mt-mx coexistence event name, location name, title, swift september 2008
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MT-MX CoexistenceEvent name, Location
Name, Title, SWIFT
September 2008
MT-MX Coexistence - September 2008 2
Agenda
Coexistence update
Framework and improved approach
New products and tools
Questions and answers
MT-MX Coexistence - September 2008 3
Coexistence update
MT-MX Coexistence - September 2008 4
Financial industry standards → The current situation
FIX
SWIFT
FpML
Edifact
Domestic
Proprietary
?
?
?
?
?
?
?
MT-MX Coexistence - September 2008 5
Financial industry standards → The way forward (Coexistence)
SWIFT
ProprietaryEdifact
FIX
FpMLDomestic
ISO20022
ISO20022
ISO20022
ISO20022 ISO
20022
ISO20022
This slide dates from
2004 !
MT-MX Coexistence - September 2008 6
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
MT-MX Coexistence - September 2008 7
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
15022
53 ISO
15022
MT-MX Coexistence - September 2008 8
ISO 20022 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 messages 148 messages176 UNIFI messages 54 Candidate UNIFI messages
MT-MX Coexistence - September 2008 9
Current ISO 20022 development pipelineSecurities, 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
MT-MX Coexistence - September 2008 10
Current ISO 20022 development pipelinePayments, 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)
MT-MX Coexistence - September 2008 11
Coexistence – what is it?
MTs(FIN)
MT 103MT 502MT 300Etc…
247 MTs
MXs(InterAct/FileAct)
pacs.008.001.01setr.010.001.03No equivalent
Etc…
230+ MXs
X
MT-MX Coexistence - September 2008 12
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 20022 for all standards development
MT-MX Coexistence - September 2008 13
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
MT-MX Coexistence - September 2008 14
Community feedback and case studies
• Six cases studies for ISO 20022 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
MT-MX Coexistence - September 2008 15
Framework and improved approach
MT-MX Coexistence - September 2008 16
Overall coexistence framework
1. Prepare MX 2 . Introduce MX 3. Implement MX
MTMX
MT/MX
Decision to build/use MX
MX live on SWIFT
MT removal
MXMT
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)
Busine
ss c
ase
and
ratio
nale
MX
deve
lopm
ent
and
pilo
ting
Coex
iste
nce
supp
ort +
tool
s
MT-MX Coexistence - September 2008 17
Coexistence – improved approach
1. Prepare MX 2 . Introduce MX 3. Implement MX
MTMX
MT/MX MXMT
Busine
ss c
ase
and
ratio
nale
MX
deve
lopm
ent
and
pilo
ting
Coex
iste
nce
supp
ort +
tool
s
• Strengthen the fundamentals of ISO 20022 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
MT-MX Coexistence - September 2008 18
Proposed timeline forInvestment funds
Draft
1. Prepare MX 2 . Introduce MX 3. Implement MX
MTMX
MT/MX MXMT
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
2004 End 2009 End 2011
Busine
ss c
ase
and
ratio
nale
MX
deve
lopm
ent
and
pilo
ting
Coex
iste
nce
supp
ort +
tool
s
Dates to be confirmedat December 2008
Board meeting
MT-MX Coexistence - September 2008 19
Proposed timeline forExceptions & investigations
Draft
1. Prepare MX 2 . Introduce MX 3. Implement MX
MTMX
MT/MX
Busine
ss c
ase
and
ratio
nale
MX
deve
lopm
ent
and
pilo
ting
Coex
iste
nce
supp
ort +
too
ls
MXMT
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
3Q2006 End 2010 End 2011
Dates to be confirmedat December 2008
Board meeting
MT-MX Coexistence - September 2008 20
Why ISO 20022 for securities?
Cost of a double
migration, ISO 15022 followed by ISO 20022
Payback of migration costs to ISO 15022
Cost of coexistence
Have ISO 20022 for core areas
available in time for Giovannini
ISO 15022 should have a
10 year lifespan
Design ISO 20022 for easy
coexistence with ISO 15022
MT-MX Coexistence - September 2008 21
What does this mean for the core clearing and settlement messages?
• SWIFT to develop ISO 20022 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 15022 and ISO 20022• Limit ISO 20022 functionality to that which is available in ISO
15022 and synchronise maintenance• Provide solution to support coexistence, including translation and
directory
MT-MX Coexistence - September 2008 22
New products and tools
MT-MX Coexistence - September 2008 23
Standards ProductsEasing the implementation of ISO 20022
Standards Repository for Implementers
Translation Reference
Translation Rules
Smart Test Messages
SE
PA
Invest
ment
Fun
ds
Pro
xy V
oti
ng
Cash
Man
agem
ent
SC
OR
E
Priorities aligned with market initiatives,
regulatory requirements and
coexistence framework
MT-MX Coexistence - September 2008 24
Standards ProductsWhat and When
Smart Test Messages
Translation Rules
Translation Reference
Standards Repository for Implementers
Live
Live
Beta
Beta
Current Status
Planned Delivery
See UHB
See UHB
End 2008
End 2008
Current plan, subject to change
MT-MX Coexistence - September 2008 25
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 TestMessages
MT-MX Coexistence - September 2008 26
Standards ProductsSmart Test Messages
• SEPA Credit Transfers• SEPA Direct Debits• Proxy Voting• SCORE (payment initiation)
Smart TestMessages
MT-MX Coexistence - September 2008 27
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
IBANValueDate
ValueDateBIC
MXMT
MT-MX Coexistence - September 2008 28
Translation Rules Downloadable now on swift.com BICIBAN
IBANValueDate
ValueDateBIC
MXMT
MT-MX Coexistence - September 2008 29
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
IBANValueDate
ValueDateBIC
MXMT
MT-MX Coexistence - September 2008 30
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
IBANValueDate
ValueDateBIC
MXMT
MT-MX Coexistence - September 2008 31
Standards ProductsStandards Repository for Implementers
• Processable XML repository (ISO 20022 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
MT-MX Coexistence - September 2008 32
Q&A
?
MT-MX Coexistence - September 2008 33
Thank you
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