There will be much rejoicing among vendors peddling ISO 15022 solutions with the news today that SWIFT will not after all postpone the November 16 deadline for migration to ISO 15022. With many fund managers yet to have solved the problem, there were expectations that a postponement was likely.
The Brussels-based messaging organisation will, however, activate an ISO 7775 Message User Group to support users that may not be ready for the cut over from ISO 7775 to ISO 15022. This will ensure that existing levels of STP can be maintained while users that are not compliant complete the transition from ISO 7775 to ISO 15022. The ISO 7775 MUG will be discontinued on 31 May 2003.
The news followed a meeting of the SWIFT Securities Committee. It concluded that the decision to migrate from ISO 7775 to ISO 15022 – taken by industry representatives in 1997, and based on the need for improved automation, increased risk mitigation and reduced operating costs – could not be delayed. The activation of an ISO 7775 MUG will ensure that the benefits, which in many cases are already evident, can be preserved and built upon.
All SWIFT securities users will automatically be registered for participation in the ISO 7775 MUG but will have the option to opt out at any point before or during its lifetime. Only users that are not ISO 15022-compliant will be charged for participation in the MUG. Charges will be based on a monthly non-compliance fee, which will increase over the lifetime of the MUG. Additionally, non-compliant users will incur a surcharge per ISO 7775 message sent. The level of compliance required will increase progressively during the lifetime of the MUG.
“The ISO 7775 MUG is an insurance policy,” says Kurt Woetzel, Chairman of the SWIFT Securities Committee and Chief Information Officer, Bank of New York. “It should be viewed as an industry move towards self regulation in terms of interoperability and STP.”
“The approach is both flexible and firm,” added Francis Remacle, Head of SWIFT’s Securities Industry Division. “We hope that no user will need to pay for non-compliance and we are providing every support possible to ensure that this can be the case. Given that so many projects in the industry are being developed using the ISO 15022 standard, this has to be the priority.”