25 Oct 2002: Twist Publishes Standards for Corporate FX

Twist, a consortium of industry practitioners in the treasury workstation area, has published a set of standards governing communication between banks and corporate treasurers. The Treasury Workstation Integration Team’s standard has been designed to aid in the automation of messaging between counterparties in the foreign exchange and other cash markets, including loans and deposits.

Within the new standards framework, Twist has defined message formats for users of CLS, the electronic foreign exchange settlement system that began operations last month. The CLS element had not been included in the original specification for Twist’s messaging standard.

The new XML message standard defines data formats for support relationship set-up and management, trade origination, trade execution and confirmation, netting and settlement, and reconciliation and reporting. This includes the exchange of settlement instructions, credit checks, market data feeds, pricing of trades and trade negotiation.

Tom Buschman, treasury development manager for Shell Treasury Centre, a key promoter of the Twist standard, reckons the new standard will help in moving toward straight-through-processing (STP) in the treasury market. He has been encouraged by the level of take-up for the Twist standard in the treasury marketplace.

One early adopter of the standard is Barclays Capital. Barry Holland, operations manager at Barclays, cited the inclusion of CLS in the standards as one aspect of its appeal. He believes the Twist standard will help the bank realize increased efficiency and reduced operational risk through the adoption of STP.

Twist has also worked with the International Swaps and Derivatives Association (ISDA) and FpML.org on the Financial products Markup Language, as well as with the Financial Information Services Division (FISD) of the Software & Information Industry Association on its Market Data Definition Language (MDDL).