DTCC Connection

Dec 09, 2014 • DTCC Connection

Standards Directions: What if…? Scenario Planning to Shape the Standards Future Together

by Joseph King

Dan Thieke, DTCC Managing Director, General Manager, Settlement and Asset Services
Dan Thieke, DTCC Managing Director, General Manager, Settlement and Asset Services

In the third of a four-part series focusing on key topics covered by DTCC panelists at the Sibos 2014 Conference, Dan Thieke, DTCC Managing Director, General Manager, Settlement and Asset Services, shares key points from his session, “Standards Directions: What if…? Scenario Planning to Shape the Standards Future Together.”

Our final article in the series will feature Andrew Gray, DTCC Managing Director, Core Business Management, who will summarize his keynote remarks on the importance of collaboration among market infrastructures, and how it is helping develop innovative solutions to help the industry meet the more complex needs of today’s evolving regulatory and market environment.

DTCC Connection: During your session the panelists engaged the audience in identifying hurdles, perspectives, requirements and opportunities related to standards. What were the key themes that you heard from the audience related to standards?

Thieke: The majority of the session participants and audience members acknowledged that the move from ISO 15022 to ISO 20022 is gaining momentum and that a complete migration is now a question of “when” rather than “if.” Based on our discussion in the room, there is strong consensus that a change of that magnitude, in such a short period of time, would be a challenge for the industry because of the investment and testing required. The group agreed that a move to ISO 20022 should happen organically in which each respective part of the market transitions on its own.

A recurring theme throughout the session also centered on how harmonization and partnerships among market infrastructures can serve as a catalyst for expediting adoption. Eventually, the industry would reach a tipping point for adoption – if enough do it others will follow.

However, hurdles remain. Not everyone sees the benefit of adopting ISO 20022 over ISO 15022, with a small population maintaining the view “why fix it if it’s not broken?” A similar view is that a clear business case will need to be established in order to convert to the newer standard. As a result, some feel the cost benefit isn’t strong enough to warrant a switch and will therefore require a mandate.

Related reading:

Sibos session: “Market Infrastructure Resiliency,” Donna Milrod, DTCC Managing Director and Chief Administrative Officer

Sibos session: “Can Standards Take the Pressure Out of Collateral Management?” Mark Jennis, DTCC Managing Director, Strategy and Business Development, and Executive Chairman, DTCC-Euroclear Global Collateral Ltd.

dtccdotcom