Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 3

The industry worldwide must satisfy the need for efficient, fast settlement by full adherence to the International Securities Numbering process (ISO 6166) and uniform usage of ISO 15022 based standards for all securities messages. The industry should seek to introduce a global client and counterpart identification methodology (BIC - ISO 9362) to further facilitate straight through processing. Applications and programmes should be structured in such a way as to facilitate open inter-action between all parties.

1.	Does the market use ISIN as the primary securities identification code?	Yes. In Brazil, the São Paulo Stock Exchange (BOVESPA) is responsible for ISIN codification of all Brazilian private and public issued securities.
2.	Are the major participants in the market linked electronically?	Although major participants in the Brazilian market are linked electronically to the depository / securities settlement systems, there are no common communications method. SWIFT is mostly used by large financial institutions acting as local custodians, local brokers and clearing agents as a communication tool with global custodians, international brokers and institutional investors. However, smaller players usually adopt fax as a communication mechanism. It is worthwhile to mention that CBLC has largely encouraged and actively promoted the use of ISO standards securities messaging for affirmation/confirmation processes. Through master agreements signed with Thomson Financial and DTC, CBLC acted as the local provider of both OASYS Global and ID to market participants at lower costs. Nevertheless, the market was not very responsive to those initiatives. Now, with the developments carried out by Omgeo and GSTPA, there is a new opportunity for a widespread adoption of internationally standardised communications systems.
3.	Does the depository communicate using true (i.e. not bilaterally agreed on sub-standards) ISO standards for securities messaging?	Today, CBLC communicates with its participants through its own proprietary network. As mentioned, SWIFT messages are used extensively by larger market participants but not by smaller ones. With the implementation of RTGS payment systems, all instructions related to payments are being based on messaging fully adherent to ISSO 15022. Nevertheless, the systems and protocols were developed internally and are not SWIFT type. CBLC has already developed the technological links supporting message flows and the Brazilian market is right now in process of testing to exchange of all types of messages created for the new environment. In a near future, the idea is to extend the messaging structure to other services not only related to payments.
4.	Does the market operate standard identification codes for counterparties or client accounts and, if so, how do (or could) these fit into a single global identification methodology?	For the institutions using SWIFT messages, the identification codes for market participants are the same. The Brazilian messaging systems will also render possible standard identification codes for counterparties or client accounts.