On 12 July 2024, the Financial Markets Standards Board (FMSB) issued a transparency draft of a proposed standard for sharing standard settlement instructions (SSIs) and an addendum.
The FMSB was established in response to the Fair and Effective Markets Review in the UK with a mandate to issue clear and practical guidance designed to improve conduct and raise standards in the wholesale fixed income, currencies and commodities markets.
The transparency draft is applicable to firms when sharing their own SSIs, or where they manage their clients’ SSIs as part of their commercial relationship in relation to their clients’ SSIs. It does not apply to firms’ management of their counterparties’ SSIs. The transparency draft is in two parts: a standard which proposes core principles for the channels, processes and governance around sharing SSIs and templates, based on an industry-standard taxonomy for use in residual cases where SSI instruments are sent manually.
The standard aims to increase the adoption of electronic solutions that allow for standardisation and pre-authentication of settlement instructions, and which facilitate straight-through-processing, to improve efficiency of SSI management by recipient counterparties and reduce settlement fails through incorrect SSIs. Where such electronic solutions are not legally or operationally feasible, the standard incorporates templates for manual sharing of SSIs which incorporate an industry-standard taxonomy (based on ISO 20022), which should minimise ambiguity around SSI data fields and allow for recipient counterparties to automate their ingestion.
The FMSB invites comments by 18 October 2024.