Securities Market Practice Group
 
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About Securities Market Practice Group
http://smpg.webexone.com

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Securities Market Practice Group (SMPG)

SMPG was created in July 1998 and since its inception has established a local presence in more than 30 countries through National Market Practice Groups (NMPG). These groups are comprised of broker/dealers, investment managers, custodian banks, central securities depositories and regulators. SMPG has been extremely successful in creating globally agreed harmonised market practices which, integrated with ISO standards has brought the securities industry closer to achieving Straight Through Processing (STP).

The SMPG is focused on enhancing the current securities industry practices. This group realizes the benefit of industry utilities and other industry groups in dictating conformance to standards and market practices. As such, there is active dialogue between the SMPG and other industry groups/organizations(ie, OMGEO, ECSDA, ACSDA, ISITC, ISSA, etc). 

Securities Market Practices

Market Practice Rules for existing securities messaging standards, have been historically defined after industry participants have implemented the standards. To further complicate industry information flows, each industry participant defined these rules separately and differently. This has resulted in an inefficient exchange of information, whereby standards and their associated market practice rules have been interpreted and implemented differently by every industry participant in each geographic market. This inefficient exchange of information within and across different markets has limited Straight-Through-Processing (STP) in the securities industry.

SMPG Process

The SMPG is open to all participants interested in creating globally agreed market practices for the securities industry. This objective includes the harmonisation of non-regulated geographic differences, as well as consistent implementation by securities industry participants for processing within and across all markets. Monthly meetings of the NMPGs, and the 2 physical meetings per year of the SMPG as well as periodic conference calls, cover issues ranging from "standardised methods of informing custodians to transfer securities" or "resolution of cross-matching at central securities depositories", to the creation of NMPGs in non-participating countries or the development of multi-year project plans.

The detail process begins with the NMPGs’ analysis and documentation of local practices. SMPG then collates common elements, specifies additional country requirements, and identifies further opportunities for harmonisation of non-regulated differences. After final review and refinement by the SMPG, the documents are published on this site.

SMPG Accomplishments

To date SMPG has produced a significant number of market practice recommendations within Trade Initiation/Confirmation, Settlement, Reconciliation and Corporate Actions. Additionally, SMPG has since expanded to define market practices for the Investment Funds industry.  

Some of the key market practices defined includes: 

  • Comprehensive Place of Settlement Listing and corresponding market practice usage
  • Common Element listing of values for Settlement
  • Statement of Holdings and Transaction
  • Block Trades
  • Status Message and Pending Transaction recommendation
  • Repo – One message vs. Two message
  • Corporate Action Event Interpretation Grid
  • Proxy Scenarios   Successfully recommend use of the new suite of Proxy Messages in 20022
  • Consistent Usage and Placement of Key Data Elements for Corporate Action Events (‘the DvsE Guidelines’)
  • Corporate Action Notification, Instruction, Confirmation and Status market practices
  • Order, Execution, Allocation and Trade Confirmation market practices
  • Etc...

NMPG – as of Jan 2011

Austria, Australia, Belgium, Brazil, Denmark, Canada, China, Egypt, Finland, France, Germany, UK and Ireland, Greece, Hong Kong, Iceland, Israel, Italy, Japan, Luxembourg, Mexico, New Zealand, Norway, Poland, Portugal, Russia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, The Netherlands, Turkey, Ukraine, United States and the Eurobond Markets.

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