re: International Security Indentification
paul mitcheson / Merrill Lynch
13 Jun 2000 5:57AM ET
With the growth of more cross border exchanges, the identification of the security that was traded with the exchange on which it was traded has ceased to make sense. It is/soon will be possible to buy equity A on EASDAQ and sell it on Tradepoint, neither of which are country specific exchanges.
For EQUITY (I am not qualified to speak about debt) the thing that was traded can be/is uniquely identified using globally accepted standard of a combination of ISIN and Country of Register. This is the lowest level of fungiblity as trading across exchanges incurs no special cost, whereas transferring between registers does. In your example of Guiness, the two securities (I believe) had different countries of register, GB & IE.
The "currency" is irrelevant to security identification and, in Euroland, does not ease any confusion. The SEDOL is not issued for all securities and is rather UK centric. RICs are issued to identify source of price, so you get many RICs per tradable thing. ISIN however IS an internationally recognised identifier. Used in conjunction with the country of register, it DOES identify a security uniquely.
Unfortunatly, FIX uses ONE tag (48) to communicate EITHER the ISIN OR a Country Code. In addition to this problem, there is also a lack of precision as to which country code is to be communicated in 48 - could be country of quotation, issuance or register, but only country of register results in a non-fungible security.
To get around this problem for the immediate future, we will probably be forced to use SEDOL. This is not adequate for the long term as the cross border exchanges expand.
Comments about how to get round this problem using 4.1/4.2 protocols appreciated. Looks at the moment like we'll either have to multiple instances of the 48/22 tag combo or force a format on the text message - neither of which meets the standards.
Ideally, I'd like another tag to be added to the various messages (orders & executions esp.) A.S.A.P.
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Karen Parten
Karen_Parten@ml.com
(piggy-backed off Mitch's log in as I'm waiting for my password)
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> I am curious as to how other firms are (or will be) identifying international (non-US) securities when using the FIX protocol.
>
> Seeing that there is no standard for international ticker symbols, our plan is to primarily rely on a combination of SEDOL and ISO currency code.
>
> The currency code will be used as a backup, in case our, or our trading partner's, SEDOL is slightly mismatched. For example, Guiness PLC trades in London and Ireland. The London version has one SEDOL, and the Ireland version has another SEDOL. One possibility is that our security master file may have incorrectly mapped the Irish SEDOL for the London version of the security. Assuming we want to trade Guiness on the London exchange, we would have sent the incorrect SEDOL to our trading partner. By also sending the currency code (which is set up correctly), our trading partner would be alerted to the mismatch and would alert us.
>
> How are other firms handling international security identification? Are you using SEDOL, ISIN, CINS, etc? Are you using any ticker symbols (e.g. RIC-code?)
>
> --Rich Lerman
>
