FIDM

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”).

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APPLICATIONS

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:

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.

APPLICATION DEVELOPMENT

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.).

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™.

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™.
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“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.

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ADVANTAGES

FIDM™ is comprehensive, tried and tested worldwide, stable, future-proof and user-friendly with a strong international focus.

COMPREHENSIVE

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.

STABLE

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.

FUTURE-PROOF

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.

USER-FRIENDLY

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.

INTERNATIONAL

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.

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VERSIONS

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.

TECHNICAL OVERVIEW

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

Die Dokumentation ist auf Papier und auf CD-ROM erhältlich.

  • Sprachen: Englisch

BENUTZERHANDBUCH

Das Benutzerhandbuch ist umfassend; es beschreibt alle Aspekte des FIDM™ im Detail. In zwei Bänden mit insgesamt ca. 1‘400 Seiten Text werden die Technik der Modellierung, die Elemente des FIDM™ mit ihrem finanzökonomischen Hintergrund sowie alle Zusammenhänge zwischen den verschiedenen Bereichen des FIDM™ erklärt. Alle Klassen, Attribute und Beziehungen werden einzeln definiert; ihr Gebrauch wird anhand verschiedener Situationen erläutert. Die Darstellung wird durch viele Graphiken und durch konkrete Beispiele ergänzt. Das Benutzerhandbuch steht als gedrucktes Dokument und in elektronischer Form zur Verfügung. Die elektronische Version in Form von HTML-Dokumenten kann mit jedem Internet-Browser benutzt werden und erlaubt ein schnelles Navigieren durch die Definitionen des Modells.

DATENKATALOG

Der Datenkatalog enthält alle Definitionen der Klassen, Attribute, Beziehungen und Wertebereiche mit den jeweiligen Aufzählungswerten. Der Datenkatalog steht als gedrucktes Dokument (ca. 1100 Seiten) und in elektronischer Form zur Verfügung. Die elektronische Version in Form von HTML-Dokumenten kann mit jedem Internet-Browser benützt werden und erlaubt ein schnelles Navigieren durch die Definitionen des Modells.

DETAILLIERTES UML-DIAGRAMM.

Das FIDM™ wird in einem UML-Diagramm umfassend graphisch dargestellt. Alle Klassen und ihre Beziehungen sind so auf einen Blick ersichtlich. Das Benutzerhandbuch enthält darüber hinaus ca. 200 Diagramme, die den Zusammenhang zwischen einzelnen Gruppen von Klassen darstellen.

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ANDREAS GLATTER

LIC. OEC. PUBL. ET. LIC. IUR.

+41 43 499 3040

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