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MT-MX Coexistence Event name, Location Name, Title, SWIFT September 2008.

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Presentation on theme: "MT-MX Coexistence Event name, Location Name, Title, SWIFT September 2008."— Presentation transcript:

1 MT-MX Coexistence Event name, Location Name, Title, SWIFT September 2008

2 MT-MX Coexistence - September Agenda Coexistence update Framework and improved approach New products and tools Questions and answers

3 MT-MX Coexistence - September Coexistence update

4 MT-MX Coexistence - September Financial industry standards → The current situation FIX SWIFT FpML Edifact Domestic Proprietary ? ? ? ? ? ? ?

5 MT-MX Coexistence - September Financial industry standards → The way forward (Coexistence) SWIFT Proprietary Edifact FIX FpML Domestic ISO ISO ISO ISO ISO ISO This slide dates from 2004 !

6 MT-MX Coexistence - September What is driving the move to ISO 20022? New initiatives –Global harmonisation –Giovannini and SEPA in Europe –Market infrastructures –Automation in the ‘funds’ market New players –Corporates, fund managers New technology –XML, SOA, web services

7 MT-MX Coexistence - September FIN message categories Category 1 – Customer Payments & Cheques (18 messages) Category 2 – Financial Institution Transfers (17 messages) Category 3 – Treasury Markets – Foreign Exchange, Money Markets & Derivatives (27 messages) Category 4 – Collections & Cash Letters (18 messages) Category 5 – Securities (67 messages) Category 6 – Treasury Markets – Metals & Syndications (20 messages) Category 7 – Documentary Credits & Guarantees (29 messages) Category 8 – Travellers Cheques (18 messages) Category 9 – Cash Management & Customer Status (29 messages) 5 ISO ISO 15022

8 MT-MX Coexistence - September ISO messages Payments, Cash and Trade Payments –Payments Initiation (5) –Payments Clearing and Settlement (7) Payments Exceptions & Investigations (14) Cash Management (3) Trade Services Utility (50) Invoice Financing Request (3) Securities, FX and Derivatives Investment Funds –Securities Trade (30) and Settlement (16) –Reference Data (3) and Acct Mgmt (5) –Securities Management (7) –Cash Forecast (6) Other Securities –Pre-trade / Trade messages (32) –Securities Transaction Regulatory Reporting (4) –Proxy Voting (8) –Issuers’ Agents Communication (22) Foreign exchange and OTC Derivatives –Non-Deliverable Forwards (7) –Currency Options (4) –Generic (4) 82 messages148 messages 176 UNIFI messages 54 Candidate UNIFI messages

9 MT-MX Coexistence - September Current ISO development pipeline Securities, FX and Derivatives Funds Processing Passport Report (2 messages) (SWIFT) Settlement and Reconciliation (SWIFT) Corporate Actions (SWIFT) Triparty Collateral Management (SWIFT) Securities Post-trade (Omgeo) Market Claims/Transformations (Euroclear) Securities Registration and Holder ID (Euroclear) Securities Issuance (Euroclear) Total Portfolio Valuation Statement (ISITC) Alternative Funds (SWIFT) – not yet approved

10 MT-MX Coexistence - September Current ISO development pipeline Payments, Cash and Trade (and others) Cash Management (+/- 28 messages) (SWIFT) E-invoice (UN/CEFACT TBG5) Change/Verify Account Identification (GUF) E-Mandates (SWIFT) Bank Account Management (SWIFT) Creditor Payment Activation Request (ACBI) ATM Interface for Transaction Processing and ATM Management (IFX) Card Payments Exchanges (EPAS)

11 MT-MX Coexistence - September Coexistence – what is it? MTs (FIN) MT 103 MT 502 MT 300 Etc… 247 MTs MXs (InterAct/FileAct) pacs setr No equivalent Etc… 230+ MXs X

12 MT-MX Coexistence - September Coexistence – current status The MTs are not going away anytime soon SWIFT will support customers through the coexistence period with additional products and services designed to make coexistence ‘easier’ A coexistence implementation plan was started in 2007, but community feedback indicates it may be too early for consensus on milestones and dates for many MTs SWIFT remains fully committed to ISO for all standards development

13 MT-MX Coexistence - September Guidelines for message development New business areas – MX –TSU MTs not adequate – MX to replace MT –Proxy voting, Funds, E&I Regulatory or infrastructure driver – Both MX and MT –Payment infrastructures, SEPA, T2S No business case for MX development – MT, for now –Precious and base metals

14 MT-MX Coexistence - September Community feedback and case studies Six cases studies for ISO implementation completed in the first half of 2008 –No clear positive business case, 50/50 split between positive and negative business cases –Replacing existing messages usually results in a negative case, new implementations often result in a positive or neutral case –Other drivers often help ‘make the case’ (technology, reputation, customer demand) Country and national member group feedback even more strongly polarised –Some countries want quick ‘migration’, others want no migration –Some communities want to continue using existing MTs and see no business case to replace them with new MX messages –Pockets of adoption for some business areas (SEPA, Funds, E&I, cash management), but no overall critical mass yet

15 MT-MX Coexistence - September Framework and improved approach

16 MT-MX Coexistence - September Overall coexistence framework 1. Prepare MX2. Introduce MX3. Implement MX MT MX MT/MX Decision to build/use MX MX live on SWIFT MT removal MX MT Milestones, dates and length of phase to be determined by each MT or MT group, governed by users Decisions by Standards Committee (STC) and business committees (BPC and SSC) Business case and rationale MX development and piloting Coexistence support + tools

17 MT-MX Coexistence - September Coexistence – improved approach 1. Prepare MX2. Introduce MX3. Implement MX MT MX MT/MX MX MT Business case and rationale MX development and piloting Coexistence support + tools Strengthen the fundamentals of ISO by re-focusing on the ‘core’ (models, repository, dictionary) Reinforce our toolkit of products that support implementation, mapping and translation Let the market ‘catch-up’ and allow each business area and community to move at its own pace, while providing guidance on syntax

18 MT-MX Coexistence - September Proposed timeline for Investment funds Draft 1. Prepare MX2. Introduce MX3. Implement MX MT MX MT/MX MX MT MX messages go live 102 Key users must be ready to send and receive new MX messages MT template messages are removed from the network 2004End 2009End 2011 Business case and rationale MX development and piloting Coexistence support + tools Dates to be confirmed at December 2008 Board meeting

19 MT-MX Coexistence - September Proposed timeline for Exceptions & investigations Draft 1. Prepare MX2. Introduce MX3. Implement MX MT MX MT/MX Business case and rationale MX development and piloting Coexistence support + tools MX MT MX messages go live Key users must be ready to send and receive new MX messages MT 195, 196, 295 and 296 are removed from the network 3Q2006End 2010End 2011 Dates to be confirmed at December 2008 Board meeting

20 MT-MX Coexistence - September Why ISO for securities? Cost of a double migration, ISO followed by ISO Payback of migration costs to ISO Cost of coexistence Have ISO for core areas available in time for Giovannini ISO should have a 10 year lifespan Design ISO for easy coexistence with ISO 15022

21 MT-MX Coexistence - September What does this mean for the core clearing and settlement messages? SWIFT to develop ISO syntax versions of the core clearing and settlement messages: –Ready for functional validation 2Q2009 –Final documentation available January 2010 –Live deployment Standards Release 2010 Ensure mapping between ISO and ISO Limit ISO functionality to that which is available in ISO and synchronise maintenance Provide solution to support coexistence, including translation and directory

22 MT-MX Coexistence - September New products and tools

23 MT-MX Coexistence - September Standards Products Easing the implementation of ISO Standards Repository for Implementers Translation Reference Translation Rules Smart Test Messages SEPA  Investment Funds Proxy Voting Cash Management     SCORE      Priorities aligned with market initiatives, regulatory requirements and coexistence framework 

24 MT-MX Coexistence - September Standards Products What and When Smart Test Messages Translation Rules Translation Reference Standards Repository for Implementers Live Beta Current StatusPlanned Delivery See UHB End 2008 Current plan, subject to change

25 MT-MX Coexistence - September Standards Products Smart Test Messages Ready-to-use, pre-filled messages (payload) Customers use to test their internal applications Inbound to the customer, simulating messages they received from a customer, counterparty or correspondent Realistic business data content, not dummy data Valid (no errors) and invalid (with errors) test messages Customizable content – e.g., BIC, IBAN, etc. SWIFT-provided documented test results Fully documented “how to” user guide Packaged for use with SWIFT solutions Smart Test Messages

26 MT-MX Coexistence - September Standards Products Smart Test Messages SEPA Credit Transfers SEPA Direct Debits Proxy Voting SCORE (payment initiation) Smart Test Messages

27 MT-MX Coexistence - September Standards Products Translation Rules Comprehensive documents.pdf (human readable) Downloadable today from swift.com Provide guidance when implementing equivalent MT/MX Organised by business area Credit Transfers and Investments Funds already available, Cash Management planned for end October 2008 BICIBAN ValueDate BIC MXMT

28 MT-MX Coexistence - September Translation Rules Downloadable now on swift.com BICIBAN ValueDate BIC MXMT

29 MT-MX Coexistence - September Standards Products Translation Reference Used to test that an implementation conforms to the published translation rules Sample framework including test messages, XSLT and Java Licensed as a reference product (not supported for production use) Updated for MT and MX standards maintenance SWIFT and partners will provide translations services and customisation tools BICIBAN ValueDate BIC MXMT

30 MT-MX Coexistence - September Standards Products Commercial Solutions SWIFT Integrator Partners with Message Data Services (MDS) label –IONA (Progress Software) –Trace Financial –Volante Technologies All of the above are based on the Translation Rules provided by SWIFT and tested with the Translation Reference BICIBAN ValueDate BIC MXMT

31 MT-MX Coexistence - September Standards Products Standards Repository for Implementers Processable XML repository (ISO and SWIFT MX) –Financial dictionary (reusable) –Message definitions (structures) Contains detailed information that is not in the final schemas, but currently only available in documentation or web query tool Contain all MX messages of all solutions, whether ISO registered or not Future functionality is foreseen for –Formal definitions for business message usage rules –Business process definitions

32 MT-MX Coexistence - September Q&A ?

33 MT-MX Coexistence - September Thank you

34 MT-MX Coexistence - September Back-up slides

35 MT-MX Coexistence - September Coexistence timeline Board agrees to use XML for new developments White paper introduces modelling, XML and basics of coexistence ISO/TC68 starts ISO specification XML roll-out to be in CUGs, no systematic migration Research on coex & translation, no central translation Launch of first new MXs, coex to be tuned to business areas Ultimate dominance of XML confirmed, demand for framework and clear roadmap Development of migration framework and tools Community pushback leads to proposal for a more flexible approach Rejection of central translation, development of initial roadmap


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