International Securities Association for Institutional Trade Communication

What Is the International Securities Association for Institutional Trade Communication (ISITC)?

The International Securities Association for Institutional Trade Communication (ISITC) is an industry organization of financial institutions and technology suppliers that work to work on the operational effectiveness of the financial industry.

The ISITC functions by introducing and maintaining communication protocols expected to work on the speed and reliability of financial transactions. Starting around 2022, ISITC has 52 member firms.

Understanding the ISITC

The ISITC was established in 1991 and is known for advocating the adoption of new, more efficient technology standards. Throughout the 2000s, the ISITC was a leader in distributing best practice guidelines for the industry. This remembered market practices for support of ISO standards, custody holdings reconciliation rules, settlement requirements for the MT548 standard, and numerous others.

The mission of ISITC is to connect with the collective expertise of its global community of securities operations and technology experts to create a platform to collaborate on key initiatives in financial services operations.

ISITC and Straight-Through Processing

The ISITC was additionally active in promoting the adoption of new technologies, including automatic payment processing systems like Straight-Through Processing (STP).

STP was invented in the mid 1990s and empowers the automation of transaction processing tasks in the equity markets. Financial institutions can utilize STP to reduce the time required to settle transactions. During the settlement cycle, STP permits transaction information to be transmitted electronically starting with one party then onto the next without requiring manual re-entry of information at each stage simultaneously. This speeds up transactions while reducing the risk of human error.

Currently, numerous financial transactions take several days to complete in light of the fact that a few stages in the process are still completed manually by human actors. By empowering the adoption of STP and comparative protocols, the ISITC attempts to work on the reliability and proficiency of financial markets. Rather than taking days to complete, STP can empower transaction settlements within a day, minutes, or even seconds.

ISITC Stakeholders

The ISITC is a nonprofit organization whose membership consists of financial institutions engaged with different aspects of the transaction settlement process. These incorporate investment managers, asset custodians, specialist/vendors, and technology platform suppliers.

Other ISITC Initiatives and Activities

Not long after their establishing in 1991, the ISITC created an advanced electronic communication protocol for trading mortgage securities. In less than a year, the new format replaced legacy delivery methods, like fax, Telex, and manual re-keying. This new electronic format before long turned into the industry standard, leading the way for comparative changes in other industry sectors.

In 1995, the ISITC's initiatives assisted move the standard settlement with cycling from T+5, short for "trade date plus five days," to T+3. Today, further progress has been made, with the market operating on a standard T+2 cycle.

In 2012, the ISITC sent off a working group worried about directing international regulatory policies for the global financial markets.

Highlights

• The International Securities Association for Institutional Trade Communication (ISITC) is an industry trade group zeroed in on creating standards and best practices in financial services operations,
• The ISITC was established in 1991 and is known for advocating the adoption of new, more efficient technology standards.
• By empowering the adoption of Straight-Through Processing (STP) and comparable protocols, the ISITC attempts to work on the reliability and productivity of financial markets.