Evolution of Standards ISO 20022 International Seminar on

Evolution of Standards – ISO 20022 International Seminar on Adoption of ISO 20022 for RTGS Stephen Lindsay – Head of Standards, SWIFT 30 th December 2013

ISO and Standards Presentation title – dd month yyyy – Confidentiality: xxx 2

About ISO (1/3) • International Organization for Standardization • Formed after World War II (in 1946) – 65 delegates from 25 countries met in London to discuss standardization About the name: Because 'International Organization for Standardization' would have different acronyms in different languages (IOS in English, OIN in French for Organisation internationale de normalisation), our founders decided to give it the short form ISO is derived from the Greek isos, meaning equal. Whatever the country, whatever the language, the short form of our name is always ISO. 3

About ISO (2/3) • Federation of 164 National Standards Bodies (NSBs), e. g. : – Bureau of Indian Standards (BIS/India) – British Standards Institute (BSI/UK) – American National Standards Institute (ANSI/US) • Formal liaison with 700 international/regional organisations, such as UN, WTO, WCO, OECD, BIS, WB, ICC, CE, EC • 150 staff based in Geneva and 50, 000 volunteers from NSBs and liaison organisations involved in 730 committees (agriculture, industry, health, services, etc. ) • 19, 500 international standards, 65 with a Registration Authority (RA) • TC 68 – Financial Services: 31 NSBs, 51 standards (9 with an RA), 13 liaison organisations (ANNA, UN/CEFACT, ECB, EPC, Clearstream, Euroclear, FIX, ISDA, ISITC, SWIFT, Mastercard, Visa, ITU) 4

About ISO (3/3) National Standards Bodies (BIS, BSI, ANSI, AFNOR, DIN, UNI, etc) 163 Countries General Assembly Central Secretariat Council Technical Management Board (TMB) 224 Technical Committees 513 Subcommittees 2, 516 Working Groups TC SC 4 Securities SC 2 Security WG TC 68 Financial Services TC WG WG TC SC 7 Banking WG WG WG 4 & 5 ISO 20022 WG 6 LEI 5

Some key ISO standards managed by TC 68 and its subcommittees SC 4 & SC 7 TC/SC Standard Description RA SC 4 ISO 15022 Securities Messages SWIFT TC 68 ISO 20022 Universal Financial Messages SWIFT TC 68 ISO 17442 Legal Entity Identifier (LEI) - SC 4 ISO 6166 International Securities Identification Number (ISIN) ANNA SC 7 ISO 9362 Business Identifier Code (BIC) SWIFT SC 7 ISO 13616 International Bank Account Number (IBAN) SWIFT SC 4 ISO 10383 Market Identifier Code (MIC) SWIFT SC 7 ISO 8583 Financial cards - Presentation title – dd month yyyy – Confidentiality: xxx 6

SWIFT & ISO Messaging Standards Timeline Proprietary MT • 1973 • Payments, Cash, Treasury & Trade ISO 7775 • 1984 – 1997 • Securities only Presentation title – dd month yyyy – Confidentiality: xxx ISO 15022 • 1999 • Securities only ISO 20022 • 2004 • All markets 7

About ISO 20022 • Grew out of ISO 15022: – Notion of re-usable components (financial dictionary) – Broader scope (all financial services) – Syntax independent – Extensible • Methodology – A ‘recipe’ for making financial messaging standards – Latest version ISO 20022: 2013 • Content – Business Model – Collection of message definitions Presentation title – dd month yyyy – Confidentiality: xxx 8

The ISO 20022 Methodology • Published in 8 parts by ISO • Implemented by Registration Authority The methodology distinguishes 3 layers: Business / Conceptual • Defines financial concepts, e. g. , ‘Credit Transfer’ Logical • Defines e. g. credit transfer messages, to serve the business process Physical • Defines physical syntax, e. g. XML Presentation title – dd month yyyy – Confidentiality: xxx 9

Methodology - Business / Conceptual Layer Presentation title – dd month yyyy – Confidentiality: xxx 10

Methodology - Logical Layer Elements in the Logical Layer refer to the Business / Conceptual layer for their definitions Presentation title – dd month yyyy – Confidentiality: xxx 11

Methodology - Physical Layer XML – The commonest syntax for ISO 20022 but not the only one – Defined by an XML Schema (XSD) – Easy to integrate in modern IT environments Presentation title – dd month yyyy – Confidentiality: xxx 12

Content – www. iso 20022. org (1/2) Presentation title – dd month yyyy – Confidentiality: xxx 13

Content – www. iso 20022. org (2/2) Presentation title – dd month yyyy – Confidentiality: xxx 14

ISO 20022 Governance • Technical Committee 68 (TC 68) [Conv. : K. Mc. Kenna] – Registration Management Group (RMG) [Conv. : J. Whittle] • • Submitters of new messages and maintenance requests Registration Authority (RA) Technical Support Group (TSG) Standards Evaluation Groups (SEGs) – – – Payments Securities Cards FX Trade Services Presentation title – dd month yyyy – Confidentiality: xxx 15

Presentation title – dd month yyyy – Confidentiality: xxx 16

Presentation title – dd month yyyy – Confidentiality: xxx 17

How to become a member of the RMG, SEGs or TSG? • RMG members are nominated by participating member* countries and category ‘A' liaison organizations of ISO TC 68 or one of its subcommittees. • SEG and TSG members are nominated by participating and observer member countries or any category of liaison organization of ISO TC 68 or one of its subcommittees. Nominations must be addressed to the ISO TC 68 secretariat by the national standards body of the country or by the liaison organization that the member represents. * India/BIS is a participating member in TC 68. Presentation title – dd month yyyy – Confidentiality: xxx 18

For more information see the TC 68 Homepage Presentation title – dd month yyyy – Confidentiality: xxx 19

ISO 20022 Adoption Presentation title – dd month yyyy – Confidentiality: xxx 20

ISO 20022 Adoption – Payments MI & initiatives From discussion to implementation CPA, CA Live DK CPA, CA SEPA, EU Live UK CH US – retail division of FRB US CO Live IPFA BOJNet, JP CNAPS 2, CN PL US PE Zengin, JP T 2, EU IN BN PG SG BR SADC CL AU ZA Live Lowvalue Hybrid Highvalue NZ 21

Status overview – Payments MI Status Planned live date EU-SEPA (33 countries) Live – end date 2014 (eurocountries) IPFA Live Since 2010 IN - RTGS Roll-out 2013 SADC Planned 2014 JP-BOJNet Roll-out 2015 ZA Planned 2015 CH Roll-out 2015 -2018 AU-LVP Planned 2017 T 2 Committed 2017 CA-all payment systems Roll-out 2020 CNAPS 2 Under discussion TBD 22

ISO 20022 in the corporate-to-bank space More than 60 banks receiving payment initiation messages (over SWIFT) Around 70 members (corporates and banks) defining common global implementation guidelines

ISO 20022 Adoption ‘m. App’ for i. Pad Presentation title – dd month yyyy – Confidentiality: xxx 24

Why adopt ISO 20022? a global standard to meet local needs ISO 20022 allows for more flexibility than MT to cater for local/specific needs: • Implementation guidelines formal way to express market practice • Extensions • Right tools and services available to manage flexibility ISO 20022 Awareness Training Live Meeting V 01 25

Who (and what) is driving ISO 20022 adoption? • New initiatives – Market infrastructures – Global harmonization & regulation (e. g. SEPA in Europe) – Automation in specific markets (e. g. the ‘investment funds’ market) • New players – Corporates, fund managers • New technology – XML, SOA, web services 26

How to adopt ISO 20022? Managing diverging local implementations • Is. A risk a risk – but still better - Coordination that can be mitigated by a coordinated approach: • Collaborationthrough and best practice sharing in working groups (e. g. HVP implementation guidelines) group defining HVP implementation • Services to help communities migrate and implement (roadmap/creation of guidelines/mapping/etc) guidelines - facilitate Best sharing practice sharing • Tools to and harmonization - Tools allow to harmonize My. Standards - Mitigate risks 27

Case Study: SEPA (1/2) • Goal – A single ‘domestic market’ for retail euro payments – 33 countries – not all part of euro area or EU – Principal instruments: Credit Transfer and Direct Debits • Replace country-specific retail payment schemes • Replace domestic standards with ISO 20022 – Bank-to-Bank – Corporate-to-Bank • Bank-to-bank, cross-border: live 2008 • Corporate-to-bank, domestic: end-date Feb 2014 Presentation title – dd month yyyy – Confidentiality: xxx 28

Case Study: SEPA (2/2) • First major implementation of ISO 20022 • First phase successful, subsequent phases still ongoing • Lessons learned: – Importance of clear governance and ownership – Need to involve all stakeholders – Communication – clear and consistent messages – Consider impact on legacy systems – Clear market practice – formally defined Presentation title – dd month yyyy – Confidentiality: xxx 29

SWIFT’s role(s) in ISO 20022 • Inventor of ISO 20022 • Principal submitter (80%+ of content submitted by SWIFT Standards) • Registration Authority • Members of: – TC 68, SC 2, SC 4, SC 7 – RMG – SEGs – TSG Presentation title – dd month yyyy – Confidentiality: xxx 30

SWIFT’s ISO 20022 -related services • • Consulting services for submitters Adoption and implementation consulting Standards tools and technology (My. Standards) Network provider: – Connectivity – Value-added services • • Integration Testing Validation Copy services Presentation title – dd month yyyy – Confidentiality: xxx 31

Any Questions? Presentation title – dd month yyyy – Confidentiality: xxx 32

Thank you Presentation title – dd month yyyy – Confidentiality: xxx 33

Backup (Securities Adoption) Presentation title – dd month yyyy – Confidentiality: xxx 34

ISO 20022 Adoption – Securities MI & Treasury MI – From discussion to implementation Live CSD, EE T 2 S, EU NSD, RU CSD, PL Euroclear CSD, LT VP Sec DK DTCC, US VP Lux JASDEC, JP [Post-trade] CSD, LI CN Clearstream Live JASDEC & TSE, JP [Corp. Act] VN SGX, SG Live BN ANBIMA, BR CLS ASX, AU BR, CSD Securities MI Treasury MI 35

Status overview – Securities & Treasury MI Status Planned live date FR-Euroclear / Funds Live Clearstream/Funds Live US- DTCC/Corporate Actions Live BR-Anbima Live AU- ASX-Corporate Actions Roll-out End 2013 JP- JASDEC – Post-Trade Services Roll-out 2014 JP –JASDEC + TSE – Corp. Actions Roll-out 2014 CLS Roll-out 2014 T 2 S Roll-out 2015 SG- SGX/Corporate Actions Under discussion TBD BR – BM&FBOVESPA Committed TBD 36

ISO 20022 Adoption – Funds (live traffic Jan-Oct 2012) SE FI NO GB NL IE BE US ES EE DE LU CH FR KR GR IT HK TW BM SG AU 37