FMSB updates standard for sharing of standard settlement instructions

The Financial Markets Standards Board (FMSB) has published an updated version of its standard for sharing of standard settlement instructions (SSIs), together with updated SSI templates. The standard aims to increase the adoption of electronic solutions that allow for standardisation and pre-authentication of settlement instructions, and facilitate straight-through processing, to improve the efficiency of SSI management by recipient counterparties and reduce settlement fails through incorrect SSIs. It sets out nine core principles relevant to the sharing of SSIs, covering: use of industry platforms; off-platform; timing; data fields; data format; data validation; validity; governance and responsibility; and periodic review. Where such electronic solutions are not legally or operationally feasible, the standard provides templates for the manual sharing of SSIs.

Updated FAQs published alongside the updated standard and templates acknowledge that it may not always be possible to comply with the standard in all circumstances and at all times in core principle 9 (periodic review). There is an explicit carve-out for automation for sharing of SSIs where it is not "legally or operationally feasible", and for clarity purposes, the FMSB has now introduced a similar carve-out in core principle 2 (off-platform) for non-use of the template. The FAQs provide the following examples of situations under core principle 2 to which this carve-out may apply:

• Markets which require a local broker and/or custodian to access, where use of the template is not accepted by those actors.
• Markets in which regulations around data transmission and/or storage may prohibit the use of the template.
• Markets in which a regulator, market infrastructure, custodian or local agent mandates a specific form, format, or submission channel that is fundamentally incompatible with the FMSB template.

The FAQs also state that any exemption should be based on a genuine and documented legal or operational constraint, rather than local preference and should be reviewed at least annually as per core principle 9. Additionally, the FAQs confirm that the standard and templates have been recognised by both the EU Industry Committee for T+1 and the UK Accelerated Settlement Taskforce as supporting more efficient settlement processes, particularly in light of the planned move to T+1 settlement in the UK and EU in 2027.

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