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ISO 20022 : A migration strategy in securities markets for corporate events and triparty collateral management

Author

Listed:
  • Neuhaus, Holger

    (European Central Bank, Germany)

  • Hanssens, Benjamin

    (Principal Market Infrastructure Expert, Germany)

Abstract

Anyone involved in processing corporate events and triparty collateral management needs automation and efficiency. A general transition to ISO 20022, the latest messaging standard available, will support further automation across Europe. Its rigorous structure and richer content — compared with the legacy standard ISO 15022 — enables efficient use of collateral across European financial markets and a harmonised process for asset servicing. The Eurosystem and the financial community have developed a Single Collateral Management Rulebook for Europe (SCoRE) setting out how to use ISO 20022. The adoption of this rulebook starts in November 2024 and use of the ISO 20022 format will then become increasingly common. The main issue is how long the legacy standard and local formats should run alongside ISO 20022. Market actors have not yet agreed on how long the transition should last because of a collective coordination problem. The result is a situation where everyone is worse off. To overcome this, a market-wide migration strategy is needed based on cooperation and incentives to define the point from which only ISO 20022 will be used. The Eurosystem is acting as catalyst for a common migration strategy to ISO 20022 because of the benefits it will bring to society.

Suggested Citation

  • Neuhaus, Holger & Hanssens, Benjamin, 2024. "ISO 20022 : A migration strategy in securities markets for corporate events and triparty collateral management," Journal of Securities Operations & Custody, Henry Stewart Publications, vol. 16(3), pages 214-226, June.
    • Handle: RePEc:aza:jsoc00:y:2024:v:16:i:3:p:214-226
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    More about this item

    Keywords

    Eurosystem; collateral management; harmonisation; ISO 20022; co-existence; corporate actions; triparty collateral management;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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