FEDERATION OF EURO-ASIAN STOCK EXCHANGES > YEARBOOK 2002/2003 > PAGE 8
TAKASBANK
IMPORTANCE OF INTERNATIONAL SECURITIES
STANDARDS FOR STP AND THE ROLE AND
RESPONSIBILITIES OF TAKASBANK
Deregulation, continuous development in information technologies,
and economic and political alliances have been the main trends
triggering several important facts in the financial markets for the
past two decades. In terms of the securities business, mobility of
capital and securities is higher than ever, both on a national and
cross-border scale; national borders are now almost invisible and
there is a dramatic increase in cross-border investments and
transactions. As a result, the complexity of the transactions and
their associated risks have increased. Today a securities transaction
chain covers various processes starting from the trade order until
the finality of settlement. The increased complexity of the
transactions has inherent operational risks, and failures do occur in
the timely completion of the transactions. Thus, the Straight Through
Processing (STP) concept has gained a wide range of attention in
capital markets throughout the world as its application is deemed
essential to overcome operational deficiencies in the whole securities
transaction chain.
Automation falls short if data are wrong. Therefore, inconsistent,
inaccurate and incomplete reference data may cause STP failures.
Four out of five financial institutions see badly managed reference
data as a major cause of internal STP failure, according to reports
published by Tower Group, Reuters and Capco. Within this context,
international securities standards, for reference data and messages,
are key ingredients of STP applications and more than ever have
gained importance.
ISO TC68/SC4 is the relevant subcommittee of the International
Standards Organization (ISO), mainly responsible for the
development and maintenance of international securities standards.
TC68 is one of the 200 technical committees of ISO responsible for
those standards related with “finance”; while SC4 is one of the
three subcommittees of TC68 with the definition of “securities and
related financial instruments – financial messages and codes.” The
scope of SC4 is defined as “creation and maintenance and promotion
of international standards required to support cross-border securities
business and effective and consistent telecommunication between
business entities involved in the various sectors of the securities
and banking industries (However, this does not include data and
information security and retail card related consumer transactions)”.
International securities standards under the scope of SC4 are listed
below:
STANDARDS NAME
ISO 6166 Securities and related financial instruments – international securities identification numbering system (ISIN)
ISO 6536 Bank operations – standard scheme for drawing lists
ISO 7341 Banking – Nostro accounts reconciliation
ISO 7746 Banking – telex formats for inter-bank messages
ISO 8109 Banking and related financial services – securities – format of eurobonds
ISO 8532 Securities – format for transmission of certificate numbers
ISO 9019 Securities – numbering of certificates
ISO 9144 Securities – optical character recognition line – position and structure
ISO 9362 Banking – banking telecommunication messages – bank identifier codes (BIC)
ISO 10383 Codes for exchanges and regulated markets – market identifier codes (MIC)
ISO 10962 Securities and related financial instruments – classification of financial instruments (CFI code)
ISO 13616 Banking and related financial services – international bank account number (IBAN)
ISO 15022-1, 2 Securities – scheme for messages (Data Field Dictionary and Catalogue of Messages)
Part 1: Data field and message design rules and guidelines
Part 2: Maintenance of the Data Field Dictionary and Catalogue of Messages