Gerard Smith, LCH

Gerard Smith, LCH

LCH is the first central counterparty clearing house (CCP) to sign up to Swift’s ISO 20022 Harmonisation Charter.

The charter is designed to help rollout the ISO 20022 messaging standard and “promote harmonisation”.

LCH, which is majority-owned by the London Stock Exchange, is one of 17 financial market infrastructure providers to have “endorsed” the charter, with other participating organisations including payments associations, central banks and exchange groups.

Gerard Smith, director, collateral services, LCH, says: “A standardised approach can bring increased operational efficiency to the industry, but it requires a consistency and collaboration across the market in order for participants to realise the benefits.”

ISO 20022 is used over Swift’s network to send and receive collateral messages, including margin call notifications, with its members. As a participating member of the charter, LCH will use Swift’s MyStandards platform to share and publish information about the CCP’s ISO 20022 usage and market practices, enabling “greater clarity and consistency across the community”.

Swift says the charter is primarily aimed at financial market infrastructures (FMIs), and includes four principles:

  • FMIs to share information between FMIs about ISO 20022 usage;
  • FMIs to adhere to global market practice, where it exists, and contribute to new global market practice initiatives;
  • FMIs to introduce stricter message version control and release management process and timing;
  • FMIs to publish up-to-date information about standards on a common platform, including market practice compliance, messages and versions used and message release timeline.

Recently, ISO 20022 Registration Management Group, the senior global registration body, approved the ISO 20022 message guidelines – and they have now been published.

Life’s a breach

Elsewhere, Swift has been embroiled in a hacking saga.

Investigators are looking at more potential computer breaches following three attacks – a $101 million cyber heist in Bangladesh – the biggest cyber heist in history; Vietnam’s Tien Phong Bank stopping an attempted wire fraud; and Ecuador’s Banco del Austro losing around $9 million.

As a result of these events, Swift CEO Gottfried Leibbrandt warned banks with inadequate cyber defences they could find themselves booted off Swift’s payment network.