The Financial Instruments data Model (FIDM™) is designed to structure and present information on all financial instruments.
The concepts of FIDM™ were designed and developed by ECOFIN between 1987 and 1991. Between 1991 and 2000, the model was extended in collaboration with , Telekurs Finanzinformationen AG (now SIX Financial Information AG) and representatives of Credit Suisse and UBS.
The first licensee of FIDM™ back in 1991 were SIX Financial Information AG, UBS AG, Credit Suisse, smaller Swiss private banks and the German data provider Wertpapier-Mitteilungen GmbH.
After the year 2000, major financial institutions around the world – banks, insurers, data vendors, clearing houses, hedge funds, software houses – adopted FIDM™ to structure their databases and to improve their application development.
FIDM™ consists of six core areas (“packages”).
FIDM™ provides a comprehensive description and consistent nomenclature of the properties of financial instruments. This description can be used for a range of purposes, such as:
Structuring of Financial Instrument Databases
FIDM™ is a comprehensive and consistent concept for structuring information on financial instruments and therefore can serve as a blueprint for complete financial instrument databases.
In Switzerland, the financial instruments data bases of both the major banks and SIX Financial Information AG are based on FIDM™. Also a large number of companies in the financial sector are users the Value data Feed VDF of SIX Financial Information AG and therefore in part are familiar with FIDM™.
When developing a large software system, such as a core banking system, a uniform systematic nomenclature is a key element of long-term success.
FIDM™ and the data model for description of positions and transactions, the “Middle Office data Model” (MODM), provide such uniform nomenclatures for the entire securities operations of financial service providers (banks, insurers, stock exchanges, clearing houses, etc.).
Digitization of Front-Office and Back-Office
The digitization of banks will quickly spread out to Front and Back Offices.
In the transition period, the success or failure of this process will be decisive for the future of the banks, but at the end of the process, digitization will become a standard and will not be a differentiating property of banks anymore.
A key prerequisite for successful management of the transition process is a consistent nomenclature and a comprehensive description model of the properties of financial instruments. This is precisely what FIDM™ offers.
Risk Consolidation and Risk Reporting in Banks (BSBC 239).
During the financial crisis, it was found that many banks were not in a position to bring together position, price and risk data from, in some cases, hundreds of database to enable proper risk control and management of the bank.
In 2013, the Basel Committee on Banking Supervision of the Bank for International Settlements (BIS) issued new principles and thereby massively increased the regulatory requirements for effective aggregation of risk data and for risk reporting (BCBS 239).
FIDM™ and the data model for description of positions and transactions, “Middle Office Data Model” (MODM), provide the ideal basis to meet these requirements.
Implementation of BCBS 239 in particular requires a consistent database or a system distributed databases for all financial instruments and positions. Implementation therefore requires exactly the same activities as required for development of a securities database and a position database.
The data models are the decisive factor for the success of the implementation of these databases. The data models form the basic structure for the necessary calculations and for aggregations over bank divisions and beyond. FIDM™ and MODM have been specially developed to provide an overall view of all positions, for the valuation of financial instruments and for calculating the required key figures. These data models thus form an ideal basis for meeting the requirements of BCBS 239.
The data models FIDM™ and MODM enable financial institutions to carry out key tasks within the BCBS 239 requirements:
- Establishing a target vision: how shall the contents and organization of a large number of securities databases look like in the future?
- Establishing of a bank-wide uniform nomenclature and of unique identifiers
- Documentation of existing data models, the actual data content, data processes and data flows
- Elaboration of a concept for a stepwise transition from the existing data models and data content to the uniform data architecture
- Definition of data governance at executive level including competences and resources.
With support by ECOFIN, the uniform data architecture and the transition of the data contents according to the requirements of BCBS 239 can be managed within a reasonably short period.
«State-Of-The-Art» Valuation of Financial Instruments
Correct valuation of financial instruments requires all conditional and unconditional cash-flows of these instruments to be taken into account. The necessary information is available from a database structured according to FIDM™.
“UNBUNDLING” OF FINANCIAL INSTRUMENTS
It was already known by the 1970s from scientific work by Stephen A. Ross that even highly complex financial instruments can be built from simple cash-flow structures.
In the late 1980s ECOFIN IT and finance specialists, in close collaboration with leading Swiss banks, applied this “unbundling” approach within the framework of FIDM™, to obtain detailed descriptions of any type of financial instruments.
Due to this modular principle, it is ensured that also future financial instruments can be described in the model and that the core of FIDM™ will still remain stable.
SCOPE AND LEVEL OF DETAIL OF THE MODEL
FIDM™ is powerful enough in terms of scope and level of detail to meet the requirements of major investment banks around the world in the areas of risk and portfolio management, securities management and risk control.
FIDM™ is comprehensive, tried and tested worldwide, stable, future-proof and user-friendly with a strong international focus.
FIDM™ enables comprehensive descriptions of financial instruments, i.e. of their legal structure and cash-flows, as well as of associated institutions, company events, markets, prices and geographical details.
TRIED AND TESTED WORLDWIDE
FIDM™ is used by leading international banks, stock exchanges, clearing houses and data vendors. These clients have developed a wide range of applications in different areas that have proved successful in day to day business.
Financial market theory proves that – irrespective of their complexity – financial instruments can be represented as combinations of relatively simple individual building blocks that are easy to describe. This property and the modular design principle ensure that the “Financial Instruments Data Model” can still remain stable in a rapidly changing environment.
The model offers new possibilities for the development of modern bank applications. The potential afforded by modern financial theory can be fully exploited as all the data required can be recorded.
Even though highly complex financial instruments can be described with FIDM™, the descriptions are still easy to understand and intuitive due to the use of simple building blocks. Comprehensive documentation ensures fast, easy access to the subject for the user at all stages.
FIDM™ was developed right from the outset as a model to be used worldwide; the model therefore supports multiple currencies, languages, time zones, etc. National market rules are reduced to basic principles that can be interpreted in the respective context.
ECOFIN has been developing and constantly expanding FIDM™ since 1987 (from 1991 to 2000, i.e. from version 1.0 and with version 1.8.1, in collaboration with Telekurs Finanzinformationen AG, Zürich). The latest release 5.0 dates from January 2016.
Up to and including version 1.8.1, i.e. up to the year 2000, development was carried out with Telekurs Finanzinformationen AG and major Swiss banks. Version 5.0 has been available since January 2016. FIDM™ comprises some 5,000 descriptive elements.
Financial Instruments Data Model (FIDM™)
- Version: 5.0 (January 2016)
- Model Type: Unified Modeling Language (UML)
- Descriptive Elements
- CLASSES: 384
- ATTRIBUTES: 1843
- DOMAINS: 360
- ENUMERATION VALUES: 2050
- RELATIONSHIPS: 576
- Platform: platform-independent
Documentation is available in hard copy and on CD-ROM.
- Languages: English
The user manual is comprehensive and describes all aspects of FIDM™ in detail. In two volumes with a total of 1400 pages of text, explanations are provided of the techniques of modelling, the elements of FIDM™ with their background in financial economics and of all the relationships between the different areas of the model All classes, attributes and relationships are defined in detail; use of these is explained for a range of different situations. Illustration is provided by multiple graphics, supplemented by concrete examples. The user manual is available as a printed document and in electronic form. The electronic version in the form of HTML documents can be used with any Internet browser and enables quick navigation with the model definitions.
The data dictionary contains all the definitions of classes, attributes, relationships and domains with their corresponding enumeration values. The data dictionary is available as a print-out (1100 pages approx.) and in electronic format. The electronic version in the form of HTML documents can be used with any Internet browser and enables quick navigation through the model definitions.
Detailed UML Diagram
FIDM is represented comprehensively in an UML Diagram. All classes and their Relationships are visible at a glance. In addition, the User Manual contains about 200 diagrams showing the specific relationships between individual groups of classes. (oder wie MODM)
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