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?	DTCC: No, CUSIP is the primary securities identifier utilized in the US market. For participants wishing to use ISIN, S&P developed a conversion algorithm that automatically creates ISINs for each CUSIP although most participants use CUSIPs. FED: No, The U.S. has a standardized numbering system that facilitates matching, but it does not conform with the ISIN standard.
2.	Are the major participants in the market linked electronically?	DTCC: Yes. All major participants are linked electronically. The Securities Industry Automation Corporation (SIAC) is a joint subsidiary of the New York Stock Exchange and the American Stock Exchange. SIAC plans, develops, implements, integrates and operates information-handling and communications systems to support order processing, trading, market data reporting, trade comparison and correction, clearance and settlement for the exchanges, also for the National Securities Clearing Corporation (NSCC) and its affiliates. Using a variety of protocols, SIAC manages the communications connections and control of hundreds of circuits between member firms and SIAC host systems, which are located at redundant and geographically separate sites. FED: Yes, All major participants are linked electronically. FED participants are linked via a FedLine connection or Computer Interface connection provided by the Federal Reserve System.
3.	Does the depository communicate using true (i.e. not bilaterally agreed on sub-standards) ISO standards for securities messaging?	DTCC: No, DTCC's system communicates utilizing bilaterally agreed upon standards. DTCC recently launched a TradeSuite product via leased lines, dial-up communications, or via the S.W.I.F.T. network. The TradeSuite product supports all standard message formats and widely used communications protocols although few participants utilize TradeSuite. FED: No, the FRB system communicates utilizing bilaterally agreed upon sub-standards.
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 both the DTCC and the FED, each participant maintains a unique participant code. At this time, plans have not been developed to fit these participant codes into a global identification program.