During SIBOS, SWIFT officials unveiled an effort to ease the ISO 20022 and MT migration processes, and announced a new agreement with Norway’s central securities depository (CSD).
Financial services messaging cooperative SWIFT is taking steps to ease the migration to the state-of-the-art ISO 20022 messaging standard, which has not been widely accepted by buy-side firms wedded to older messaging standards.
A new offering, SWIFT Translator, is intended to help institutions and market infrastructures “translate messages from any format to ISO 20022 or MT,” officials announced at the SWIFT SIBOS conference and exhibition in Toronto last week. The SWIFT Translator is said to help firms “define, validate and translate messages.”
SWIFT officials say that the new offering is needed as “many market infrastructures (MIs) move to ISO 20022” while securities firms are using “older or proprietary message formats” that may or may not remain compatible.
“Many legacy systems will need to be upgraded in order to process the new standards. This can be a costly and labor-intensive process, placing further time pressures on institutions and increasing operational risk,” officials say.
SWIFT officials say the first phase of the offering will be available in early 2018, and will:
- Customize and define formats and translation rules;
- Translate messages to a new format and validate messages against defined formats, “ensuring pre-defined rules are followed correctly;”
- And “easily maintain standards as they evolve, reducing manual input required.”
The SWIFT Translator offerings can also be used as network-agnostic solutions that let users deploy “where most appropriate, including within back office and middleware applications,” officials say.
In addition, the new offering will work with existing SWIFT products so that MyStandards customers can link directly to SWIFT Translator, officials say. “For example, MyStandards users can define translation rules to a format previously defined in MyStandards as well as validate messages against pre-defined formats,” officials add.
“Migration to a new harmonized standard is a lengthy process and we understand the challenges faced by large and small institutions alike in moving to ISO 20022. Institutions must be able to reduce the risks associated with the migration process and translate messages in a cost-effective and efficient manner,” says Fabien Depasse, head of standards products at SWIFT, in a prepared statement. The SWIFT Translator offering could cut development costs for a migration “by up to 50 percent compared to manual implementation,” Depasse adds.
Norway’s VPS to Support SWIFT CSD Offering
In another SIBOS announcement, SWIFT officials say that the cooperative will bolster its connectivity to Verdipapirsentralen ASA (VPS), Norway’s central securities depository (CSD), officials say.
A new agreement means that VPS will support the SWIFT CSD community offering, and provide it to VPS members, says Annika Lindgren, senior account director, SWIFT Nordics, in a statement. “The CSD Community pricing will make SwiftNet more competitive as the connectivity channel for securities traffic,” Lindgren says.
VPS officials say they need the agreement for competitive reasons.
“The VPS partnership with SWIFT is a key enabler for VPS to stay competitive in international capital markets,” says Sveinung Dyrdal, executive vice president, head of client relations and business development at VPS, in a statement. “By signing the CSD Community Offering Agreement with SWIFT, VPS is taking already efficient procedures to a higher level for the benefit of our clients,” Dyrdal says.
The VPS provides an infrastructure and services for the settlement of transactions in securities and the registration of ownership rights over securities, officials say.
VPS “offers registration for all the major types of financial instruments that are traded in Norway, namely shares, bonds, equity certificates, short-term bonds and funds,” according to SWIFT and VPS.
The VPS services for investors and issuers are delivered via a network of investment banks, brokers, banks and fund management companies, officials add. “These entities, acting as account operators, are responsible for customer relationships with investors and issuers, and manage day-to-day access to VPS services.”
The SWIFT reinforcement could spur “a shift in transaction volume to SwiftNet from other networks,” SWIFT officials say.
“Banks connected to VPS currently use different networks to connect to VPS, SwiftNet being one of them. The banks have the freedom to choose among the network connectivity offered by VPS. By signing the Swift CSD Community Agreement, VPS’s members benefit from SWIFT’s CSD Community Offering, which significantly reduces current level of SwiftNet costs for connectivity to VPS,” according to SWIFT.
About two-thirds of transactions to the Norwegian market are “foreign transactions derived from international centers such as London. It is therefore critical for Norway to have standardized and efficient connectivity with market participants globally,” says Nadine Limbourg, senior market manager at SWIFT, in a prepared statement.
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