What issues persist in securities settlement which lead you to believe the Unique Transaction Identifier (UTI) can help?
There are two sides as to why. Firstly, we always had the dream of being able to track a transaction from the earliest moment possible to the moment that it actually settles, even if part of the flow happens outside of Swift.
In any other industry where you’re buying an asset or you’re expecting a payment, you know what it is and have the visibility and tracking. That visibility, whether it’s on FX transactions or payments transactions or securities transactions, was something that we wanted our network to have by default.
Secondly, with the move to T+1 and the fact that the number of fails continues to grow more rapidly – even with CSDR penalties in place – this was the perfect driver to match our ambition to have full traceability on our network with an actual problem that we could solve and it could be tangible.
I would say that the final component was that when we started thinking about tracking, everybody said ‘but we already have a view through our network of custodians of what is happening’. This is why we decided that we should take it one step further and try to track both sides of the transaction. So you don’t only have visibility what’s happening on your side, you also have visibility what’s happening for your counterparty – whether your counterparty is another broker, an asset manager or a custodian. Whoever you’re dealing with in that specific two-sided transaction.
Could you outline how and why you’re using the UTI and what it is – for anyone who is not familiar?
One example is through Swift Securities View, which allows you to track securities transactions from end-to-end throughout their entire lifecycle. It does this by leveraging the UTI which is used to link all Swift messages related to the same securities settlement flow.
We worked with about 50 financial institutions to think about what the best options are to be able to track end-to-end and both sides.
We reviewed a number of candidates, but long story short, the best candidate was to use the UTI. This is because it is an ISO reference that is already used for regulations like SFTR. It contains the LEI, which makes it a perfect candidate to know who is the issuing party of the UTI. And it is already in a format that can be hosted in any message, whether that’s a Swift message or a FIX message or anything else, because it’s a string of characters for a unique reference that is already used. It’s not ambiguous. It’s unique to both sides of the transaction.
What kind of uptake have you seen with the UTI?
As I mentioned, we had around 50 institutions – brokers, asset managers, custodians, market infrastructure, some of the application providers – that participated in the co-creation of Securities View as a concept and chose the UTI. Now today we are at over 200 BICs that are connected to Securities View from around 170 institutions around the world.
From those institutions, we have around a third that are already sending or receiving the UTI and persisting it through the chain.
But if you take the volumes of that, they are relatively small still. I would say less than 10% of transactions today contain the UTI end to end. That’s the next step – not only adoption of the Securities View tracker, but also adoption of the UTI reference.
Do you have benchmarks of where you want to be at various stages in the coming years?
If we consider we started with the campaign for mass adoption in 2024, by 2027, we would like to have sufficient UTI adoption and start thinking about what it will take for the last remaining users to adopt it. So hopefully by the end of 2026 we should be around 70% to 80% adoption of at least the targeted volumes for us.
What would industry-wide UTI adoption mean?
The more people use it, the more transparency and the better the outcome for everyone. Now what is most important is for service providers to actually persist the UTI throughout the chain. We know already that there’s going to be a big push from the asset managers to start using it because they represent the main users of Securities View .
We’re also ensuring that the brokers, who are the first service providers to be able to generate it on behalf of the asset manager or with the asset manager, can start using it.
Then that puts some pressure on the custodians because they serve both the broker and the asset manager, which then asks for the sub-custodian to give them that visibility on the local market. And the sub-custodians, then they ask the same to the market infrastructures. By the way, the market infrastructures also ask for T2S or other local systems to actually do it, which is something that we’re also helping to do. T2S will actually add the UTI in one of their next standard release.
What other use cases do you see for the UTI?
There’s a number of things. Once you have a unique reference that is used from trade confirmation down to settlement then you can start thinking about true end-to-end use cases. Especially considering that we also have a unique reference and a tracking capability for all the cash movements on our network, which we’re also linking to the FX transactions that we have on our network.
In the context of T+1, for example, if you’re an asset manager, you want to have visibility on your assets, but you also want to have visibility on the cash that you’re going to receive, whether it’s to pre-fund a settlement account or whether it’s a corporate action or subscription to a fund.
So other use cases on the UTI are really about how much can you take it to other adjacent businesses on the post-trade securities side.
Part of the uptake of the UTI seems to be around educating the industry of its clear benefits versus cost then?
It brings a lot of benefits compared to the implementation cost. It’s a reference that already exists. The messages already have fields for it. Most systems know how to generate it or receive it. Most application providers that are used by our customers and our users already are UTI-ready. Most matching systems like CTM or others, they are already capable of generating the UTI. Most of the FIX protocol capabilities already have UTI capabilities too.
And we know for a fact that implementation is not that costly. We have calculated that with those that have already started to implement it. Whether these are small firms or big firms, it’s quite easy.
At the end of the day, this is coming. And everyone should be getting on board now.
If there’s one final message about the UTI that you had to put on a billboard or shout from the rooftops, what would it be?
Do you want to be a leader or just a follower? Because this is going to come – whether it’s because of the benefits, or because it’s recommended by regulation, or because the community decides to make it mandatory – it is coming.