How we do it: Standard for Sharing of Standard Settlement Instructions (SSIs)
The Standard aims to increase the adoption of electronic solutions that allow for standardisation and pre-authentication of settlement instructions, and which facilitate Straight-Through-Processing, to improve the efficiency of SSI management by recipient counterparties and reduce settlement fails through incorrect SSIs.
Where such electronic solutions are not legally or operationally feasible, the Standard includes templates for the manual sharing of SSIs. The templates have been designed in conjunction with ISITC (headquartered in North America and formerly known as the International Securities Association for Institutional Trade Communication) and incorporate an industry-standard taxonomy based on ISO 20022. They aim to minimise ambiguity around SSI data fields and allow for recipient counterparties to automate their ingestion.
The Standard is applicable to FMSB Member firms when sharing their own SSIs, or where they manage their clients’ SSIs as part of their commercial relationship (for example where they perform custodial or prime brokerage services), in relation to their clients’ SSIs. The Standard does not apply to firms’ management of their counterparties’ SSIs. Any firms who may not be FMSB Members are welcome to apply the Standard as well.
The Standard is structured in two main parts:
1
Core Principles: core principles for the channels, processes, and governance around sharing of SSIs, and
Standard for Sharing of Standard Settlement Instructions (SSIs)
2
Templates: standardised templates, based on industry-standard taxonomy, for use in residual cases where SSI instructions are sent manually.
Template 1_ISITC SSI Form V 1.1
Template 2_ISITC Cash SSI Template
Template 3_ISITC-Cash-SSI-Template_Delete_Final-V1.1
Template 4_ISITC-Securities-SSI-Template_Create-Update_Final-v1.1
Template-5_ISITC-Securities-SSI-Template_Delete_Final-V-1.1
Background
Standard Settlement Instructions (SSIs) specify the “where” of delivery/settlement after the execution of any financial transaction. The most significant cause of fails at the settlement stage, after lack of inventory, is incorrect or missing SSIs.* Human intervention is necessary to resolve exceptions prior to settlement, especially to remediate incorrect SSIs. This inefficiency is likely to become a greater risk with more jurisdictions moving towards accelerated settlement, including the UK and EU’s planned move to T+1 in 2027, leaving less time to input or amend the correct settlement details.
A significant factor is the continued use of manual SSI exchanges, which are prone to errors from transposition, and due to a lack of standardisation in taxonomy and format, are difficult to automate for ingestion by the receiving counterparty. However, errors may also occur even with the use of industry-wide automated SSI sharing solutions, due to insufficient discipline around their usage.
In April 2022, FMSB was approached by the Bank of England and FCA to continue the work begun by the Post-Trade Task Force they established. In Charting the Future of Post Trade the Task Force proposed recommendations to remedy these procedural inefficiencies. Amongst others, it recommended “Standardisation of data models and message formats for the automated settlement process”. Standardisation could also pave the way for future digitalisation and automation.
FMSB creates all of its content by consensus with Members and consults on any proposed Standards via a Transparency Draft period. The manual templates included in the Standard were designed in conjunction with ISITC, in collaboration with their Reference Data Working Group, and we are grateful to them for their help.
*Charting the Future of Post-Trade – Report of Bank of England Post-Trade Task Force, April 2022
Maintenance
Standard for Sharing of Standard Settlement Instructions (SSIs) – Change request process & request form template
Standard for Sharing of Standard Settlement Instructions (SSIs) – Change request log