Bloomberg Pushes for Security Identification Standard05.09.2014
Bloomberg’s proposed Financial Instrument Global Identifier (FIGI) specification – which is based on Bloomberg’s Open Symbology for naming securities using a unique 12-digit alpha-numeric identifier — specifies the structure and semantics of global identifiers, how they are constructed and validated, and their relationship with other financial information.
Many of the systems in use across the securities industry have been built around proprietary, closed methodologies for identifying financial securities. Hundreds of symbologies are in use, with companies often using various classification methods to name and manage financial securities and map contextual information about these securities during the trade negotiation, execution, settlement and clearing processes.
Supporting multiple identifier methodologies can make data management and integration more costly and redundant. “The market has been dominated by licensed identifiers,” said Peter Warms, global data manager at Bloomberg. “They are developed as smart numbers, meaning data dependencies are built into the numbers. So when you have name changes and other corporate actions, those identifiers change.”
Bloomberg’s Open Symbology is an open system for identifying securities across all global asset classes, available in the public domain using an MIT-style license. It makes use of a single identifier for each instrument, called the Bloomberg Global Identifier (BBGID), a 12-character alpha-numerical code that serves for uniform unique global identification.
“I submitted a business plan about five years ago on the idea of creating our own identifier, which came to be known as the BBGID and from there the Open Symbology product was formed and has taken off over the last two years,” Warms said. “We are seeing a tremendous amount of adoption and acceptance from clients that are making it their primary identifier.”
Securities to which BBGIDs can be issued include common stock, options, derivatives, futures, corporate and government bonds, municipals, currencies, and mortgage products. Unique BBGIDs identify securities as well as individual exchanges on which they trade. Composite BBGIDs are also issued to represent unique securities across related exchanges.
“We believe Open Symbology should be considered as the go-to data set/identifier for the instrument level,” Warms said. “Exchanges disseminate both real-time and end-of-day content. The inclusion of BBGID in exchange feeds is another way in which our clients benefit from having a common identifier across multiple data sources.”
The Object Management Group, an industry standards consortium, is inviting public comments on a proposed framework for the FIGI specification. “The openness of Internet-based systems has profoundly altered the way businesses collect, manage and share information,” said Dr. Richard Soley, chairman and CEO of OMG, in a statement. “Markets, customers, and governments are now demanding similar levels of connectivity, transparency, and efficiency from financial systems. We look forward to building consensus around the precise details of an open symbology, and welcome Bloomberg’s initiative in starting this process.”
The OMG membership will vote in June as to the merits of the FIGI proposal. If the proposal is accepted, Bloomberg anticipates the FIGI will become a recognized OMG standard.
“Working with the OMG to establish an open standard for naming financial securities represents an important milestone in our ongoing commitment to support open technology solutions,” said Warms. “We believe the FIGI establishes an open, universal and comprehensive system for naming financial instruments that will help institutions shift resources from redundant data management and reconciliation activities to enhancing client service and pursuing growth opportunities.”
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