FIX Endorses Study Group Focusing on International Derivatives Regulation

The ISO Working Group will be responsible for determining the rules for the allocation of the ISIN standard to OTC

The industry-driven and non-profit standards institution, FIX Trading Community (FIX), announced today a sponsorship agreement with the ISO Study Group, the goal of which is to establish ISIB standard’s rules for derivative financial instruments.

The International Securities Identification Number (ISIN) is a universal recognition code assigned to securities issued in the financial markets. It consists of 12 alphanumeric characters (numbers and letters) defined according to the ISO 6166 standard.

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With the start of this new cooperation, FIX wants to document the best practices and encourage the creation of ISIN identifiers among those markets participants who use the body’s open standards. In addition, the entity wishes to integrate them with other standards such as FpML and ISO, to ensure maximum effectiveness and operational liquidity.

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The ISO Study Group is a response to the ESMA requirements about the need to use ISIN codes as over-the-counter (OTC) derivatives identifiers. Statutory objectives of the intuition, however, go beyond the requirements of the ESMA and include the creation of a global identification standard improving risk management and regulators’ activities in various jurisdictions.

As reported by Jim Northey, member of FIX Trading Community and ISO Study Group, in a recent official statement on the sponsorship agreement: “Given the regulatory mandate for the creation of unique product identifiers for derivatives, FIX is delighted to play its part in ensuring a positive engagement between industry and regulators to ensure an optimal solution for all stakeholders.”

Through the working groups – also committees and subcommittees – FIX seeks to identify key regulatory and business issues facing the industry, trying to find the best solutions. Currently, the institution operates dozens of different bodies, and the ISO Working Group is the newest addition to them.

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