April 4, 2002

Organizations Present

Bear Stearns; Bloomberg; Bond Market Association; Clearnet; CSFB; Deutsche Bank; Fidelity; FISD; FT Interactive; Goldman Sachs; Jordan & Jordan; London Market Systems; Merrill Lynch; MoneyLine; Moody’s Investor Service; Morgan Stanley; Reuters; Telekurs Financial; Thomson Financial

Meeting Objectives

The purpose of this meeting was:

1. Understand the objectives of the Bond Market Association’s Securities Master Database Initiative and determine how MDDL and BMA can work cooperatively to define an XML standard vocabulary and distribution format for bonds.
    
2. Evaluate the completeness and logical structure of the MDDL functional coverage matrix for fixed income. Adjust as appropriate.
    
3. Determine the mechanism for creating and approving a single repository of fixed income terms and definitions.
    
4. Determine the schedule of work required and target dates for completion of MDDL Version 2.0.

Bond Market Association

FISD has met three times with the Bond Market Association to discuss the relationship between MDDL and the BMA’s Securities Master Database Initiative. John Goeller, of CSFB and Chair of ISO 15022 XML Working Group (WG10), facilitated the introductions and suggested the value of cooperation between MDDL and BMA.

Last year, the BMA announced the creation of an industry-wide task force to develop a Securities Master Database to collect information on fixed-income securities. Their purpose is to achieve greater uniformity in the descriptive information required for trading, clearing, settlement and STP. According to BMA, the issue is that securities master databases routinely suffer from inaccuracies and a lack of timeliness as a direct result of how data vendors receive information from the issuer or underwriter. Transmittal of data from source to vendor is conducted without agreed on standards regarding the method or content of the transmissions. In addition, there is no way of ensuring that vendors are even notified for new issues. The lack of universal notification and standard definition/transmission methods impacts the timeliness of delivery.

The BMA, acting as a utility on behalf of the industry, is looking at becoming a collection agent and neutral source of securities information. The BMA Security Master Database can be used as a reference source on basic terms and conditions and to communicate and report securities information throughout the trading process. The components of the initiative include:

• Definition of the list of data attributes (new issue information) required to trade, clear and settle corporate and municipal bonds. The chair of this “Content Working Group” is Sherie Schaefer (Morgan Stanley). The Content Working Group intends on completing the list of New Issue Data Fields required to populate the portal by the End of April.
   
• Development of a schema as part of a BMA portal to ensure compliance with the data definition requirements. The chair of this “Technology Working Group” is Larry Ng (Moneyline). The target date for completion of the schema is May 31. The target date for completion of the portal is the end of this year.

MDDL/BMA Coordination

Over the past few weeks, FISD has been involved in discussions with SWIFT, 15022/WG10, FIX (fixed income working group), XBRL, RIXML and BMA on coordination of XML-related efforts. The objectives are to (1) ensure communication (objectives, status, priorities) among the various groups, (2) make sure that activities are not being duplicated and (3) manage the convergence of activities focusing on transactions with those emphasizing security set-up and pricing.

All groups are in agreement that one of the primary objectives is the creation of a repository of complete and precisely defined terms. A single repository should simplify the process of normalization, maintenance and acceptance of both terminology and definition. The notion of using 15022 as the official repository resonates positively with all groups involved in these discussions.

Toward that end, MDDL views the outcome of the discussions with BMA as the creation of a single list of data attributes (with agreed upon definitions) for fixed-income data. The initial evaluation of the BMA list of data attributes showed a close relationship with the ones outlined in the MDDL functional coverage matrix for bonds. The additional good news is that many of the structural and classification issues identified by BMA have already been addressed by MDDL (e.g. the differences between “database design” and “definition of vocabulary” have been addressed by MDDL using controlled vocabularies and other mechanisms).

BMA agreed that the structure of their required fields list was designed to facilitate human evaluation. It is not intended as a vocabulary structure. They support the integration of their data attributes into the MDDL classification.

Integrated Spreadsheet by London Market Systems

FISD has hired London Market Systems as consultants to integrate the BMA data attributes into the MDDL spreadsheet and to coordinate among our members to define the missing elements and assist in the completion of the projected new issue of the MDDL Specification (scheduled to be completed on May 31).

LMS will help manage the review process and procedures for gathering fixed income terms and requirements; ensure that the vocabulary structure, terms and definitions to be included in the projected release of MDDL meet the requirements of the Bond Market Association; deliver complete and up to date vocabulary representations for the projected fixed income MDDL release in a format suitable for use by the MDDL Technical Working Group in generating the XML Schema for the release; and present views of MDDL terms and projected coverage in formats suitable for presentation to different business user communities.

Next Meeting (April 19)

The next working meeting on MDDL Vocabulary (Bonds/Fixed Income) has been scheduled for Friday, April 19 from 10:00am - Noon at the offices of the Bond Market Association (40 Broad Street, 12th Floor, NYC).

We’ve reorganized the working vocabulary documents and posted them to the web. Our goal is to be able to present BMA with a full working list of terms and definitions for the New Issue data they need for their Portal Project. In order to do this:

1. We need to get the terms finalized and organized into the right order/hierarchy. Following the meeting on Friday, the task will be to propose the optimum implementation of these hierarchies as MDDL properties, classes, etc.
    
2. We need FISD member review of the debt terms hierarchy view. This should include checking to see that we implemented the changes correctly, addition of new terms and evaluation of the new proposed sub-headings to replace the BMA ones. Please direct comments to Mike Bennett at London Market Systems.
    
3. Determine definitions for the agreed terms. The hierarchy we agreed to during the last meeting was ISO 15022 -> BMA -> MDDL. Definitions should focus on the context/meaning of the terms as well (e.g. how the terms will be treated by MDDL and how the resultant tags may be used).