from issuer to end investor the need for standardisation john falk ameda beirut, 29 th april 2010

From Issuer to End InvestorThe Need for Standardisation

John FalkAMEDA Beirut, 29th April 2010

Issuers to Investors – What is it?

The Industry is Transforming

CSD

Issuer

Agent

Investment or Fund Manager

Sub-Custodian

ISO 20022(tomorrow)

ISO 15022(today)

GlobalCustodian

XBRLAligned w/ISO 20022

(tomorrow)

AMEDA - 29 April 2010

What is XBRL?


One Horrific Example

• 300+ pages to describe an ‘Exchange Offer’

• 38 separate updates were published from Dec 08 to May 09, as new information was made available

• Validation took 12 separate sources of data

• Five resources worked on it extracting 63 data elements, amassing 44 pages of audit trail changes

The paper-based nightmare of corporate actions continues …

The challenge is to find the right data, in the right pages, buried alive somewhere in the free-text document


XBRL - Issuer Tagging Process

Identify Corporate Action Type

Tag the Corporate Action Data

Create the XBRL Data File & Automatically Validate

Disseminate the XBRL Data File


Example XBRL• The issuer / agent / publisher

will highlight and tag all relevant data elements within MS Word as they are writing the press release or prospectus

• The electronically tagged data elements are stored as fields within the pdf document, and this fielded data is easily extracted when it is ‘read’

XBRL• The issuer / agent / publisher

will highlight and tag all relevant data elements within MS Word as they are writing the press release or prospectus

• The electronically tagged data elements are stored as fields within the pdf document, and this fielded data is easily extracted when it is ‘read’

XBRL• XBRL tagged documents can

provide an electronic message for consumption by the Financial Services Industry

XBRL• XBRL tagged documents can

provide an electronic message for consumption by the Financial Services Industry


The issuer will ‘drag and tag’ and associate free text to structured data, via XBRL tool

For China, for instance, can be in Chinese character set to prevent translation issues


Issuers to Investors : Corporate Actions –U.S. project delivery milestones and plans

2010

2009


Modelling & development-Data model-Taxonomy-ISO alignment-Pilot & implementation

Harmonisation:- downstream market to ISO / SWIFT messages

Business drivers-Stakeholders-Communication -Business rationale

Adoption

Issuers to Investors : Corporate Actions – a global template for new markets


ISO 20022 – Proxy Voting

Shareholders’ meetings and proxy votingMeeting the challenges

• ISO 20022 - A new generation of standards, a new solution

• 8 new MX messages tailor- made for Proxy Voting

• Suitable for global cross-border or local market adoption

• Support for the EU Shareholder’s Rights Directive

• Auditable process• Confirmation of votes lodged• Results reporting• Closed User Group, Proxy Agents

membership


Function of Message MT

ISO 15022

MX

ISO 20022

Meeting Announcement or Modification MT564 with event type CAEV = MEET, CMET, XMET, or OMET (or MT568/599)

MeetingNotification

seev.001.001.03

Cancellation of Meeting or Meeting Notification

MT564 MeetingCancellation

seev.002.001.03

Confirmation of Entitlement MT564 MeetingEntitlementNotification

seev.003.001.03

Voting Instruction (incl voting registration, meeting attendance, appointing proxy,…)

MT565 MeetingInstruction

seev.004.001.03

Cancellation of Voting Instruction MT565 MeetingInstructionCancellationRequest

seev.005.001.03

Status on Voting Instruction MT567 MeetingInstructionStatus

seev.006.001.03

Confirmation of Vote Execution n/a (nominal use of MT568/599) MeetingVoteExecutionConfirmation

seev.007.001.03

Results of Meeting n/a (nominal use of MT568/599) MeetingResultDissemination

seev.008.001.03

New

New

SWIFT MT to MX - Replacing ISO 15022 functionality and new functionalities


Increase market practice compliance levels

Why does it matter - Market practice consistency and compliance improves data quality and STP

• Data quality is the biggest driver of Corporate Actions

• Market practice, integrated with standards, essential for STP

• Securities Market Practice Group (SMPG)

– 39 Countries participating with national market practice groups

– Provides guidance to improve message quality• Market Practice documents• Event Interpretation Grid (EIG)• Guidelines for placement and usage of dates, periods, prices and rates• Event message examples• Unique Event Reference approach

– More at:: www.smpg.info


National Market Practice Groups cover 39 countries, a lot of country-specific practices

www.smpg.info

NMPG countriesNMPG countries specified on EIG


SWIFT’s Asset Servicing Strategy

17

• Issuers and their agents to standardise and automate the CA announcement process including XBRL

• Compliance with Corporate Action Market Practices using STaQS for CA

• Infrastructures to move from proprietary to ISO standards

• Corporate Actions Unique Identifier

• Standardise the tax processes

• Improve transparency and efficiency of Shareholders Meeting services• Support implementation of ISO 20022 and coexistence with 15022 for CA• Easy access to SWIFT messaging for smaller clients (IM/AM)

C/ Increase automation and use of standards

B/ Enforce and support market practice adoption

A/ Replace text with data standards


XBRL focus is appending data “instance” to reports; SWIFT’s to facilitating messaging

Issuers and their agents~1,000,000 events annually for ~85,000 companies and funds

Intermediaries, Market Infrastructures~20 global custodians hold 95% of all assets under custody

Investors, investment/fund/asset managersMany millions of investment accounts at many layers

ISO 15022 & ISO 20022

Documents and XBRL


Thank you


from issuer to end investor the need for standardisation john falk ameda beirut, 29 th april 2010

Documents

xbrl data file ameda

data quality

right data

fielded data

structured data

taxonomy data dictionary

corporate action data

example xbrl