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?	ISIN's are used for all UK government, corporate debt and equity securities but not for money market instruments which are settled through the CMO system (a PC based system operated by CREST on a distinct platform from all other UK government, corporate debt and equity instruments).
2.	Are the major participants in the market linked electronically?	Yes. There is a Cable & Wireless network for the CMO system and two competing networks, accredited by CREST, provided by BT Syntegra and SWIFT for the CREST system. All have high standards of throughput, reliability and security. CREST does not accept paper instructions, as a matter of principle to ensure security and efficient processing
3.	Does the depository communicate using true (i.e. not bilaterally agreed on sub-standards) ISO standards for securities messaging?	CREST uses ISO standards where possible and currently approximately 60% of all messages are ISO compatible. There are variances, often due to information required but not supported by the current ISO standard. All depository to depository links are by ECSDA standards. CREST plans to ensure that all key functions can be addressed by ISO 15022 compatible messages by end 2001. It will retain current messages as well. The CMO system uses proprietary message formats.
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?	The CREST system uses BIC codes for users but unique proprietary client identifiers to identify indirect users. The use of client identifiers is not mandatory and this is of concern to the custodian market as it creates settlement matching problems. CREST does though promote and monitor market best practice in use of client identifiers.