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Dennis Wisnosky




Presentation Slides – 


20151102 FIBO-FBC FCT


When will we start work on Securities?  EK answer is we will start weaving that in, from now on.


Status (slide 2) FBC passed 1st reading in Boston. Will have 2nd reading in La Jolla (san Diego) in Dec13 Now addressing comments from the AB, that need to be actioned before next Monday (4 week deadline. Includes revising inventory to include instructions for posting ontologies on the OMG site ­ received from Pete Rivett.  Also provide redlined FND spec, for the AB. MB is doing this, Will get Doc number, which Elisa needs for the inventory. MB and EK to discuss required doc numbers needed. After this call. No other changes are required for FBC by 7th. Will charter a FTF for FBC at the end of the OMG week. Those of you who are OMG members are invited to participate. Would still take comments from anyone who  will submit them, on FBC.


Securities status:  current version of Securities ontology that we worked on before splitting FBC out, are now in GitHub Pink as well. Elisa has spent time over the last 2 weeks, updating these to reflect the latest version of FBC.  So these should also work correctly in Pink. Members encouraged to look at those and make suggestions for revision.  These can be opened directly from Pink or Elisa can send people a zip file on request.  We will walk through that today. New FCT members: please let us know if your org is not on the list on Slide 3. Shannon Walker is the team lead who Gareth and Tracy report to. Will be more involved going forward.17 Let us know if you need further guidance and introduction to things, including the Holy Trinity (GitHub, Wiki, JIRA. Lucy Opsitnik ­ observer here. Participates in Loans WG. Please send any documentation on this group.


Background: started on Securities over a year ago, extended this to financial instruments more generally. A lot of the material we worked on, which was common to securities, derivatives, other instruments classes, and Loans, was moved to the new FBC. Includes financial instruments, regulatory agencies, registration authorities and so on. So these were moved into the new FBC. That is the basis of the spec we submitted as the new RFC. Also available as a spec on the FBC space on the EDM Council Wiki. Company is called Statistics Canada. Changes for reconciling with BE ­ can wait till January, assuming BE itself is submitted for December next week. We will look at those when BE is submitted. This is outstanding issues.


Slide 4. See list there. Need a higher level definition of Holding that is not in the Securities ontologies at this point. FCB are working on EU stuff. Gareth has everything he needs for this. FCB DB LEI ­ working on. Don't need to reflect the repository management details but must have the relevant concepts for financial institutions and other legal entities, counterparty exposure requirements and soon. Will add that ontology and test with information from some banks to make sure this works. Will also get Nordea to help test these. Tweaking issues, definition reviews etc. These are all things for the FBC FTF to do once it is chartered.  

Slide 5 additional comments over the weekend.


JIRA Issues Review:


FBC­59:  Currently unassigned. Definition of Financial Instrument. The definitions we found, including that of BCBS, is tightly entwined with that of financial asset. Financial Instrument is defined in the ontology as being a kind of written contract. (was previously a logical union, per ISO 20022 definitions CFI definition, but intended meaning has changed). What was agreed in this group was a kind of arrangement, but the definition we see was not agreed, it was determined that we would put this as a placeholder. Also needs to be reframed in ISO 774 definition format. Should begin with "a written contract that..." Definition should be terse, additional clarifications should be in separate note sanotations. Do Gareth and DB want to take a crack at this?  Yes. EK will send them the Thematix metadata guide to help with this. There is an IAS definition which Gareth quite likes.  Gareth suggests this should be kind of Financial Agreement. MB agrees, noting that not all the things we think of as financial instruments are necessarily written contracts, for instance OTC derivatives trades. If these are to be considered by the group as being financial instruments, then we need to do as Gareth suggests. IAS is in the accounting standards ­ talks in terms of an asset and a liability. But does that create an independent definition of a financial instrument?  But what if this is not owned by anyone? We have to be sure that FI definition is independent of who owns the thing or whether it is owned ­ it is an economic resource or something that can become an economic resource, and the commitments are commitments without reference to which party they are recorded for as an asset or liability on their books. Would like to get close to something that exists today. What is there is too fuzzy, is convoluted and hard to read. We need to clearly identify the intended difference between the original ISO friendly definition and what is required here. We all seem to agree that a higher level thing, e.g. an agreement, would be appropriate. There was no business reasons for the change in meaning of Financial Instrument, only a technical reason. so the technical reason for making that change, could be met by a concept of financial instrument that is a child of Agreement rather than Written Contract, and then Elisa's technical requirements can be with minimum change to the business meaning. There was no business reason for the original change in meaning. Gareth will take the action on this issue 59.


ISO Strategy ­ possibly a broader FIBO / FLT or FPC discussion, but Gareth has raised it here for the record. FBC­75: This one covers US jurisdiction segregation to different folders. Question was whether a new IRI strategy was needed. The reason not to, was to adhere to the OMG standard IRI policy. This replaces it has and EDMC­FIBO replaces fibo. We can add new sub domains after FBC ,or the examples don't go through OMG. The problem with that is we would have to manage those separately. Elisa prefers we manage everything in lock step. Also people at OMG who are adopting the spec will also need the examples. So Elisa recommends that we don't manage examples separately. Adding an examples sub­domain after 'spec' is also an option. That strategy wasn't discussed at the time. The concern is that people may accidentally use or extend beyond these, if it is not clear what is real and what is exemplar. Need to distinguish examples for the purpose of understand the ontology, and reference data which is stuff we expect people to actually use. The fact that the examples were all real does makes it harder to distinguish.  However the examples, while they are real data, is real data as of now not something we would maintain, whereas the content stuff we would maintain. To talk about on Leadership team. Other teams would have the same requirement.  


Also several classes have, not definitions but explanatory notes, that are US specific . This was due to what was available to the modeler. A concept like Bank does not seem to be different in the US versus elsewhere, but the explanatory notes are from US material. Also stuff specific to a federation, such as "state bank" which would apply to US, Canada, Brazil etc. but not non federal countries.  DB: There are different rules about how you classify what is a bank, on a jurisdiction basis, e.g. Japan.  Therefore rather than "a bank" it is "a bank in they eyes of" the USA, Japan, and so on.  We did that in the US jurisdiction e.g. commercial bank, industrial bank and so on. Also in the UK there are Building Societies. If a Bank is a functional Entity, we can add an assertion that they are recognized by, and are given the authority by, some jurisdiction, to provide some defined service, namely the service of banking. Elisa notes it is a lot of work to add banking service areas, which they had considered doing. MB note that BIAN has exactly these, so that work is done. Action MB to send BIAN work along to Elisa. And, get formal permission fro BIAN to use these (we have had discussions with them already).  There are 24 of these.  We do not want to make Bank a jurisdiction specific concept, as the concept is global. We want the definition itself to not be US specific or to be federal country specific.


 FBC­74 refers FBC­nn naming of non depository institutions. Suggestion is to have a name that is not framed negatively. Pete Rivet:  Most regulatory stuff makes that distinction using the language of nondepository. Should we distinguish buy­side versus sell side at this point? The collection of things that are non depository is a kind of catch all. These are defined in the US regulation in this way.  Is non depository simply inferred rather than being a coherent category of thing? Investment bank is somewhere in the middle. Have we considered any of the international classification systems when defining these things? We had assistance in doing this from Wells Fargo. These terms were not in the original FIBO. Wells was insistent on this hierarchy. We need to flexible enough to adapt to other needs. Wes Moore was the original SME on this, and does have securities trading background. Used US law for the definitions of these. The Bank of England has extensive literature on this stuff. MB to look at the BoE literature for these concepts. Also UCC in Cork have reviewed these concepts. They have a good legal department of SMEs, with exposure to EU legal concepts. Gareth's aim was to find out whether it is possible to be, anywhere in the world, both a non depositary and a depository institution. We did not go down to the level of buy side versus sell side, but did have a concept of Investment Institution somewhere in the middle of this. Have used Barron’s as our source. Defines something that doe not take deposits or provide depositary services. Internal Standard Industrial Classification is the one we should refer to. Lucy Opsitnik: this is North American. But it does cover the same general ideas. We would use the ISO classification to define the boundary of a specific level of detail. Link to a list of systems:


Review what is in Securities. Includes e.g. Security Classification. This was what led us to define a classification schemes ontology in Foundations.  Basket ­ used in various instrument types.  Securities issuance ­ defines offerings, documents etc. RB and EK have taken a pass at all these pre FBC.  What's there reflects that work and the integration of this with the current FBC.  Everything in Pink in GitHub under Securities now loads.  Includes stuff that was originally in a portfolios ontology and a securities assets ontology.   Listings needs another pass to see if MTF is included. Some may have moved, some not.  Please could people download this and look at it or next week's call. 


Also EK and RB to discuss triage on this stuff.  There are some ontologies we have done nothing with and may pass on for now. Pools not needed yet (needed for asset backed) Schedules may be obsolete as we did a new one of these.  Extras is some left overs. Identification ­ may need to move that forward. There are individuals for identification e.g. IIN, CUSIP, will also now need to cover FIFI Issuance we have Securities restrictions is e.g. restricted share (Reg S, 144A and so on). Risk not sure. Tax treatment ­ may want to defer. Discussed that before we split off FBC.15 We should go back and see if our view has changed on these. other 2 areas for SEC:Equitis ­ there are a number of ontologies in there, need to revisit. Changes in FBC and Securities. Debt ­ includes bonds and money market and ABS. MoneyMarkets renamed to ShortTermDebt.   Challenge: SMEs care near term about Bonds. So we might want to move Debt forward.


FCT will need to help co­ordinate what should be in SEC for stuff common across all securities. Use Cases is in good shape.


Homework ­ please review everything in SEC in Pink. Next meetings: We meet again 9 Nov.   Work through some FBC open issues, spend increasing amount of call on securities stuff. Will then have what is needed for the FBC FTF, which will then have its own call schedule.  So a little of each between now and Jan, then from Jan this meeting will be securities only.


 December call ­ we will decide nearer the time. Typically we don't meet the week after OMG but that would mean having no meeting in Dec.27 Encourage DB to send someone to La Jolla, CA for the Dec meeting.  See link on the front page of under Schedule of Events.

Action items

  • Mike Bennett  MB note that BIAN has exactly these, so that work is done. Action MB to send BIAN work along to Elisa. And, get formal permission fro BIAN to use these (we have had discussions with them already).  There are 24 of these.  We do not want to make Bank a jurisdiction specific concept, as the concept is global. We want the definition itself to not be US specific or to be federal country specific. This is JIRA FBC-74 subtask. FBC-74 - Getting issue details... STATUS