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Thank you for participating in the meeting. Below are the
minutes and action items Attendees: Dan Eckert –Elliot Associates John Booth – Northern Trust Michael Burg – Bank of New York/Mellon Mark Reuter – Matthew Hawkings – Randy Magdaluyo – Steve Goswell – BGI Malene McMahon – Swift Marie-Paule Dumont – Swift Francoise Massin – Swift Robert Stowsky – Brookpath partners Marc Gratacos – ISDA Karel Engelen – ISDA Meeting dates, times and admin The group agreed going forward to meet every other Wednesday
at 11:00 a.m. NY time on alternating Wednesday’s from the business
process working group. The next regular meeting dates are August 8 and August
22. The dial-in details are fixed: Us: 888 481 3032 Non US: 617 801 9600 Code: 28413758 The e-mail address:
im-custodian@xxxxxxxx
can be used to send materials to the working group. The history of the e-mails
to the working group can be consulted on the FpML website in the working group
section: http://www.fpml.org/wg/mailarch.html Update on ISITC discussions: Karel updated the group on the discussions with Steve
Goswell. Work related to the market practice, specifically for investment
managers and custodians will be dealt with in the ISITC OTC derivatives group. Future topics for discussion The group went over the different topics for discussion that
have been brought forward. (see “Future agenda items” below). - Settlement information: This has been discussed in the CUG
group recently. From the IM-custodian side there is not immediate need to have
this information covered. Karel clarified that settlement information in FpML
would cover all information needed to do a settlement of a trade but FpML will
not cover actual payment messages. Marc specified that FpML currently provides
settlement information for some upfront payments. In addition, recent discussions
on this topic within the FpML community go in the direction of keeping the
settlement information separate from the trade/contract information. ISDA will
provide an overview to the group where currently in FpML it is possible to
specify settlement information with the payment information (upfront payments). - Definition and treatment of
amendments, cancellations and corrections: This falls within a broader
discussion that currently takes place in the FpML business process working
group and the coordination committee. The group indicated that for purposes of
the CUG a work around (contract id versioning) has been defined but the
expectation is that a more robust solution will be developed in the standard.
The IM-cust working group should be involved in these discussions. Feedback on the use of the contract
notification messages Besides the point noted above on the amendments, there is no
immediate feedback. We will keep this as a regular agenda point. The meeting
with the Swift CUG on August 23 will likely provide additional input as well. Processing of block trades In FpML there is currently a way to make the link, in the
trade structure, between a block trade and the allocated trades, using partyTradeIndentifier.
For the strict purpose of the contract notification process the group indicated
that this happens on the allocated trade level and that there is no need to
communicate block trade information. Robert Stowsky mentioned a case where an
IM communicates both the block trade and the allocated trade information for trade
events e.g. novations and terminations. Robert will distribute more information
on the specific use cases. One could think of a case where the IM outsources
the Middle Office function to a custodian and for that purpose would send block
and allocated trade information to the custodian. Although in a different process
than contract notification, this is still communication between an IM and a
custodian. Karel asked if the ISITC group would be interested to put together a
description of the different possible cases, Steve will take it back to the
ISITC otc derivatives group. Actions: -
ISDA - distribute info on settlement
information -
Robert Stowsky – provide examples
of use of block and allocated trade information -
Steve/ISITC – consider a description
of block trade - allocation scenarios that could be used as the basis to define
the process and messages in FpML From:
im-custodian@xxxxxxxx [mailto:im-custodian@xxxxxxxx] On Behalf Of Karel Engelen Dial in details for the meeting tomorrow, Wednesday August 1
at 11:00 a.m.: Us: 888 481 3032 Non US: 617 801 9600 Code: 28413758 Agenda: -
regular meeting schedule –time
and frequency -
update on discussions with ISITC -
feedback on use of contract
notification messages -
processing of block trades Future agenda items: -
feedback on use of
contract notification messages -
processing of
block trades -
use of short form versus need of MCA
information -
payment information -
Other IM-custodian business
processes -
definition and treatment of
amendments, cancellations, corrections -
Pricing information flows between IM
- custodian and third party vendors -
Valuations and reconciliations
between IM-Custodian and third party vendors From: Karel Engelen All, The next working group meeting is next
week Wednesday, August 1 at 11:00 a.m. NY time. I will circulate an agenda
later this week. Regards, Karel From: Karel Engelen Thank you all for your participation in the meeting today Attendees: Dan Eckert –Elliot Associates Fitnan Akahan – Morgan Stanley John Booth – Northern Trust Bradley Kuehn – Northern Trust Lucio Iida – BGI Mark Reuter – Bob Green- DTCC Ivan Djurkin – BGI Malene McMahon – Swift Marie-Paule Dumont – Swift Francoise Massin – Swift Cherie Graham - BBH Karel Engelen – ISDA Minutes Karel gave an overview of the discussions leading to the
formation of the working group. The intended goals of the working group include
a decoupling of the standards discussions with regard to contract notification
from the Swift CUG working group. The FpML group however is potentially broader
both with regard to participants (not limited to CUG participants) as with
regard to the scope. The Swift CUG implementation requirements form one set of
inputs with regard to prioritization and is one of the areas to receive
feedback from. Comments received during the call for participation are that the
scope should be broadened to cover parties active in the IM –custodian
world and their processes (e.g. dealers and their interaction with IMs and
custodians), rather than only IM and custodians. Previous discussions with Steve Goswell – ISITC have
indicated a concern of overlap between the work and the participants in this
group and the ISITC OTC derivatives working group. Two distinctive features of
the FpML working group brought forward on the call today are the fact that FpML
work (as opposed to broader best practices work) only can happen in an FpML
working group and that FpML is better positioned to bring in or link into
derivatives expertise. Coordination with existing group like ISITC but also
work that Swift and DTCC are doing is important. The IM custodian working group is a subgroup of the business
process working group (BPWG - chaired by Karel and Malene will co-chair the initial set of meetings,
with a goal to transition to industry co-chairs for the group. Next steps: The group will reconvene in 2 weeks time. The goal of that
meeting will be to set a priority for the issues to cover and to further
discuss industry dependencies as well as to agree on a schedule of meetings and
targets for a period of 4 months. Some of the issues to potentially cover and prioritize: -
feedback on use of contract
notification messages -
processing of block trades -
definition and treatment of
amendments, cancellations, corrections -
use of short form versus need of MCA
information -
payment information -
other – please let us know. . If you have any questions, do not hesitate to contact Malene
( Malene.McMahon@xxxxxxxxx) and/or myself (kengelen@xxxxxxxx).
For groups discussions you can use the e-mail address above (im-custodian@xxxxxxxx). Regards, Karel 212 901 6012 **************************************************************************************************************************
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