Chair and rapporteur: Virginie O’Shea, post-trade technology analyst at Aite Group

Agenda:

• To approve the appointment of the chair.
• To discuss key areas of interest and focus for the subgroup going forward.
• To determine next steps for information aggregation and sharing within the group regarding standards in the post-trade space.
• To discuss how group can work with other similarly focused groups from other associations.

Point of discussion and interest:

• There are a number of groups under the umbrella of various associations that are working on the issue of standards and market practices underlying the clearing and settlement processes. Representatives from one such group – under the auspices of the Association for Financial Markets in Europe (AFME) – provided an insight into some work they are engaged in around market practices and standards for three key areas: broker matching, low automation clients, and triparty arrangements.
• AFME has achieved a significant amount of progress in the area of broker matching by bringing together 12 of the top brokers in the market to establish standards for the vendor community in supporting bilateral matching arrangements. The goal is to provide a level playing field for these vendors to step up to in terms of supporting bilateral matching arrangements and for brokers to duly benefit from netting efficiencies ahead of clearing.
• The group noted that much could be learned from such efforts in proactive collaboration and outreach to the vendor community.
• One participant noted that in the area of standards, the standards roadmap has been created by the main bodies engaged in standards creation – ISDA (for FpML), XML, ISO and FIX Protocol – in order to avoid duplicative efforts in creating new technology and messaging standards.
• Given the numerous groups working on these areas and the lack of coordination across the different demographics in the capital markets community (beyond just buy-side/sell-side split), the group noted that more information sharing would be beneficial in the long term in a similar manner to a standards roadmap, a market practices roadmap might be of use.
• There was some discussion about the failure of certain past standards efforts such as GSTPA and how such failures could be avoided in future.

Agreements and next steps:

• Virginie O’Shea was confirmed as the chair of the subgroup.
• The chair agreed to work with the group to compile a list of all the different groups engaged in standards efforts in the post-trade space and their areas of focus – this could be created as a living document that could determine where market practice groups could potentially collaborate and highlight any significant gaps for future focus.
• Another member agreed to examine the level of messaging standards adoption within post-trade infrastructures (CSDs and CCPs to begin with) – who is using these standards and where are there areas in need of further standardization?
• It was agreed that the next meeting should take place on the week beginning 9 July 2012.

Background:

The Standards Subject Group is focused upon:

• Legal Entity Identifiers (LEI’s) and the Financial Stability Board (FSB)
• CCP clearing
• The Foreign Account Tax Compliance Act (FATCA) and payment standards
• The move to T2S – Will this aid or hinder global standards?
• Unique identifiers in trade messaging
• CCP’s & the use (or not) of existing standards
• Retail banking implications as a result of FATCA developments
• TARGET2 for Securities (T2S) & post-trade compression

The Group has Darren Pearson of the Realisation Group as Acting Chair and is open for nomination for this position.