Instrument Classification Challenges Spark Call for Standards Review

Messaging standard ISO 20022 may help improve the system for accurately classifying financial instruments, according to a speaker at the International Securities Association for Institutional Trade Communication (ISITC) Europe Quarterly meeting in London on 15 July.

In relation to the management and timely maintenance of classifications, London-based Martin Sexton, a consultant at London Market Systems, said one of the options worth exploring is to manage industry classifications in the ISO 20022 repository.

"The repository contains hundreds of code lists and, at the end of the day, a classification is merely a code list, albeit with structure," he said.

Meanwhile, discussions around whether the existing Classification of Financial Instrument standard, ISO 10962, is fit for purpose are not new. Earlier this year, the EDM Council announced it was aiming to compile a list of requirements for the code to send to the International Organization for Standardization (ISO), following concerns from members that the revised version of the code will be complex to use (Inside Reference Data, April 2010). 

The full story of the article will be in the August issue of Inside Reference Data.