Speeding up the Standards Process
![tine-thoresen-2 tine-thoresen-2](/sites/default/files/styles/landscape_750_463/public/import/IMG/687/101687/tine-thoresen-2-580x358.jpg.webp?itok=sWIwmACF)
It can easily take the same amount of time to create a standard and bring a new medicine to market. It takes around ten years, the experts typically say. The problem now is that most of us can appreciate that it takes years to develop a cancer medicine, get the product through clinical trials, and bring it to the market. The argument for why it can take ten years to put together an alpha-numeric code to identify an instrument or an entity, or simply agree on a format to publish data in, is a tad less convincing.
The global nature of financial markets was highlighted during the financial crisis, and it has led to a growing realization that there is a need for standardized, international data that can easily be analyzed. The challenge now is for regulators and the industry to agree on how to do this. At recent industry events, market practitioners have suggested we have to stop talking about the standards problem, and instead come together to actually agree on standards that can be adopted. It has been suggested that perhaps around five large firms can team-up, agree on the best way forward, and become the early adopters.
There might not be much time to discuss if this is the best approach, or if someone has any better ideas. The regulators seem to be running out of patience. At the public hearing on the Markets in Financial Instruments Directive in Brussels in September, Sharon Bowles, who chairs the Economic and Monetary Affairs Committee in the European Parliament, talked about the data problem, saying: "We really must have coordination and some regulatory intervention seems inevitable to push firmly on the outstanding barriers to make sure that it gets done in a sufficiently rapid timeframe."
But Bowles also recognized that the expertise is in the industry. This has been the message for some time now. Regulators want the industry to create the standards. The problem seems to be that the process is too slow. There are now talks about standards bodies and industry associations cooperating, and there constantly seems to be something happening. The issue is perhaps simply that standards-setting takes time.
Regulators do not have time. They want to prevent the next crisis, and waiting for a ten-year standards process may not help the political agenda. It may also be slightly difficult to comprehend that it can take as long to create a standard as it can for a biochemical company to get sometimes life-saving medicines to the ill. The question now is if market practitioners will settle with the fact that this is how it is, or if someone will now take leadership, and get this party started.
For Inside Reference Data and Inside Market Data, the party will be in Hong Kong this month, where we, together with the FISD, have our annual Asia-Pacific Financial Information Conference, including an off-site dinner and a horse-racing evening.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
Northern Trust offers internal fund accounting, data tools to clients
Regulations and a mandate to enhance quality and transparency in a bid to improve the investor experience are pushing buy-side firms to have more oversight of their third-party providers.
EU firms press for faster move to T+1 after smooth US rollout
Following the example set by North America, 70% of attendees at a European hearing on shorter settlement cycles favored a Q4 2027 switch to next-day settlement.
Finra clears hurdle with CAT launch, but several others remain
Two major components of the consolidated audit trail are now in place. But wrangling over the CAT’s future continues.
Bloomberg, industry bodies push back on Cboe’s proposed OEMS rule change
Some industry bodies disagree with the options exchange’s proposal to carve its Silexx OEMS out of the SEC’s definition of an exchange facility and place it into a separate business line.
GenAI: US Fed reveals its five use cases
Internal sandbox used to assess viability and risks; coding and content generation on the agenda.
Zeros and ones: Industry contemplates T+0 as the next step
With the North American transition to T+1 settlement complete, same-day settlement could be the next goalpost set, though skeptics are many.
The IMD Wrap: Déjà vu as exchange data industry weighs its options
Max highlights some of WatersTechnology’s recent reporting on data costs and capacity issues facing the options industry, and asks, haven’t we seen this before somewhere?
FRTB data quality issues persist amid shifting implementation dates
Banks are finding market and reference data challenges posed by the FRTB’s standardized model tricky, compounded by uncertainty over when the regulation will take effect.