XML Interoperability & Convergence ISO 15022 XML Working Group (WG 10)

1. XML Interoperability & ConvergenceISO 15022 XML Working Group (WG 10) XML on Wall Street November 20th, 2001 John Goeller

2. Leveraging New Technology Business Modeling – Unified Modeling Language (UML) XML Evolving Existing Standards Creating New Standards Standards Repository Expanding Asset Class Coverage Focusing on Market Practice Standards Development

3. Interoperability or Convergence?

4. 15022 15022 15022 15022 Standards Landscape OTC Derivatives MutualFunds/ Unit Trusts F/X Exchange Traded Derivatives Fixed Income Equities PRE-TRADE TRADE POST-TRADE SETTLEMENT POST SETTLEMENT /PRE-SETTLEMENT

5. Standards Complexity: Post-Trade – Pre-Settlement

6. Does XML Solve Securities Standards Interoperability Issues?

7. XML Doesn’t Solve Interoperability <SWIFTML> <NoticeOfExecution> ... </NoticeOfExecution> </SWIFTML> <FIXML> <ExecutionReport> ... </ExecutionReport> </FIXML> Quoi? Do you like XML?

8. Industry Solutions: ISO 15022 XML Working Group WG 10

9. WG 10 Mission Statement Evolve ISO 15022 to permit migration of the securities industry to a standardized use of XML, guaranteeing interoperability across the industry and with other industry sectors, particularly but not restricted to the financial industry.

10. Current ISO 15022 • What included in the ISO 15022 standard? • Part 1: Data field and message design rules and guidelines • Part 2: Maintenance of the Data Field Dictionary and Catalogue of Messages • What’s not included in the ISO 15022 Standard? • Data Field Dictionary (DFD) • Reference Table of Multiple Syntaxes • Catalog of Messages

11. S.W.I.F.T. Standards Methodology ISO 15022 DFD Standards Repository + Other Methodologies: ebXML HL7 Existing Message Sets WG 10 Overview ISO 15022 Recommend-ations WG 10 15022

12. WG 10’s Focus WG 10 is creating a framework to establish agreement on how we develop, implement and store securities industry standards Four Building Blocks • Applying Business Modeling to Standards Development • Harmonizing the Use of XML • Implementing a Centralized Standards Repository • Leveraging Industry Coordination

13. Design Rules Reverse Engineering Registry/Repository Standards Repository WG 10’s Three Streams of Work UML XML Schema UML Business Modeling Guidelines UML to XML Design Rules <xsd:schema xmlns:xsd="http://www.w3.org/1999/XMLSchema"> <xsd:element name=“NoticeOfExecution" type=“NOE"/> <xsd:complexType name=“NOE"> </xsd:complexType> Unified Modeling Language (UML) is a visual modeling language for capturing knowledge (semantics) about a subject and it is applied to modeling and systems. GSTPA UML SWIFT Reverse engineer existing message sets to business model FIX FpML OMGEO UML Organization of Repository Procedures to register business models and XML Schemas XML Note: A 4th Project Project Team handles industry liaison

14. WG 10 Objectives & Scope of Activities • 1) Update the ISO 15022 Standard • Draft New Standard • ISO 15022 - Part 1 • ISO 15022 - Part 2 • Supporting Documents • Circulate to ISO Member Countries • Finalize and Publish International Standard • 2) Create the Standards Repository

15. FIX Protocol Limited (FPL) and WG 10 • FPL jointly announced with SWIFT that they will support the efforts of WG 10 • Agreement focused on the convergence of their respective messaging protocols around the adoption of ISO 15022 XML • FPL has formed the ISO XML Working Group • Participate in WG 10 on behalf of FPL • Ensure that the functionality offered by FIX messages are fully integrated into the ISO 15022 XML repository • Integrate into WG 10 Structure • Recent Activity • October 2001 – New York WG 10 Review Session • November 2001 - New York Pre-Trade/Trade Working Session

16. ISO 15022 Standards Repository • Repository will be divided by meaningful segments • Standards Management Groups (SMG) will be responsible for segments of the repository

17. 15022 Proposed ISO 15022 Standards Environment User Community Registration Management Group Registration Authority Standards Management Group Standards Management Group Standards Management Group Web - Site User Community User Community

18. Two Levels of Interoperability/Convergence • Standards Development • Using Business Analysis and Design Techniques • Agreeing on a Common Set of XML Design Rules • Establishing a Standards Repository which will contain the Components of the Standards • Standards Implementation • Supporting the migration to the new standards • Does the Benefit of Migrating to the New Standards Outweigh the Switching Costs?

19. General Issues Agreement is difficult Existing standards groups must consider their installed base Vendors that support the standard’s growth Potential switching costs WG 10 Specific Issues Business Modeling – Unified Modeling Language (UML) New Technology/Concepts Standards Repository Governance Issues Intellectual Property XML Implementation Changes WG 10 Challenges

20. Single XML Vocabulary? It is a matter of… • Timing • Organizations need to decide when they can migrate to this new way of developing standards • Education • Organizations need to understand/utilize the standards methodology • Governance • Organizations need to understand their role in future standards development through the standards repository

21. WG 10 Next Steps • October, 2001 - Circulate Drafts to WG 10 Members • November, 2001 - Complete WG 10 Review • December, 2001 - Circulate Drafts to ISO Member Countries • Late 2001 to Mid 2002 - Create Initial Standards Repository • Current Coverage of ISO 15022 Data Field Dictionary and Catalog of Messages • FIX Protocol • Collective Investments Vehicles

22. Conclusion • Standards • Lots of Initiatives • T+1 Implications • The Securities Industry needs to focus on the Post-Trade to Pre-Settlement standards overlap • Interoperability/Convergence • WG 10 is working on a solution • Challenges • Timing • Education • Governance