Following pressure from the industry regarding Article 12 of the implementing directive of MiFID, the Committee of European Securities Regulators (CESR) determined that derivatives traded on certain regulated markets will be identified by an Alternative Instrument Identifier code rather than ISIN.

The following AII updates have been issued:

• July 2009 - FSA delay
• February 2009
• November 2008

AII has been introduced for the identification of security derivatives on authorised AII markets. The new identifier is made up of six separate mandatory elements which are collectively known as the Alternative Instrument Identifier or AII for short.

The six elements are:

• AII Exchange Code.  Four character ISO Market Identification Code (MIC) of the regulated market that admits the derivative to trading
• AII Exchange Product Code. Code of 1 – 12 characters maintained by the derivative exchanges
• AII Derivative Type. Single character field identifying whether the instrument is an option, or a future
• AII Put/Call Identifier. Single character field identifying whether the derivative is a Put or Call Option
• AII Expiry/Delivery Date. Expiry/Delivery  date of the derivative contract in format YYYYMMDD
• AII Strike Price. The strike price of an option (zero for a future)

In order to minimize changes forced upon users of the TRAX system, Xtrakter are going to utilise existing data elements to receive this data. The AII will not, therefore, appear as an explicit data element. This is  consistent with reporting of these transactions to FSA (although AFM and AMF are using strings containing concatenated data items).

Only certain exchanges support the Alternative Instrument Identifier. These exchanges and the product codes they allocate are known and will be validated. Any combinations of Exchange and Product Code that are not known will be rejected.

FSA have finalised their requirements for reporting AII transactions and Xtrakter are now ready to begin their implementation project. Changes to existing message formats and file formats will be not be necessary as the elements of the AII can be reported logically using existing data items.

Guidance notes explaining how to report AII transactions using the existing Xtrakter mechanisms are located below, simply click on any link to download a pdf.