- New open source data standard for bond issuance systems launched by Origin with the support of Clearstream and the Luxembourg Stock Exchange
- The initiative provides a universal data language for post-trade market participants, with the aim of enabling straight through processing across the ecosystem by standardising data exchange, making communication more effective and the entire process more efficient, accurate and integrated
- Market participants invited to review and contribute to the standard’s development ahead of a second iteration to be released in the coming months
Origin, the London-based fintech digitising debt capital markets, has announced the launch of Airbrush, an interface data standard that will aim to act as a universal language for bond issuance market participants. The initiative is being launched with the support of Clearstream and the Luxembourg Stock Exchange (LuxSE), and follows Origin’s $7 million Series A funding round.
Bond issuance has historically been a complicated, repetitive and manual process for all parties involved. After a bond is issued, data is entered into multiple systems at multiple stages by multiple market participants before it is settled. With no universal standard, the same data points are created several times with different names, formats and validation, meaning market participants must translate data as it is passed from platform to platform, creating system inefficiency and the risk of error or inaccuracy.
Airbrush aims to resolve these problems, creating a standard specification and naming convention for defining a new bond. Similar to FIX or the ISO standards, the aim is to foster seamless data exchange between market participants, making the issuance process more efficient, accurate and integrated, through the creation of one standardised data set.
Raja Palaniappan, CEO and co-founder of Origin said: "Sitting at the intersection of Dealers, Issuers, Paying Agents, Exchanges, and CSDs, we believe Origin is in a unique position to understand the data requirements of all participants. Everyone wants to achieve straight-through-processing, but each new issuance is a multi-lateral effort, requiring many different systems to speak to one another. A common standard like Airbrush is long overdue and in our view will create better communication, faster transfer of information and less risk for all parties involved in the process. It demonstrates how collaboration can create solutions that fit the needs of the market today and we believe is a big step towards a fully digitised debt issuance market.”
Airbrush aims to determine the minimum set of data required for the processing of fixed income issuance, by consolidating the data requirements across post-trade market participants. Using the Airbrush standard removes the need for multiple costly and error prone bilateral interfaces. Market participants do not need to change internal systems, such as platform IT or data models, and technology providers can utilise their own markup languages. Airbrush ensures that when communicating with one another, systems will send and receive the necessary set of parameters in a consistent format.
The new language will exist as an open-source standard, with Origin coordinating activity on behalf of market participants. The first iteration of the standard relates to vanilla fixed, floating and zero coupon issuances, but new extensions for different structures and other features of a bond will likely be added over time.
Guido Wille, Member of the Executive Board of Clearstream Banking Luxembourg S.A. and Head of Eurobonds Business at Clearstream, said: “The safety and efficiency of securities markets are at the core of what we at Clearstream work towards. In debt capital markets, the issuance process so far has suffered from lower standardisation and greater need for manual intervention than later phases in the lifecycle of fixed income securities. As we integrate the Origin and Clearstream platforms to deliver instant ISIN generation and eventually automated settlement, we see great potential in solutions like the Airbrush standard in making for streamlined data transfer between our platforms.”
Arnaud Delestienne, Member of the Executive Committee at the Luxembourg Stock Exchange, said: “The lack of a comprehensive, structured and standardized securities reference data transmission along the entire new issuance process has become a significant source of costs & risks for international debt capital markets participants. We should collectively push for more convergence in terms of data models that can help streamlining the communication, automating the data capture and reducing operational risks across the value chain. Airbrush can bring this level of efficiency, accuracy & transparency in data processing that the market needs.”
The data will be aligned with the needs of downstream market participants, and curated and reported by Origin in an accessible and consumable format. Origin has invited key players to collaborate in order to ensure the standard meets the market's needs. The data standard will be published using the OpenAPI specification, accessible at https://originmarkets.com/airbrush , with review and feedback from market participants welcomed by 26 March 2021. The specification has been implemented into the Origin platform's new Transactions API, enabling clients to pull their post-trade transaction data effective immediately. Origin will consolidate market participants' feedback and aims to publish a second iteration in Q2 2021.
As a pioneer of digital debt capital markets, Origin offers three products that work together to automate debt issuance: Origin Marketplace, Documentation and Post-Trade modules. The company now has over 90 issuers and 20 dealers as clients, including some of the largest participants in the international capital markets. Origin’s ambition is to establish a digital, end-to-end, straight-through-processing issuance platform for international fixed-income capital markets.
