slide 1 unifi_(iso_20022)_v32 unifi (iso 20022) introduction to iso 20022 – universal financial...

UNIFI_(ISO_20022)_v32

UNIFI (ISO 20022)

UNIFI (ISO 20022)

Introduction to ISO 20022 – UNIversal Financial Industrymessage scheme


Agenda

UNIFI (ISO 20022):

– value proposition

– the standard

– the actors

– the registration process

– the Repository UNIFI registration platform Cross industry harmonisation Interoperability within the financial industry Q & A


The UNIFI value proposition (1/5)

ObjectiveTo enable communication interoperability between financial institutions, their market infrastructures and their end-user communities

Major obstacleNumerous overlapping standardisation initiatives looking at XML financial messages:

MDDL, FIX, FinXML, VRXML, RIXML, XBRL, FpML, IFX, TWIST,

SWIFT, RosettaNet, OAGi, ACORD, CIDX, etc.


Proposed solution

A single standardisation approach (methodology, process, repository) to be used by all financial standards initiatives


UNIFI (ISO 20022)


Convergence into ONE standard is the long term objective….


…but in the interim several standards need to coexist to enable quick response to competitive pressures and regulatory demands

Source: John Mersberg, IBM Corporation


Growth adds exponential complexity and expense…


RosettaNet

OAGi

TWIST

Proprietary format

SWIFTIFX

EDIFACT Without common building blocks:• Point-to-point connection• Data is mapped directly from one application to another• Costly, unscalable and difficult to implement and maintain• Process, routing, rules logic needs to be coded to specific message types42 interfaces = n * (n-1)



Standardised implementation reduces cost, time to effect change and improves overall performance…

Canonical message model =• True process integration• Reduced brittleness, faster to respond to change• Shared message services – single/shared parser, message independent rules engine, etc.• Unified monitoring / audit trail

RosettaNet

TWIST

SWIFTIFX

EDIFACT

Canonical Message Model(i.e. ISO 20022)

UNIFI aims at long term convergence, while facilitating short term coexistence…

14 interfaces = n * 2



OAGi Proprietary format


UNIFI - Illustrating business modelling

All institutions have their own sets of data objects

ISO standardises common data objects…

Account

Order

Date

…and groups them into ‘syntax-neutral’ message models, which...

Order

DateDate

XML ISO 15022

… can be ‘transformed’ in message formats in the desired syntax

FIX

EDIFACT


The UNIFI recipe – Major ingredients (1/2):

Modelling-based standards development

Syntax-specific design rules for XML

Reverse engineering approach

- Syntax-independent business standard- Validated by the industry

- Predictable and ‘automatable’- Protect standard from technology evolution

- Protect industry investment and ease interoperability- Prepare for future migration


The UNIFI recipe – Major ingredients (2/2):

Development / registration process

Repository on the ISO 20022 website

- Clearly identified activities and roles- Business experts and future users involved upfront

- Business Process Catalogue & Data Dictionary- Outside of official standard (maintained by

registration bodies)

www.iso20022.org


UNIFI – The five parts of ISO 20022

International Standard: Overall methodology and format specifications for inputs to and outputs from the ISO 20022 Repository

International Standard: Roles and responsibilities of the registration bodies

Technical Specification: ISO 20022 modelling guidelines

Technical Specification : ISO 20022 XML design rules

Technical Specification: ISO 20022 reverse engineering

Copies can be obtained from www.iso.org

Part 1:

Part 2:

Part 3:

Part 4:

Part 5:


Communities of users or organisations that want to develop UNIFI compliant messages to support their financial transactions

Submitting organisations

Could beACBIClearstreamCLSEPAS

EuroclearFIXFpMLIFX

ISITCISTHMDDLOAGI

OmgeoSWIFT TWISTTBG5

Creation of a new set of UNIFI messages to support a specific transactionUpdate of existing UNIFI message sets to accommodate the evolution of the business

Reasons

UNIFI – The actors (1/2)

Etc.


UNIFI – The actors (2/2)

Registration Management Group, RMG– Overall governance / court of appeal– Approve business justifications for new standards– Create Standards Evaluation Groups (SEGs)

Standards Evaluation Groups, SEGs– Represent future users of specific financial areas – Validate message standards

Registration Authority, RA– Ensure compliance– Maintain and publish UNIFI Repository

Technical Support Group, TSG (to be created)– Assist RMG, SEGs, RA and submitting organisations


UNIFI - The registration process (1/3)

Submitter Financial industry group or standards body

Business justification


RMGProject approval & allocation to a SEG

SEGEndorsement of scope and developers

Submitter & RA

Development & provisional registration

SEGBusiness validation

RAOfficial registrationand publication

Repository

Dictionary

CatalogueOptional pilot testingor first implementers

www.iso20022.org

RMG

monitors Submitter

& users



Submitter Financial industry group or standards body



RMGProject approval & allocation to a SEG

SEGEndorsement of scope and developers

Submitter & RA

Development & provisional registration

SEGBusiness validation

RAOfficial registrationand publication

Repository

Dictionary

CatalogueOptional pilot testingor first implementers

www.iso20022.org

RMG

monitors Submitter

& users

Candidate UNIFI messages

UNIFI messages


UNIFIStandards

Evaluation Groups ISTH

Omgeo

CLS

SWIFT

Euroclear

ISITC

ACBI

DataDictionary

BusinessProcess

Catalogue

www.iso20022.org

UNIFI FinancialRepository

UNIFIRegistration

Management Group

Securities

Payments

UNIFIRegistration

Authority

UNIFIUsers

Businessmodels

Candidate

UNIFImessages

Business

justification

UNIFI

messages


Trade Services

Forex


UNIFI – The Financial Repository

Data DictionaryData Dictionary - Business Concepts - Message Concepts - Data Types

Business Process CatalogueBusiness Process Catalogue - Financial business process models- Financial business transactions, including messages- XML message schemas

www.iso20022.org


Continuing with today’s agenda

UNIFI registration platform

UNIFI (ISO 20022)


Approval of the international standard Selection of the Registration Authority Set-up of www.iso20022.org

Creation of Registration Management Group Creation of the first Standards Evaluation Groups

Registration and publication of first ‘UNIFI messages’

UNIFI - The deployment

Ongoing: promotion to developers (standardisers, industry bodies) and users (vendors, end-users)


UNIFI – How does it fit into the ISO structure?

ISO Technical Committee TC68Financial Services

UNIFIRMG

SEGPayments

SEGSecurities

RA

SEGFX

RMG members nominated by P-member countries and A-liaison organisations

TSG & SEG members nominated by all member countries and liaison organisations

SC7Banking

SC4Securities

SC2Security

WG4UNIFI Review

SEGTrade Services

TSG


Members - 50 senior managers from:

– 18 countries: AT, AU, CA, CH, DE, DK, FI, FR, GB, IT, JP, KR, LU, NL, NO, SE, US, ZA.

– 9 liaison organisations: Clearstream, Euroclear, FPL, FpML, ISITC, SWIFT, TWIST, UN/CEFACT/TBG5, VISA.

Convener: Gerard Hartsink, ABN Amro (NL); Vice-convener: Bob Blair, JPMorgan Chase (US); Secretary: Cynthia Fuller, X9 (US)

Meetings: twice a year

Key decisions:– Creation of Payments and Securities SEGs in 2005– Creation of Trade Services and Forex SEGs in 2006 – Approval of 26 projects (Business Justifications)

UNIFI – Registration Management Group


Members – 39 experts

– 13 countries: AT, AU, CH, DE, DK, FI, FR, GB, NL, NO, SE, US, ZA

– 5 liaison organisations: Euroclear, IFX, SWIFT, TWIST, UN/CEFACT/TBG5

Convener: Len Schwartz, ABN Amro (NL); Vice-convener: Bob Blair, JP Morgan Chase (US); Secretary: Deb Hjortland, FRB (US)

Kick-off meeting: in June 2005 Approved: C2B payment initiation (SWIFT/ISTH), Interbank credit

transfers and direct debits (SWIFT), Exceptions and investigations (SWIFT), B2C advice & statement (ISTH/ISITC)

Next: Change/Verify Account Identification (GUF), Cash management (SWIFT)

UNIFI – The Payments SEG (1/3)



Payments Payments Credit

transfers

covering instruments such as:

Direct debits

Cheques

Debit & credit cards

covering actors such as:

Private & corporate customers

Financial institution

s

Central banks

Clearing houses &

RTG systems

Payment ‘factories’


PaymentsPayments

including business areas such as:

Retail / commercial payments,

communications between the

ordering customer and its

bank, etc.

Interbank transfers via

correspondent banking or ACHs, high

value payments, low value bulk

payments, RTGS, etc.

Account opening,

standing orders, transaction and

account information, advices &

statements from …

Payment initiation

Clearing & settlement

Cash management between various actors:

...the account servicing

institutions to account owners,

including reporting from the financial institution…

…to the ordering & beneficiary customers,

reconciliation, exceptions & investigations

handling.




– 16 countries: AU, CA, CH, DE, DK, FI, FR, GB, JP, LU, NL, NO, SE, TR, US, ZA

– 7 liaison organisations: Clearstream, Euroclear, ISDA/FpML, ISITC, FISD/MDDL, FPL, SWIFT

Convener: Karla McKenna, Citigroup (US); Vice-convener: Didier Hermans, Euroclear; Secretary: Dana Brants, SWIFT

Kick-off meeting: in June 2005 Approved: Investment funds (SWIFT), Transaction regulatory reporting (SWIFT),

Proxy voting (SWIFT) Under evaluation: Pre-trade/trade (SWIFT) Next: Total portfolio valuation statement (ISITC), Issuer’s agents communication for CA

(Euroclear), Post-trade (Omgeo), Registration & holder identification (Euroclear), Market claims & automatic transformations (Euroclear), Corporate actions (SWIFT), Settlement & reconciliation (SWIFT), Securities issuance (Euroclear), Triparty collateral management (SWIFT), Fund processing passport report (SWIFT)

UNIFI – The Securities SEG (1/3)


Securities Securities Equities


Funds

Fixed income


Investment managers, distributors,

transfer agents, fund administrator

s

Broker / dealers

Regulators

Custodians

Stock exchanges

, ETC providers

Deriva-tives

Clearing houses, CCPs

CSDs, ICSDs

Market Data

Providers

Service bureaux




Account opening,

standing orders, transaction and

account information, advices &

statements, queries &

investigations

Income, corporate actions,

market data, proxy voting

Collateral, repos, securities

lending & borrowing

Securities management

Custody

Collateral management

Initiation, pre-trade

Trade, post-trade

Clearing &

settlement

Securities Securities



UNIFI (ISO 20022):UNIFI (ISO 20022): Builds on the ISO 15022 data dictionary concept and registration

infrastructure, but strengthens the monitoring by the industry Uses a more robust, syntax independent development

methodology based on UML modelling of business processes and transactions

Uses XML as the syntax for the actual physical messages Has a wider scope than ISO 15022, which is only for securities

messages Is in line with directions taken by other industries (UN/CEFACT)

Looking at the advantages UNIFI (ISO 20022) brings over ISO 15022

Syntax independent business modelling is key to the UNIFI (ISO 20022) standard !



– 11 countries: AU, CA, CH, DE, FR, GB, NL, NO, SE, TR, US

– 3 liaison organisations: FPL, ISITC, SWIFT

Convener: Ludy Limburg, ABN Amro (NL); Vice-convener: Tony Smith, JP Morgan Chase (UK); Secretary: Joshua Derrick, SWIFT

Kick-off meeting: in September 2006

Approved: Forex notifications (CLS)

UNIFI – The FX SEG (1/3)


Foreign eXchangeForeign eXchangeSpot


Forward

Swaps


Investment managers

Hedge funds

Dealers

Custodians

CLS and CLS

settlement members

Currency

Options

Industry association

s (ISDA)

Application

providers

Money brokers

Trading portals,

matching services providers




Clearing and Settlement, including

netting and related

reporting

Post-trade:confirmation,

matching, assignment,

novation, etc.

Notification of trades to third parties

Pre-trade: IOI,

quotes, etc.

Trigger events, option

exercises

Trade: order,

execution, allocation, affirmation

, etc.

Foreign eXchange Foreign eXchange




– 12 countries: AU, CH, DE, DK, FI, FR, GB, IS, IT, NL, US, ZA

– 2 liaison organisations: ISITC, SWIFT Convener: Katja Lehr, IFSA (US); Vice-convener: Dominique

Pierre Barthares, BNP Paribas (FR); Secretary: Jim Wills, SWIFT Kick-off meeting: in September 2006 Approved: Invoice Financing Request (ACBI), Trade Services

Management (SWIFT) Next: e-Invoice (UN/CEFACT/TBG5)

UNIFI – The Trade Services SEG (1/3)


Trade ServicesTrade ServicesCollection

covering products…

Letter of credit

Documentary credit

…and services such as:

Open Account Trading

EBPP

Reconciliation (A/R, A/P),

remittance data

Purchase order,

transport documents

Guarantee

Invoice financing

Pre/post-shipment financing

& factoringe-Invoicing,

EBPP



including actors such as:

Trade facilitators: chambers of commerce,

insurance co, freight forwarders, carriers, customs, factoring

co

Associations providing rules

and master agreements

(eg IFSA, ICC)

Risk managemen

t entities

Private and corporate customers (treasurers

)

Application providers

Financial Institutions

Trade Services Trade Services




Cross-industry harmonisation

UNIFI (ISO 20022)


Created in 1997 to improve world-wide co-ordination of

trade facilitation across all industries

Focusing on international standards for electronic

transactions (e.g., ebXML venture with OASIS)

Promoting technology neutral business modelling and

a central repository of core components

Harmonising across all industries with UN/CEFACT

Ultimate goal is that UNIFI provides the financial portion of the UN/CEFACT repository

United Nations/CEFACT – Centre for trade facilitation and e-business


2004:

– TC68, TBG5 and SWIFT sign a cooperation agreement to investigate alignment in line with the objectives of the ‘MoU on e-Business’

– A workplan is agreed between the signatories 2005:

– Recommendation for alignment of methodologies– Trial submission from UNIFI to UN/CEFACT

2006:– WG4 takes over technological alignment

2007:

– First official submission from UNIFI to UN/CEFACT 2008:

– Customer-to-bank payment components harmonised and accepted in UN/CEFACT core component library

Harmonisation between ISO and UN/CEFACT


ISTH

Omgeo

CLS

SWIFT

Euroclear

ISITC

ACBI

CoreComponents

CommonBusiness

Processes

DataDictionary

BusinessProcess

Catalogue

UN/CEFACT Registry/Repository

www.iso20022.org

UNIFI FinancialRepository

UNIFIRegistration

Management Group

UN / CEFACT(All Industries)

UNIFIRegistration

Authority

UNIFIUsers

BusinessRequests

MessageModels

TBG17Harmo-nisation

Long term convergence goal A single ISO-UN/CEFACT approach

UNIFIStandards

Evaluation Groups

Securities

Payments

Trade Services

Forex



Interoperability within

the financial industry - securities

UNIFI (ISO 20022)


Messages

IndicationQuotation

OrderExecution

(Pre-)AllocationConfirmation

SettlementReconciliation

ISO 15022

Trade ISO 15022

FIX

Two overlapping standards to support the end-to-end transaction

FIX


Executing Party

Trade Counterparty

Ordering Party

Trade Counterparty

Ordering Party

Execution (FIX)

Order (FIX)

Execution (FIX)

Order (ISO 15022)

Execution (ISO 15022)

Order (FIX)

Order (ISO 15022)


Working towards co-existence and convergence


SingleOrder

SingleExecution

UNIFI

NewOrder -single

ExecutionReport

MT 502

MT 513

FIX ISO 15022

Order

Execution



FIX

Order to buy/sell

Security

Quantity

Limit price

Expiry date

Account USD

Executed quantity

Executed price

Execution date

Settlement date

OR

DE

RE

XE

CU

TIO

N

32 = 750

31 = 110; 15 = USD

75 = YYYYMMDD

64 = YYYYMMDD

54=1

22 = 4; 48 = <ISIN>

38 = 1000

44 = 112; 40 = 2

432 = YYYYMMDD

1 = myAccount

ISO 15022

:22F::BUSE//BUYI

:35B::<ISIN>

:36B::ORDR//UNIT/1000

:90B::LIMI//ACTU/USD112

:98A::EXPI//YYYYMMDD

:97A::CASH//myAccount

:36B::CONF//UNIT/750

:90B::DEAL//ACTU/USD110

:98A::TRAD//YYYYMMDD

:98A::SETT//YYYYMMDD


UNIFI

Side/BUYI

ISIN/<ISIN>

OrderQuantity3/Quantity

Order3/OrderPrice/Price1

OrderExpiryDate

AccountIdentification

ExecutedTradeQuantity

ExecutedTradePrice

TradeDate

SecuritiesSettlement1/Date


Executing Party

Trade Counterparty

Ordering Party

Trade Counterparty

Ordering Party

Execution (FIX)

Order (FIX)

Execution (FIX)

Order (ISO 15022)


Order (FIX)

Order (ISO 15022)


Execution (FIX)

Order (FIX)

Execution (FIX)

Order (UNIFI)

Execution (UNIFI)

Order (FIX)

Order (UNIFI)

Execution (UNIFI)




Interoperability within

the financial industry - payments

UNIFI (ISO 20022)


Working towards interoperability and convergence

Let us look at one concrete example from payments area: a customer may need to adapt to the format of the banks…

Customer A

Bank A

Bank B

Bank C

Proprietary format

SWIFTMT 101

IFX format


…or banks may need to accept many formats…

Bank AProprietary format

IFX formatCustomer A

Customer C

Customer B

SWIFTMT 101



SWIFT MT

UNIFI Core Payment Kernel model

The reverse engineering produces a canonical UNIFI message model and ‘convergence tables’

Proprietary

TWIST OAGi

IFX



Adopting UNIFI facilitates convergence and co-existence

IFX

MT 101


UNIFI

Core Payment

Kernel

Core Payment

Kernel

IFX

MT 101


&&[email protected]

www.iso20022.org

slide 1 unifi_(iso_20022)_v32 unifi (iso 20022) introduction to iso 20022 – universal financial...

Documents

v32 unifi iso

v32 agenda unifi iso

unifi value proposition

ibm corporation slide

future migration slide

unifi recipe major ingredients

oagi proprietary format

order date xml iso