FPL and SWIFT recently submitted jointly the first proposal for FIX as a domain specific syntax in the pre-trade and trade segments of the securities processing life cycle.
Roadmap for the journey
At the same time as SWIFT and FPL were working to address support for multiple syntax, HSBC suggested that the securities sector construct an Investment Roadmap to inform standards adopters which message syntax was appropriate by asset class and portion of the trade processing life cycle. This effort was joined by FpML and ISITC and will soon add XBRL.
Unexpected benefits
One of FPL’s primary motivations in re-engaging in the ISO 20022 process was to ensure that FIX and the FIX syntaxes are seen as long-term strategic directions for the financial industry. But to view FPL’s participation as being only one of contributing and codifying the FIX standard is too parochial. FPL participants in the ISO 20022 process and the reverse engineering exercise have already encountered modeling artifacts in the ISO 20022 model that can be incorporated into FIX in the future. Not only do technical benefits exist, there are also technical business modeling practices and standards governance practices used within ISO 20022 that can greatly benefit the FIX community.
Conclusion
International standards have a significant impact both at a political and commercial level. At their best they provide access to best practices, elimination of friction in commerce and higher quality. At their worst they can serve special interests, can be technically inferior and even irrelevant. Because the ISO organization, similar to FIX Protocol, is a voluntary organization, the quality of standards produced is directly tied to participation.
The ISO 20022 standard not only defines a messaging standard, it provides a model of financial services business processes and defines a process for managing the evolution of the standard in an environment that promotes open participation and balanced industry governance.
While SWIFT continues to play a critical role in the ISO 20022 standard, the overall structure aims to promote wide industry participation in the maintenance and evolution of the standard.
FPL continues to be represented within the ISO financial services standards and, by doing so, helps to ensure that these standards serve the interests of not just the FIX community, but the overall financial services industry.
The contributors to the ISO standards, with leadership from SWIFT and FIX and others, have chosen a middle way between the two extremes which bodes well for the future of the ISO 20022 financial messaging standard and the financial services industry.
ISO 20022 Financial Messaging Standard Neither a Tower of Babel nor an Esperanto
