes short interest reporting for example.
Sub-function
Description
Short Interest Reporting
Reporting short positions to the regulator including the value and
details of the short positions held.
Financial Statement Reporting
Reporting of financial statement information such as a 10Q or 10K.
Investment Reporting
Reporting investment positions to the regulator including the value
and details of the investments held.
5. Why is there usage of multiple standards in some of the cells?
The goal in supporting this redundancy at the message syntax level is to create an environment
where users predominately using one of the syntaxes, do not have to adopt an additional
standard and the resulting infrastructure costs for a subset of business processes. The ultimate
success in terms of improving efficiencies and driving out costs will come from the commitment
by these roadmap participants in creating a single model from which the various messaging
syntaxes and supporting technologies can be derived.
a) Why is FIX and ISO represented in the Post-Trade space for Cash Equities, Fixed
Income, Forex and Listed Derivatives?
For buy-side to sell-side, whether post-trade will be FIX or ISO largely depends on who within the
buy-side firm is driving STP (Straight Through Processing) initiatives. If the initiative is driven by
the front-office they will likely already have an investment in FIX and it will be easier to implement
post-trade functions via FIX. If the initiative is driven by the back-office (as is the case with some
investment managers) they will likely be using ISO 15022 and eventually ISO 20022, making it
less expensive to automate post-trade using ISO messaging.
b) Why is FIX and ISO represented in the Clearing / Pre-Settlement space for Listed
Derivatives?
Investment Roadmap FAQ November 2018
10
FIX has been used in the clearing space for listed derivatives for a number of years by US based
exchanges and clearinghouses. FIX is increasingly being adopted by other non-US exchanges
and clearinghouses for clearing in listed derivatives due to FPL's collaboration with FIA/FOA.
ISO has been used in Europe and in the US between trading parties or their customers and
clearing members to communicate deals mostly for accounting purposes but also for give up,
take up and other derivative related process notifications. A SMPG market practice has been
defined with the support of ISITC to clarify the usage of ISO standards in that field. ISO 20022
messages are also currently being developed for communication between clearing members and
CCPs. ISO support also exists for communication between exchanges and CCPs.
The choice between FIX and ISO will be driven the same way than for Post-trade, that is,
depending on who will be driving STP initiatives.
c) Why is ISO and XBRL represented in the Asset Servicing space for Cash Equities &
Fixed Income and Funds?
XBRL has aligned with the ISO 20022 standard in the Asset Servicing space by developing
a Corporate Actions taxonomy. The Concepts (the XBRL term for data elements) used in the
taxonomy are based on the elements available in ISO 20022 common model and corporate
action messages. The corporate actions taxonomy is composed of roughly 200 concepts covering
over 40 different actions. Each separate action may use 20-40 of these concepts.
A unique identifier, equivalent to the ISO official corporate actions event reference, also is
included in the taxonomy so that each corporate action can be more easily tracked by
intermediaries and investors alike. For each corporate actions event tagged using XBRL, a style
sheet (XSLT) will be made publicly available to execute message conversion (rearrange
elements) from an XBRL instance to create an ISO 20022 Corporate Action Notification message
in a matter of seconds.
The first implementation of the taxonomy will be in the US based on a pilot among DTCC (the
US central securities depository), SWIFT and XBRL US as the initial implementation of ISO
20022 corporate actions messages for the US market.
d) Why is FIX and ISO represented in the Collateral Management space for Cash Equities
& Fixed Income and Listed Derivatives and FpML and ISO for OTC Derivatives?
The FIX standard has support for collateral management, used in the market primarily for listed
derivatives. Similarly, ISO 15022 also has some coverage for collateral management but with
very limited adoption.
In response to a recent Fed-Letter commitment by the major dealers to improve levels of
automation around OTC related collateral, the Standards Coordination Group decided that the
industry would be best served by a common underlying ISO 20022 model for collateral
management covering a wide range of exposure types. SWIFT, FIX, FpML, and ISITC
collaborated to create this model.
From a syntax perspective, ISO 20022 XML, FIX, and FpML will co-exist.
a. The FIX collateral management messages will be mapped into the model and,
following completion of what is required by ISO 20022, will become ISO 20022
compliant using a domain specific syntax.
b. ISDA/FpML will build messages in FpML syntax based on the model specifically for
the OTC derivatives community.
Investment Roadmap FAQ November 2018
11
c. The ISO 20022 XML syntax is broadly defined to cover all exposure types, and so
can be used for collateral relating to OTC products, repos, securities lending, and
others.
e) Why is FpML and ISO represented in the Pricing / Risk / Reporting space for Cash
Equities & Fixed Income, Forex, Listed Derivatives, OTC Derivatives and Funds?
FpML has coverage for pricing, risk, and reporting definitions for Forex, Listed Derivatives and
OTC Derivatives including valuation reporting, market data (Yield Curves, FX spot rates), and
Market risk reporting (Delta Risk vs. Curve Inputs, FX exposures) for trades. There is also
support for position and activity reporting.
Part of this coverage also exists in ISO. It includes, among others, tri-party and bilateral valuation
reporting, position and activity reporting,
f) Why is FIX and ISO represented in the Investor Supervision – Regulatory Reporting
space for Cash Equities & Fixed Income, Forex and Listed Derivatives?
With the emergence of new regulations such as MiFID in Europe, the Industry has been
confronted to modified or new reporting requirements. The very same way than for post-trade,
whether regulatory reporting will be FIX or ISO largely depends on who is driving STP (Straight
Through Processing) initiatives. If the initiative is driven by the front-office they will likely already
have an investment in FIX and it will be easier to implement regulatory functions via FIX. If the
initiative is driven by the back-office (as is the case with some investment managers and certainly
if outsourced to a service provider such as a custodian) they will likely be using ISO 15022 and
eventually ISO 20022, making it less expensive to automate regulatory reporting using ISO
messaging.
6. What is the plan going forward?
The organizations will continue to meet on a consistent basis going forward to ensure the
roadmap continues to accurately depict the current as well as future standards environment.
Note: A plan to update the roadmap is being drafted (Nov 2018).
We will continue to build onto this list of FAQs as queries come through so please send any
questions through to roadmap@fixprotocol.org. This will be sent to all parties from the Standards
Coordination Group that were involved in the overall effort.
