Developments in regulation and standards such as Fatca and Solvency II, along with reference data needs identified by ISITC, are part of the reason why reference data is definitely not a stagnant part of securities industry operations in the year to date
For a part of the securities industry that by its name alone conjures up visions of static, unchanging functions and systems, the reference data space has a lot going on already this year. Thumbing through the pages of this issue, you will definitely see that from front to back. Our top news stories in the April issue of Inside Reference Data concern semantic technology coming to fruition as a means to manage reference data, and the European Union’s Financial Stability Board (FSB) considering ways to better define what the legal entity identifier (LEI) will identify and how, so that other bodies can set an LEI standard ahead of key deadlines in June and July.
The Foreign Account Tax Compliance Act (Fatca) is driving a need for data management solutions to comply with its provisions. As Tony Wicks, a director at risk and compliance systems provider Nice Actimize, says in this story, “Financial institutions are going to have to capture a lot more electronic information than they’ve done previously.” That includes North American Industry Classification Systems codes or Standard Industry Classification codes, and even Employer Identification Numbers. Jon Asprey, a vice president at Trillium Software, says firms have to address discrepancies between data held in different systems to be prepared for Fatca. Clearly, there is a lot of work to be done here.
On another regulatory front, the European Union’s Solvency II directive also is generating considerable reporting requirements, and thus data management demands. Data professionals must wrap their heads around a new set of forms known as quantitative reporting templates (QRTs), which will be filled in with data provided by third-party administrators (TPAs). Adding to these acronyms, QRTs also necessitate another standard, Complementary Identification Code (CIC), as we also detail in this story. TPAs and data providers will have to work together on mapping data to the CIC standard.
In the past month, as recounted in our Industry Warehouse column and a recap of the Boston annual meeting of the International Securities Association for Institutional Trade Communication where members considered the developments of the past 20 years since the organization’s founding, and thought about what the next 20 might hold for reference data. Chair Jan Snitzer, in the column, sees several needs that the organization will address. At the conference, she announced a new Regulatory Working Group, and she also says international expansion, working with broker-dealers on middle-office data issues, addressing derivatives issues and innovating and advancing data technology are all on the organization’s agenda.
This is not even a complete list of all the reference data-related developments in the works and covered in our latest issue. You will also find other regulatory wrinkles, changes in centralization of data, and the way vendor management is now seen as a means to manage data. We hope this will give you some food for thought about reference data’s role and even some topics to debate.