Standardisation put to the test: How reference data standards have evolved in an era of unprecedented regulatory and technological change

Abstract

Reference data standards are the backbone to financial markets, providing a single source of truth for security and entity identification that is universally accessible whether market participants are working with equities, fixed income or derivatives. That reliability and consistency are constantly challenged by the forces of regulatory and technological change, which have pushed standards bodies and national numbering agencies around the world to continually innovate around existing standards and press forwards to develop new ones that meet the evolving needs of the marketplace. This paper chronicles the refinement of existing standards and the development of new standards over the last decade, spotlighting the evolution of the international securities identification number (ISIN) to identify derivatives in the post Markets in Financial Instruments Directive II (MiFID II) marketplace, the development of the legal entity identifier (LEI) in response to the failure of Lehman Brothers, the growing use of existing standards in the blockchain ecosystem and the ongoing development of a standardised approach to syndicated loan identification.