ISO/DIS 10962

Securities and related financial instruments -- Classification of financial instruments (CFI) code

Valeurs mobilières et autres instruments financiers concernés -- Classification des instruments financiers (code CFI)

Standards Content (sample)

DRAFT INTERNATIONAL STANDARD
ISO/DIS 10962
ISO/TC 68/SC 8 Secretariat: SNV
Voting begins on: Voting terminates on:
2020-07-20 2020-10-12
Securities and related financial instruments —
Classification of financial instruments (CFI) code

Valeurs mobilières et autres instruments financiers concernés — Classification des instruments financiers

(code CFI)
ICS: 03.060
THIS DOCUMENT IS A DRAFT CIRCULATED
FOR COMMENT AND APPROVAL. IT IS
THEREFORE SUBJECT TO CHANGE AND MAY
NOT BE REFERRED TO AS AN INTERNATIONAL
STANDARD UNTIL PUBLISHED AS SUCH.
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This document is circulated as received from the committee secretariat.
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NATIONAL REGULATIONS.
ISO/DIS 10962:2020(E)
RECIPIENTS OF THIS DRAFT ARE INVITED
TO SUBMIT, WITH THEIR COMMENTS,
NOTIFICATION OF ANY RELEVANT PATENT
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PROVIDE SUPPORTING DOCUMENTATION. ISO 2020
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ISO/DIS 10962:2020(E)
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© ISO 2020

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ii © ISO 2020 – All rights reserved
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ISO/DIS 10962:2020(E)
Contents Page

Foreword ........................................................................................................................................................................................................................................iv

Introduction ..................................................................................................................................................................................................................................v

1 Scope ................................................................................................................................................................................................................................. 1

2 Normative references ...................................................................................................................................................................................... 1

3 Terms and definitions ..................................................................................................................................................................................... 2

4 Conventions and principles ....................................................................................................................................................................... 3

4.1 Category ........................................................................................................................................................................................................ 4

4.2 Group ............................................................................................................................................................................................................... 4

4.3 Attributes ..................................................................................................................................................................................................... 4

4.4 Semantic model of the external code list for the CFI .............................................................................................. 5

5 CFI code allocation .............................................................................................................................................................................................. 7

5.1 General ........................................................................................................................................................................................................... 7

5.2 Existing CFI codes and existing financial instruments without a CFI code ........................................ 7

6 Maintenance .............................................................................................................................................................................................................. 7

Annex A (informative) Classification examples......................................................................................................................................... 8

© ISO 2020 – All rights reserved iii
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ISO/DIS 10962:2020(E)
Foreword

ISO (the International Organization for Standardization) is a worldwide federation of national standards

bodies (ISO member bodies). The work of preparing International Standards is normally carried out

through ISO technical committees. Each member body interested in a subject for which a technical

committee has been established has the right to be represented on that committee. International

organizations, governmental and non-governmental, in liaison with ISO, also take part in the work.

ISO collaborates closely with the International Electrotechnical Commission (IEC) on all matters of

electrotechnical standardization.

The procedures used to develop this document and those intended for its further maintenance are

described in the ISO/IEC Directives, Part 1. In particular, the different approval criteria needed for the

different types of ISO documents should be noted. This document was drafted in accordance with the

editorial rules of the ISO/IEC Directives, Part 2 (see www .iso .org/ directives).

Attention is drawn to the possibility that some of the elements of this document may be the subject of

patent rights. ISO shall not be held responsible for identifying any or all such patent rights. Details of

any patent rights identified during the development of the document will be in the Introduction and/or

on the ISO list of patent declarations received (see www .iso .org/ patents).

Any trade name used in this document is information given for the convenience of users and does not

constitute an endorsement.

For an explanation of the voluntary nature of standards, the meaning of ISO specific terms and

expressions related to conformity assessment, as well as information about ISO's adherence to the

World Trade Organization (WTO) principles in the Technical Barriers to Trade (TBT), see www .iso .org/

iso/ foreword .html.

This document was prepared by Technical Committee ISO/TC 68, Financial services, Subcommittee SC

8, Reference data for financial services.

This fifth edition cancels and replaces the fourth edition (ISO 10962:2019), which has been technically

revised. The six-character hierarchical structure remains unchanged from the previous version.

The main changes compared to the previous edition are as follows:

— The CFI code list has been removed from the specification and moved to an external code list.

— The structure of the CFI and content of the code list are captured in the form of a machine-readable

semantical model of the code lists and their values. It is important to understand that this is a

semantic representation of the CFI hierarchical structure and not a canonical semantic classification

of financial instruments, which is beyond the scope of this standard.

— The CFI external code list will be maintained and published by the ISO 10962 Maintenance agency,

who shall be responsible to manage the modification and enhancements to the code lists, their

values and corresponding descriptions.

The Maintenance agency shall be responsible for publishing the CFI code list. The CFI external code

list will be published in a selection of human-readable and machine-readable data formats, (e.g.,

spreadsheet, PDF, CSV, JSON-LD, TTL) at the discretion of the Maintenance agency https:// www .iso .org/

maintenance _agencies .html .
A list of all parts in the ISO 10962 series can be found on the ISO website.

Any feedback or questions on this document should be directed to the user’s national standards body. A

complete listing of these bodies can be found at www .iso .org/ members .html.
iv © ISO 2020 – All rights reserved
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ISO/DIS 10962:2020(E)
Introduction

The International Organization for Standardization (ISO) draws attention to the fact that it is claimed

that compliance with this document may involve the use of a patent.

ISO takes no position concerning the evidence, validity and scope of this patent right.

The holder of this patent right has assured ISO that he/she is willing to negotiate licences under

reasonable and non-discriminatory terms and conditions with applicants throughout the world. In

this respect, the statement of the holder of this patent right is registered with ISO. Information may be

obtained from the patent database available at www .iso .org/ patents.

Attention is drawn to the possibility that some of the elements of this document may be the subject of

patent rights other than those in the patent database. ISO shall not be held responsible for identifying

any or all such patent rights.

The Classification of Financial Instruments (CFI) code was developed to address several problems

that concerned the financial community. With the growth of cross-border trading, the requirement to

improve communication of information among market participants had become critical.

The business problems centred around an inability to obtain information on financial instruments due

to the lack of a consistent and uniform approach to grouping financial instruments. With the explosive

growth over the previous 20 years in new instruments and features attached to financial instruments,

a serious communication problem had developed.

Many market participants were using similar terminology for instruments having significantly different

features. This problem was compounded when market participants looked beyond their own national

markets where they encountered the same words used to describe instruments with significantly

different features. Where the terminology was in a different language, market participants encountered

additional problems of translation, which could also be misleading.

In addition, the customs and practices of local markets varied considerably in how they structured

financial instruments, often leaving foreign participants perplexed. On careful analysis, it was often

found that the characteristics and features of these instruments were similar to domestic instruments.

However, most market participants did not have the time and resources to do this analysis.

The inability to group financial instruments in a consistent manner was another problem encountered

by market participants. Reports of holdings by different sources for similar financial instruments

often resulted in those instruments being categorized differently. This not only affected comparability

but caused a credibility issue with the reader. When relative performance is measured, the ability to

properly categorize holdings is essential if true comparisons are to be made.

A twofold solution was developed to address these problems. One was to establish a series of codes that

classify financial instruments having similar features. The other was to develop a glossary of terms

and provide common definitions that allow market participants to easily understand the terminology

being used.
The benefits derived are many.

— The CFI code system provides a set of codes for financial instruments that can be used globally

for Straight Through Processing by all involved participants in an electronic data processing

environment. For example, readers of portfolio holdings see reports from different sources using

the same categories, groups and attributes, making the comparison of instruments more credible.

— The use of these codes increases the efficiency, reliability, data consistency and transparency of

financial services transactions for both market and reference data. Classifying financial instruments

in a consistent, structured and standardized way is also beneficial for regulatory reporting

requirements.
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ISO/DIS 10962:2020(E)

— The broadened scope and coverage of CFI codes encourages market participants to take advantage of

other international standards, particularly international securities identification numbers (ISINs).

— It is intended that the improved understanding of the characteristics and categorization leads to

a better understanding of financial instruments. This leads to more active markets and improved

market liquidity. In addition, these codes are displayed on websites using internet technology, which

has allowed the growth of e-issuing, e-trading and e-settlements.

— The CFI code system can further serve as a basis for the classification of financial instruments for

industry risk aggregation and regulatory reporting.
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DRAFT INTERNATIONAL STANDARD ISO/DIS 10962:2020(E)
Securities and related financial instruments —
Classification of financial instruments (CFI) code
1 Scope

This International Standard defines and describes the structure for the codes for an internationally

valid system to classify financial instruments. The classification system applies to financial instruments

negotiated internationally as well as to domestic instruments. The term “financial instruments” refers

not only to classical securities and derivatives but also covers the innovative financial products that

have emerged in different markets (a trend that is expected to continue in the future).

This International Standard is intended for use in any application in the trading and administr

...