18 Apr 03: NYSE Releases Business Rules Spec For VRXML Vendor Reporting Standard

The New York Stock Exchange has released a document detailing how its Vendor Reporting eXtensible Markup Language (VRXML), initiative will handle the exchange’s validation rules and the business rules of the various market data business participants, including exchanges, vendors and user firms.

The exchange has released its NYSE VRXML Business Rule document through http://www.vrxml.org and through the web-site of industry group FISD, with which it teamed up last December to promoting its XML-based standard for reporting of market data usage.

The NYSE business rules initiative represents a step toward the kind of data set consistency the FISD’s membership has been calling for. Passing consistent data between users, vendors, exchanges and other third-party providers would make reconciliation easier and would help the user firms with their business objectives.

The VRXML business rules initiative addresses one of the objectives outlined by the FISD as part of its overall market data administration agenda. FISD has stated that its members are seeking to ensure that the rules, policies and procedures associated with market data usage (e.g. redistribution, data usage, derived works, data management) are known, clear, relevant and reasonable – so that vendors and users can comply with their contractual obligations.

The NYSE retained the services of Gemini Systems LLC to create the VRXML language. Gemini is also spearheading the VRXML FastTrack Program, which is designed help organizations quickly realize the benefits and return-on-investment (ROI) of VRXML by adapting their systems and operations to take advantage of the new communications standard.

FISD has assumed ownership and maintenance of the specification and is actively exploring its extension to support the full range of industry requirements associated with billing and reporting. FISD members support the migration to an industry-wide XML reporting format and have confirmed their interest in using VRXML as a component of the overall billing and reporting initiative. The advantages of VRXML include:

• The opportunity for reducing the number of reporting formats in use by exchanges and vendors on a global basis.
   

• The opportunity to standardize and normalize the terms and meanings of billing and reporting data elements. The creation of the global billing and reporting glossary is an essential element in ensuring data set consistency, producing electronic invoices and reports, and a core component of billing process improvement.
   

• The benefits of extensibility. VRXML should make it easier for the industry to incorporate existing and new business requirements into systems and reduce programming expenses.
   

• A leverage point for managing a host of additional business issues associated with industry-wide administrative improvements.

Under the current arrangement, financial institutions and market data vendors use the NYSE’s Vendor Automated Reporting System, or VARS, to report the number of users receiving the exchange’s share price information. Based on these reports, the NYSE invoices the end users for subscriptions to its market data.

However, as the marketplace has become more complex, particularly with the increase in providers offering access to share price data over the Internet, so the reporting process has become more onerous, resulting in delays and mistakes.

The NYSE has introduced VRXML in the hopes that a single standard for usage-reporting will make the process more efficient. Under the plan, vendors will be able to report direct to the exchange in VRXML, or will be able to translate data from VARS into VRXML, using a third-party NYSE spin-off called TCB Data Systems.

Meanwhile, FISD has also retained Gemini Systems to manage its billing/reporting facilitation project. The outcome of the facilitation will be the creation of three detailed information flow models.

1. The first is the Business Information Model (BIM) outlining WHAT information the various players generate. This is a key deliverable and can be used by the industry to define priorities.
    

2. The second is the Interface Model (IM) outlining HOW information flows among and between entities. This model defines the information processing requirements and can be used by participants to identify automation opportunities.
    

3. The third is the Workflow Model (WM) outlining the business processes involved in billing and reporting. These processes often span multiple functions both within and outside of the organization and can be used by the industry to improve process efficiency.