The Federal Reserve is requesting comment on a proposal to adopt the ISO 20022 messaging format for its Fedwire Funds Service. Corporate treasury professionals are encouraged to share their thoughts.

The Fedwire Funds Service is a real-time gross settlement system operated by the Fed. Participants can use it to make payments using either their balances held in the Reserve Banks or intraday credit provided by the banks. The proposed action would replace the service’s current, proprietary message format.

Switching to the ISO 20022 standard would improve efficiency for both domestic and cross-border payments, providing banks and corporate treasury professionals with greater payment data. If approved, the migration to ISO 20022 would take place in three stages, beginning in 2020 and ending in 2023. Many foreign wire transfers systems have already adopted the standard.

In 2012, the New York Fed formed a stakeholder group to assess the value in adopting ISO 20022. This led to the 2015 Strategies for Improving the Payment System paper, in which the Fed recommended that the U.S. develop a strategy for adopting the standard.

Since that time, the Fed and The Clearing House (TCH) have worked together on plans to adopt ISO 20022 for Fedwire and CHIPS. While they have each opted to implement the standard separately, the Fed and TCH plan to align the implementation of the new format on Fedwire and CHIPS, noted law firm Sullivan and Cromwell LLP.

Magnus Carlsson, AFP’s manager of treasury and payments, believes that moving towards the ISO 20022 standard is a step in the right direction. “However, changing a format can be costly for corporates and it is therefore important to use this invitation to comment on the proposal,” he said.

Comments are due on September 4, 2018.