Evolution of Standards – ISO International Seminar on Adoption of ISO for RTGS Stephen Lindsay – Head of Standards, SWIFT 30 th December 2013

ISO and Standards Presentation title – dd month yyyy – Confidentiality: xxx2

About ISO (1/3) 3 International Organization for Standardization Formed after World War II (in 1946) –65 delegates from 25 countries met in London to discuss standardization About the name: Because 'International Organization for Standardization' would have different acronyms in different languages (IOS in English, OIN in French for Organisation internationale de normalisation), our founders decided to give it the short form ISO. ISO is derived from the Greek isos, meaning equal. Whatever the country, whatever the language, the short form of our name is always ISO.

About ISO (2/3) Federation of 164 National Standards Bodies (NSBs), e.g.: –Bureau of Indian Standards (BIS/India) –British Standards Institute (BSI/UK) –American National Standards Institute (ANSI/US) Formal liaison with 700 international/regional organisations, such as UN, WTO, WCO, OECD, BIS, WB, ICC, CE, EC 150 staff based in Geneva and 50,000 volunteers from NSBs and liaison organisations involved in 730 committees (agriculture, industry, health, services, etc.) 19,500 international standards, 65 with a Registration Authority (RA) TC68 – Financial Services: 31 NSBs, 51 standards (9 with an RA), 13 liaison organisations (ANNA, UN/CEFACT, ECB, EPC, Clearstream, Euroclear, FIX, ISDA, ISITC, SWIFT, Mastercard, Visa, ITU) 4

About ISO (3/3) 5 National Standards Bodies (BIS, BSI, ANSI, AFNOR, DIN, UNI, etc) General Assembly Council Technical Management Board (TMB) Central Secretariat TC TC 68 Financial Services TC 68 Financial Services WG 6 LEI WG 6 LEI SC 7 Banking SC 7 Banking SC 4 Securities SC 4 Securities SC 2 Security SC 2 Security WG4 & 5 ISO WG4 & 5 ISO WG 163 Countries 224 Technical Committees 513 Subcommittees 2,516 Working Groups

Some key ISO standards managed by TC68 and its subcommittees SC4 & SC7 TC/SCStandardDescriptionRA SC4ISO 15022Securities MessagesSWIFT TC68ISO 20022Universal Financial MessagesSWIFT TC68ISO 17442Legal Entity Identifier (LEI)- SC4ISO 6166International Securities Identification Number (ISIN) ANNA SC7ISO 9362Business Identifier Code (BIC)SWIFT SC7ISO 13616International Bank Account Number (IBAN)SWIFT SC4ISO 10383Market Identifier Code (MIC)SWIFT SC7ISO 8583Financial cards- Presentation title – dd month yyyy – Confidentiality: xxx6

SWIFT & ISO Messaging Standards Timeline Proprietary MT Payments, Cash, Treasury & Trade ISO – 1997 Securities only ISO Securities only ISO All markets Presentation title – dd month yyyy – Confidentiality: xxx7

About ISO Grew out of ISO 15022: –Notion of re-usable components (financial dictionary) –Broader scope (all financial services) –Syntax independent –Extensible Methodology –A ‘recipe’ for making financial messaging standards –Latest version ISO 20022:2013 Content –Business Model –Collection of message definitions Presentation title – dd month yyyy – Confidentiality: xxx8

The ISO Methodology Published in 8 parts by ISO Implemented by Registration Authority The methodology distinguishes 3 layers: Presentation title – dd month yyyy – Confidentiality: xxx9 Defines financial concepts, e.g., ‘Credit Transfer’ Business / Conceptual Defines e.g. credit transfer messages, to serve the business process Logical Defines physical syntax, e.g. XML Physical

Methodology - Business / Conceptual Layer Presentation title – dd month yyyy – Confidentiality: xxx10

Methodology - Logical Layer Presentation title – dd month yyyy – Confidentiality: xxx11 Elements in the Logical Layer refer to the Business / Conceptual layer for their definitions

Methodology - Physical Layer Presentation title – dd month yyyy – Confidentiality: xxx12 XML –The commonest syntax for ISO but not the only one –Defined by an XML Schema (XSD) –Easy to integrate in modern IT environments

Content – (1/2) Presentation title – dd month yyyy – Confidentiality: xxx13

Content – (2/2) Presentation title – dd month yyyy – Confidentiality: xxx14

ISO Governance Technical Committee 68 (TC68) [Conv.: K. McKenna] –Registration Management Group (RMG) [Conv.: J. Whittle] Submitters of new messages and maintenance requests Registration Authority (RA) Technical Support Group (TSG) Standards Evaluation Groups (SEGs) –Payments –Securities –Cards –FX –Trade Services Presentation title – dd month yyyy – Confidentiality: xxx15

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How to become a member of the RMG, SEGs or TSG? RMG members are nominated by participating member* countries and category ‘A' liaison organizations of ISO TC68 or one of its subcommittees. SEG and TSG members are nominated by participating and observer member countries or any category of liaison organization of ISO TC68 or one of its subcommittees. Nominations must be addressed to the ISO TC68 secretariat by the national standards body of the country or by the liaison organization that the member represents. * India/BIS is a participating member in TC68. Presentation title – dd month yyyy – Confidentiality: xxx18

For more information see the TC68 Homepage Presentation title – dd month yyyy – Confidentiality: xxx19

ISO Adoption Presentation title – dd month yyyy – Confidentiality: xxx20

21 IPFA SEPA,EU BR DK CH US – retail division of FRB CPA, CA IPFA T2, EU AU Zengin, JP CNAPS2, CN IN Low- value High- value BOJNet, JP CPA, CA Live NZ SG CO PE ISO Adoption – Payments MI & initiatives From discussion to implementation Live PG CL UK SADC Hybrid ZA PL BN US

Status overview – Payments MI StatusPlanned live date EU-SEPA (33 countries) LiveLive – end date 2014 (euro- countries) IPFALiveSince 2010 IN - RTGSRoll-out2013 SADCPlanned2014 JP-BOJNetRoll-out2015 ZAPlanned2015 CHRoll-out AU-LVPPlanned2017 T2Committed2017 CA-all payment systemsRoll-out2020 CNAPS2Under discussionTBD 22

ISO in the corporate-to-bank space More than 60 banks receiving payment initiation messages (over SWIFT) Around 70 members (corporates and banks) defining common global implementation guidelines

ISO Adoption ‘mApp’ for iPad Presentation title – dd month yyyy – Confidentiality: xxx24

ISO allows for more flexibility than MT to cater for local/specific needs: Implementation guidelines formal way to express market practice Extensions Right tools and services available to manage flexibility ISO Awareness Training Live Meeting V0125 Why adopt ISO 20022? a global standard to meet local needs

Who (and what) is driving ISO adoption? New initiatives –Market infrastructures –Global harmonization & regulation (e.g. SEPA in Europe) –Automation in specific markets (e.g. the ‘investment funds’ market) New players –Corporates, fund managers New technology –XML, SOA, web services 26

How to adopt ISO 20022? Managing diverging local implementations 27 Is a risk – but still better - Coordination through working group defining HVP implementation guidelines -Best practice sharing -Tools allow to harmonize MyStandards -Mitigate risks A risk that can be mitigated by a coordinated approach: Collaboration and best practice sharing in working groups (e.g. HVP implementation guidelines) Services to help communities migrate and implement (roadmap/creation of guidelines/mapping/etc) Tools to facilitate sharing and harmonization

Case Study: SEPA (1/2) Goal –A single ‘domestic market’ for retail euro payments –33 countries – not all part of euro area or EU –Principal instruments: Credit Transfer and Direct Debits Replace country-specific retail payment schemes Replace domestic standards with ISO –Bank-to-Bank –Corporate-to-Bank Bank-to-bank, cross-border: live 2008 Corporate-to-bank, domestic: end-date Feb 2014 Presentation title – dd month yyyy – Confidentiality: xxx28

Case Study: SEPA (2/2) First major implementation of ISO First phase successful, subsequent phases still ongoing Lessons learned: –Importance of clear governance and ownership –Need to involve all stakeholders –Communication – clear and consistent messages –Consider impact on legacy systems –Clear market practice – formally defined Presentation title – dd month yyyy – Confidentiality: xxx29

SWIFT’s role(s) in ISO Inventor of ISO Principal submitter (80%+ of content submitted by SWIFT Standards) Registration Authority Members of: –TC68, SC2, SC4, SC7 –RMG –SEGs –TSG Presentation title – dd month yyyy – Confidentiality: xxx30

SWIFT’s ISO related services Consulting services for submitters Adoption and implementation consulting Standards tools and technology (MyStandards) Network provider: –Connectivity –Value-added services Integration Testing Validation Copy services Presentation title – dd month yyyy – Confidentiality: xxx31

Presentation title – dd month yyyy – Confidentiality: xxx32 Any Questions?

Presentation title – dd month yyyy – Confidentiality: xxx33 Thank you

Presentation title – dd month yyyy – Confidentiality: xxx34 Backup (Securities Adoption)

DTCC, US JASDEC, JP [Post-trade] Euroclear Clearstream ANBIMA, BR T2S, EU CSD, LI CSD, PL 35 CSD, EE CSD, LT ASX, AU Live ISO Adoption – Securities MI & Treasury MI – From discussion to implementation CLS Treasury MI Securities MI SGX, SG JASDEC & TSE, JP [Corp.Act] VN Live CN Live BR, CSD Live NSD, RU VP Lux VP Sec DK BN

Status overview – Securities & Treasury MI StatusPlanned live date FR-Euroclear / FundsLive Clearstream/FundsLive US- DTCC/Corporate ActionsLive BR-AnbimaLive AU- ASX-Corporate ActionsRoll-outEnd 2013 JP- JASDEC – Post-Trade Services Roll-out2014 JP –JASDEC + TSE – Corp. Actions Roll-out2014 CLSRoll-out2014 T2SRoll-out2015 SG- SGX/Corporate ActionsUnder discussionTBD BR – BM&FBOVESPACommittedTBD 36

ISO Adoption – Funds (live traffic Jan-Oct 2012) 37 GB CH AU TW SE FI NO IE ES IT GR EE BE NL LU KR US FR DE SG HK BM