Although details have not been finalised, Isda expects to release the first step of the working group's recommendations next month.
Engelen said the working group, which consists of bank representatives, sees the use of bar codes as an interim step toward the ultimate goal of eliminating all manual processing of trade confirmations.
Putting bar codes on to trade confirmation documents can increase the level of process automation, Engelen said. Once banks begin implementing the new standard, back-office personnel will be able to identify confirmations by using a scanner to read the bar codes. Now, confirmation details arriving either in the form of a fax or as a mailed piece of paper are processed manually.
By standardising the information and format of a bar code, institutions will be able to identify their own confirmations, which some already do through proprietary technologies. With the forthcoming bar codes, firms will also be able to identify confirmations from counterparties, and their status in the work flow.
The simple goal is to allow back-office personnel to immediately identify trade confirmations. However, reconciliation of the terms of the trade will still have to be done manually.
In foreign exchange trading, the majority of trades are already confirmed electronically. However, in other asset classes, such as interest rate derivatives, most transactions are still sent by fax or mail.