How FIGI relates to other standards in the space
Add an appendix that details how FIGI relates to key standards in the financial space. The expectation is that as existing standards evolve or new standards are viewed to be relevant, this appendix will expand though the revision process. The initial appendix shall read:
Appendix D: Other Standards in the Financial Space
While the Financial Instrument Global Identifier specification is intended as a stand-alone specification which is focused on the integrity of unique, persistent identification of Financial Instruments, the fact remains that there are standards in place at any given time that speak to Financial Instruments and may, therefore, intersect with or overlap with the FIGI specification. The purpose of this appendix is to provide some acknowledgement of those facts and to proactively counter any confusion that might arise. To that end, this appendix will consist of a listing of the relevant standards and a brief treatment of the relationship between those standards and FIGI. Again, as there are constantly emerging and evolving standards, it is expected that this appendix will change over time as part of the revision process.
D1. ISO 6166 (ISIN)
The ISIN standard overlaps with the FIGI standard in that it, too, seeks to assign unique identifiers to Financial Instruments. It differs, however, from the FIGI in a number of critical ways which will be explicated below. Because of the overlap and the differentiation, FIGI and ISIN can be viewed as complimentary, rather than competing, standards.
The ISIN and the FIGI differ in three broad ways:
1. Scope: The FIGI provides, both in practice and in future implementation, a much broader scope than does ISIN. In particular, FIGI identifies not only securities, but, potentially, all financial instruments. The reason that the scope is so much broader is a function of purpose: the ISIN is focused on serving as a reference for a fungible instrument at the initial issuance level, which serves a proper and needed function in and of itself. FIGI, in contrast, while capable of serving in that capacity, is focused on providing a consistent and unique data point that serves to identify financial instruments and the different contexts they exist in throughout their lifecyle, so as to enable robust and comprehensive data management and, from that, compliance.
2. Granularity: The ISIN provides a single identifier at the single issued level for a fungible instrument. FIGI, in contrast, provides not only that in the form of the Share Class Global Identifier (hence the overalp), but also at the country level through the Composite Global Identifier, and, where applicable, at the trading venue level as well.
3. Persistence: Corporate actions, such as name changes, acquisitions, corporate relocations, and so on, can result in the need for an ISIN to change. This is not intended as part of the ISO 6166 specification, but is a function of the distributed delivery system for ISINs. Such is not the case with FIGIs in that the characters present in the FIGI string are, with the exception of the check digit, entirely meaningless. As such, there is no hidden reference to the currency, market or country location, or company name present in the identifier—a condition which is consistently present in ISINs.
Organizations that are licensed to use ISIN are free to map between FIGI and ISIN at the Global share class level. Indeed, this is a common practice. Owing, however, to licensing restrictions on ISIN (though not on FIGI), such mappings cannot be freely redistributed.
D2. ISO 10962 (CFI)
The Classification of Financial Instruments (CFI) code is a six character string that serves to classify financial instruments both at a high-level, e.g, debt instruments vs equities, and through their attributes, e.g., fully paid vs partly paid. In a sense, this can be viewed as related to the Security Type vocabulary that is part of the FIGI specification. The mechanism by which the distinctions are made, beyond the top levels, however are very different and so these should be viewed as complimentary classification systems.
The mechanism by which CFI distinguishes between Financial Instruments at the granular level is largely a function of the legal distinctions that govern the acquisition and disposition of such instruments. For example, Future Contracts will be differentiated by whether the terms are standardized or non-standardized. In contrast, the different security types that inform FIGI reflect the manner(s) in which a financial institution would classify their positions for multiple operational and regulatory reporting purposes, and may be influenced by jurisdiction.
As with other standards, it is possible, indeed common, for organizations to map their holdings to both the FIGI listing of Security Types and to CFI. Distribution of the CFI mapping is not, however, part of the FIGI specification, nor it is required as part of FIGI compliance within the standard (though it is not precluded).
D.3 ISO 20022 (UNIFI)
ISO 20022 is a messaging standard what specifies the structure of a metadata repository containing descriptions of messages and business processes. The relationship between ISO 20022 and FIGI is potentially an intersecting, rather than overlapping, relationship. In particular, given that the identifiers associated with FIGI are, potentially, items that would be embedded in messages used within the financial sector, there is the potential that FIGI would be formally recognized as having a place within ISO 20022. Strictly speaking, however, ISO 20022 and FIGI are entirely independent of one another as they seek to do very different things.
D.4 ISO 10383 (MIC)
The Market Identifier Code (MIC) provides a universal method of identifying exchanges, trading platforms, and regulated or non-regulated markets as sources of prices and related information for Financial Instruments. This function overlaps with parts of FIGI, in particular, the Pricing Source. As with ISIN, there are key differences.
1. Scope: The MIC provides identification of places where securities can be, broadly speaking, bought and sold. As such, it only applies to tradable securities that are exchanged at a venue (broadly understood). The list of pricing sources present in FIGI goes far beyond this to support Financial Instruments that are not exchanged at a venue. In fact, FIGI can support Financial Instruments that are not tradable at all, e.g., an individual person’s home mortgage contract (not currently supported, but under consideration).
2. Embeddedness: The MIC code is a stand-alone code that identifies a Market. As such, it serves a different purpose than does the Pricing Source attribute of FIGI. The Pricing Source attribute of FIGI serves as a differentiator of otherwise identical financial instruments and that differentiation is embedded into the Financial Instrument Global Identifier. In the case of the MIC, it can be used in concert with the ISIN to deliver this to some level, but it is not fully embedded into the identifier’s meta data.
As is the case with other standards, there is nothing precluding any organization from mapping FIGIs to MIC codes. It is not, however, part of the formal requirements of the FIGI.