[ U P D AT E ]
FIX plans foray
into SWIFT
territory with
new back-office
focus
in recent years and part of this includes
settlement workflows.
“Many custodians today are still instructed
by file and SWIFT isn’t a 100% dominating
protocol in this space,” said David Pearson,
co-chair of FIX’s Global Post-Trade Working
Group working group and head of post-trade
TRADE EXECUTION STAND-
at Fidessa. “It’s about evolving, people see-
ARDS PROVIDER LOOKS TO
ing they need to use the skills and resources
they’ve got.
MOVE INTO BACK-OFFICE,
“If it displaces SWIFT in some areas then
AS SWIFT RESPONDS BY
that is what the industry wants. We’re not
HIGHLIGHTING REASONS
here to force adoption, just to show it’s pos-
TO STICK TO ISO MESSAGING.
sible. People want to make it work so they
produce a standard and a guideline, and
when adopted that fixes [the] problem.”
IX has set its sights on expanding its
In response, SWIFT told Global Custodian
front-office messaging standards to the
back-office in a direct challenge to SWIFT as it is “aware of efforts” from FIX to extend
into the post-trade space, but highlighted
it targets settlement workflows between
“compelling reasons” to stick to existing ISO
custodians and their clients.
standards.
Known as the standard electronic protocol
“ISO 15022 is also compatible at the data
for pre-trade communications and trade ex-
level with ISO 20022, which is emerging
ecution, FIX has been used throughout the
strongly as the settlement standard for
world by the buy- and sell-side for front-of-
securities market infrastructures, most no-
fice functions over the past three decades.
Conversely, SWIFT’s settlement and recon- tably TARGET2 for Securities,” said Stephen
Lindsay, head of standards at SWIFT.
ciliation messaging solution has been the
“ISO 20022 is also gaining ground in related
standard for automated communications
areas of securities business, from corporate
between asset managers and brokers, glob-
al custodians and local agents, and between actions to regulatory reporting, providing
settlement participants and multiple mar-
ket infrastructures.
But FIX is now looking at expanding its
scope to cover more post-trade functions
following successful asset class diversion
F
16
Global Custodian
Spring 2019
a common and consistent data model for
securities players seeking to re-use infra-
structure and investment and analyse data
across operational silos.”
In the meantime, he added, it is rapidly
replacing proprietary formats for payments,
international and domestic, high and
low-value. “By sticking with ISO standards,
securities players will be able to use a single
standard and technology for securities and
cash, providing further scope for platform
consolidation. Moreover, ISO 20022 is
designed to evolve with technology, and is
already being deployed to define the data
exchanged in APIs, simplifying integration
with downstream processes.”
The broadening of FIX’s coverage will see
custodians begin working with FIX, and
Pearson said there are already “big names”
in the discussions.
“Some of our parties around the table
have brought in their main custodians, who
haven’t been part of the FIX story so far
and they are adding their value into our
understanding,” he added. “One of the most
revealing and interesting aspects of this
from my perspective is the extraordinary
level of collaboration to achieve the desira-
ble outcome.
“It’s been a natural conversation for firms
to start to look across the workflow to see
where else the knowledge base and resourc-
es can be used in other parts of the industry
and other parts of the workflow.”
Additionally, FIX has continued its growth
by creating a number of new working
groups aimed at securities services firms.
These include repo and securities lending
groups, with the latter also covering the
incoming Securities Financing Transactions
Regulation (SFTR).