ISO 20022, T2S and coexistence Advisory Group, Vienna, 1-2 June 2010

Transcription

1 Item /2010/ ISO 20022, T2S and coexistence Advisory Group, Vienna, 1-2 June 2010 T2S Project Team European Central Bank 1

2 Agenda 1. Why ISO20022 for T2S? 2. Coexistence: myths and facts 3. Coexistence: proposals and exchange of views 2

3 1. Why ISO20022 for T2S? 2. Coexistence: myths and facts 3. Coexistence: proposals and exchange of views 3

4 1. ISO20022 for T2S: a user requirement T2S is committed to use the ISO20022 Standard as stated in the User Requirements document approved by the Advisory Group: The T2S Interface shall use ISO as its single standard for all communications, both inbound and outbound. (T2S ) 4

5 1. ISO20022 for T2S: a logical choice ISO20022 is: A syntax neutral business modeling methodology, A data dictionary: a common vocabulary available to all A set of message models based on business processes that can be expressed in different syntaxes Easier upgrades and interoperability ISO20022 serves: The full settlement chain, from pre-trade, trade, to CCP, corporate actions and cash management Increase efficiency, lower risks ISO20022, a choice already made by others: Industry initiatives (DTCC/SWIFT/XBRL joint initiative on corporate actions Regional drivers: Japan, China, Brazil 5

6 1. Why ISO20022 for T2S? 2. Coexistence: myths and facts 3. Coexistence: proposals and exchange of views 6

7 2. Coexistence: beyond the 15022/20022 question 7

8 2. Coexistence in T2S What is it? Ensure the communication with users that continue ISO15022 messages for a given period Scope: For T2S, this interoperability concerns Pillar I only. Some T2S messages will therefore have no equivalent in the old standard (ie Pillar II/III). However it will be ensured that for these messages as well the restriction rules are implemented where applicable. In practice: Restricting the usage of the ISO20022, by aligning some particular aspects to their ISO equivalent: Length of reference fields, amounts, narrative text Character set Usage of slashes Coexistence: what it s not: Coexistence doesn t mean T2S will send/receive ISO15022 messages, or other proprietary standards 8

9 2. Coexistence - Environment overview ISO15022 IDCP using Coexistence ISO15022/ ISO20022 and after a defined period ISO20022 NCB CSD DCP CMS RTGS IDCP using Proprietary standards No compatibility Or usage of translators, but might be very costly to develop and maintain ISO20022 IDCP using Migration to ISO

10 1. Why ISO20022 for T2S? 2. Coexistence: myths and facts 3. Coexistence: proposals and exchange of views 10

11 3. Coexistence: proposals and exchange of views Ensuring coexistence: What the options? 11

12 3. Option 1: Customisation + validation rules T2S data model: will not be changed, therefore it will remain MX full compliant T2S messages: Customisation according to coexistence rules Change requests on messages to implement the requirement of coexistence in T2S are not needed T2S interface: to be amended (additional validations for outgoing messages) 12 12

13 3. Option 2: Validation rules ISO20022 messages from the start: no later adaptation required Adapt the interface to restrict their possible usage (i.e. length, slashes, character set) Whilst keeping the data model full ISO20022 compliant Validation rules to Check that 16 digits filled, out of the 35 possible IDCP CSD 16/35 digits ISO20022 full schema Interface 35 digits 16 digits MT MX Translator 16/35 digits Table of ISO15022 ISO20022 full schema conversion 13

14 3. Coexistence: scenarios for the transition (1) Scenario 1: at the end of coexistence, full ISO used by everybody (i.e. 35 digits references, full length amounts ) Option 1 Message Restricted schemas Interface Rules Data base Message schemas Interface Removal Rules Data base Coexistence End of coexistence Option 2 Message Interface Data base Message Interface Data base schemas Rules schemas Removal Rules Change required 14

15 3. Coexistence: scenarios for the transition (2) Scenario 2: even though everybody uses ISO20022, for business reasons some restrictions are still needed: these fields are part of the built-in core systems that users are not prepared to change even after messages are phased out. schemas implemented Rules will have to be kept to limit usage Option 1 Message Restricted schemas Interface Rules Data base Message schemas Interface Rules Data base Coexistence End of coexistence Option 2 Message schemas Interface Rules Data base In this scenario, we would have no change to bring to the interface nor to the messages 15

16 THANK YOU 16