Home page last updated July 5th, 2008

SMPG Global Meetings

Securities Market Practices

Market Practice Rules for existing securities messaging standards, eg, ISO 7775, have been historically defined after industry participants have implemented the standards. To further complicate industry information flows, each industry participant has defined these rules separately and differently. This has resulted in an inefficient exchange of information, whereby standards and their associated market practice rules have been interpreted and implemented differently by every industry participant in each geographic market. This inefficient exchange of information within and across different markets has limited Straight-Through-Processing (STP) in the securities industry.

Securities Market Practice Group (SMPG)

In July 1998, SWIFT sponsored the organisation of the Securities Market Practice Group (SMPG). The formation of the SMPG resulted in the establishment of National Market Practice Groups (NMPG) in more than 35 geographic markets comprised of broker/dealers, investment managers, custodian banks, central securities depositories and regulators. The membership of the SMPG and the NMPGs are committed to the vision that standards in conjunction with defined market practices, will bring the industry closer to its goal of achieving STP.

The SMPG is a tactical initiative focused on enhancing the current securities industry practices. This group realises the benefit of industry utilities and other industry groups in dictating conformance to standards and market practices. As such, there is active dialogue between the SMPG and other similar initiatives (ie, OMGEO, ECSDA, ISITC, ISSA, etc.), in order to ensure that the tactical work of the SMPG provides a first step toward the restructuring of the securities industry.

SMPG Process

The SMPG is open to all participants interested in creating globally agreed market practices for the securities industry. This objective includes the harmonisation of non-regulated geographic differences, as well as consistent implementation by securities industry participants for processing within and across all markets. Monthly meetings of the NMPGs, and the 2 meetings per year of the SMPG, cover issues ranging from "standardised methods of informing custodians to transfer securities" or "resolution of cross-matching at central securities depositories", to the creation of NMPGs in non-participating countries or the development of multi-year project plans.

The detail process begins with the NMPGs’ analysis and documentation of local practices. SWIFT then collates common elements, specifies additional country requirements, and identifies further opportunities for harmonisation of non-regulated differences. After final review and refinement by the SMPG, the documents are published on this site.

SMPG Deliverables

In October 1999, the SMPG published market practices for trade settlement with input from 16 NMPGs. In August 2000, this document was revised to include an expanded list of common elements based on further harmonisation of non-regulated cross-market differences. This work, divided into "Common Elements" and "Country Specifics", details those business elements that are common across now more than 30 countries, as well as additional requirements specific to each country.

SMPG has also discussed and published global market practice on specific settlement business processes such as block trade settlement, book transfers and for other particular S&R needs.

The Corporate Action group has defined common global rules for the most common CA processes (messages flows, proxi voting, etc.). Many countries have now developed their own country specific requirements based on the global recommendations. The current focus is on furhter harmonizing those specific requirements when possible. The group also works on market claims and income compensation, as well as status reporting.

As far as the Trade Initiation and Confirmation group is concerned, they have published a global market practice document covering plain vanilla trading processes.

NMPG Countries – as of July 2008

Austria, Australia, Belgium, Brazil, Denmark, Canada, China, Egypt, Finland, France, Germany, UK and Ireland, Greece, Hong Kong, Iceland, Israel, Italy, Japan, Luxembourg, Mexico, New Zealand, Norway, Poland, Portugal, Russia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, The Netherlands, Turkey, Ukraine, United States and the Eurobond Markets.

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