SOCIETY FOR WORLDWIDE INTERBANK FINANCIAL TELECOMMUNICATION 12th January 2007 Fabrice Demarigny Secretary General The Committee of European Securities Regulators 11/13 Avenue de Friedland 75008 Paris France Dear Mr Demarigny, Use of Reference Data Standard Codes in Transaction Reporting – Ref CESR/06-648b SWIFT welcomes the consultation opportunity offered by CESR on the issue of Reference Data Standard Codes in Transaction Reporting. As stated in our responses to previous consultations, SWIFT is committed to the goal of achieving a harmonised European financial market, and we welcome every opportunity to continue our involvement in achieving this goal. SWIFT would be pleased to provide any further clarification or detail on the comments that we have made. Questions relating to our response may be addressed to either of the contact points below. Yours Sincerely Richard Young Securities Markets - SWIFT S.W.I.F.T. s.c. 7th floor - The Corn Exchange - 55 Mark Lane - London EC3R 7NE – UK - United Kingdom Telephone: +44 (020) 7762 2000 - Fax: +44 (020) 7762 2222 - www.swift.com VAT: GB 447 002086 SOCIETY FOR WORLDWIDE INTERBANK FINANCIAL TELECOMMUNICATION Committee of European Securities Regulators (CESR) Use of Reference Data Standard Codes in Transaction Reporting CESR/06-648b Public Consultation Response from SWIFT Background SWIFT is an industry owned and governed co-operative that acts as a central standards body for the financial industry. SWIFT is recognised by the 'de juré' international standards setters such as ISO (International Organisation for Standardisation), ITU (International Telecommunication Union) and UN/ECE (United Nations / Economic Commission for Europe) as an official international liaison organisation which contributes to the initiation, definition and promotion of a number of financial standards. SWIFT is the official ISO Registration Authority for the following key financial standards: ISO 15022: the ISO standard for financial messaging in the securities industry ISO 20022: the successor to ISO 15022, ISO 20022 is the international standard for messaging in the broader financial industry, i.e. securities, payments, treasury, FX, trade etc. ISO 20022 is the only ISO approved messaging standard for the financial industry. ISO 9362: The Bank Identification Code (BIC) unambiguously identifies a financial institution or an entity within a financial institution and is used extensively in automating financial transaction processing. ISO 10383: The Market Identification Code (MIC) is used to identify exchanges, trading platforms and other regulated or non-regulated markets. ISO 13616: The International Bank Account Number (IBAN) is used to uniquely identify account numbers at any servicing financial institution in any country. All ISO standards are “open standards” that can be used, without payment of royalties, on any financial network. In addition to its standards role, SWIFT supplies secure financial communication solutions to more than 7,500 of the world’s leading financial institutions including central banks. SWIFT also provides secure messaging services to leading financial market infrastructures such as the inter-central bank TARGET system, CLS system for foreign exchange and to many central securities depositories. CESR Consultation Page 1 SOCIETY FOR WORLDWIDE INTERBANK FINANCIAL TELECOMMUNICATION Comments on CESR/06-648b Consultation Questions QA- Do you think that the standards chosen by CESR are the relevant ones? Yes, SWIFT agrees the ISO standards listed in the table are relevant. We also believe, however, that CESR should give clear guidelines as to which of these standards should be used within the 23 fields that have already been identified as mandatory for transaction reporting. For example, the paper recommends both the use of BIC (ISO 9362) and MIC (ISO 10383) but does not specify, for example, what should be used to identify an MTF. SWIFT also asks CESR to provide guidelines about how to unambiguously identify the data required in the 23 fields if existing ISO standards are insufficient. There are additional ISO standards that SWIFT believes CESR should recommend. These are the four character ISO 20022 codes that are found in the ISO 20022 data dictionary and that are publicly available, for example those that exist to specify Trading Party Capacity. This will not only reduce ambiguity but also avoid each regulator having to maintain complex mapping tables. QB-What would be the benefits if these standards were also widely used in reporting by the investment firms to the local CESR member? General use of common ISO standards will help ensure that the data received by the regulator is comparable and unambiguous. It will also allow regulators to share data with one another without having to translate or map the individual elements. QC- What are the practical implications of the use of these standards for the financial industry? In our view the development of transaction reporting for MiFID provides an opportunity to move individual markets towards uniform messaging standards for transaction reporting. This should include not just the data elements themselves but also the message structure. We would recommend that the regulatory reporting requirements are modelled according to ISO 20022 methodology. ISO 20022 is an open standard that is syntax independent, which means that although all the elements are clearly defined in the data model, the actual representation of these elements can be different, eg the elements can be represented in FIX format or in ISO message format. CESR Consultation Page 2 SOCIETY FOR WORLDWIDE INTERBANK FINANCIAL TELECOMMUNICATION Whilst we appreciate that there will be a degree of content differentiation between individual regulators, this in itself does not preclude the use of a message standard which could be modelled to accommodate such differences. We believe that CESR should support the development and use of an open message structure, incorporating the reference data items identified, as an option for transaction reporting in all markets. We believe such an approach would benefit firms with multiple reporting obligations, as well as making it easier for the regulator community to exchange information as per MiFID requirements. We also believe that CESR has a role to play in collecting and publishing the additional data requirements of the individual regulators so that this effort can move forward and standardised messages can be created. QD- Do you have a comment on individual standards? Yes. In some cases ISIN (ISO 6166) is not sufficient to unambiguously identify a security. For transaction reporting, it may be necessary to supplement the information by quoting the Place of Listing (POL) for unambiguous identification using a Market Identifier Code (ISO 10383). If this level of granularity is not required, then it would be useful for CESR to clarify why. We also propose that CESR recommends how securities should be identified if they do not have an ISIN – our suggestion is that this could be done in line with whatever ISO WG11 recommends. ------------------------------------------ CESR Consultation Page 3 .