LEI's Tentacles
Planning for implementation of the legal entity identifier (LEI) standard has had its own share of conflict, on how to reconcile the LEI with other identifiers (see "Mapping LEI Coordinates" from March 21) and even in agreeing on how to accurately manage the US LEI precursor, the CFTC Interim Compliant Identifier (CICI).
But identifier issues may even be straying into other data management functions that might not occur to you at first, like data quality efforts and even the data being generated by collateral transactions. Linking entity identifiers is a data quality issue, observed MaryRose Carosia, vice president of enterprise solutions at S&P Capital IQ, in a webcast I moderated last week. There is a potential for errors in linkages between entity identifiers as they enter firms' systems, added Carosia.
A similar issue with linking identifiers can be found in reconciliations of trades as they pass from firms' front offices to their back offices, as Adam Cottingham, vice president of data management at SmartStream, observed in the same webcast. Front offices operate using market-level identifiers such as SEDOL or the Reuters Instrument Code (RIC), while back offices use ISIN numbers. SmartStream and Euroclear launched their Central Data Utility in October to address this issue. "The CDU cross-references functionality for all vendor codes, where one ID can be created that can support synthetic codes on the back end, and be mapped onto internal codes as well," says Cottingham.
This is the type of linkage that could serve as a model for how to link CICIs and LEIs with SEDOLs, ISINs and other key identifiers, as mentioned in that March 21 column.
Aside from the efforts of these service providers to address the issue with linking identifiers, an industry group is working on another area touched by identifier issues—collateral management. ISITC's Settlement Working Group has taken on the task of improving the handling of collateral transaction data, first removing manual processing, and now improving on the accuracy of confirmation and status messages as well as end-of-day reconciliations. While the group's collateral management efforts are not only dependent on LEI and identifier issues, those are also playing a large part in being able to manage the collateral data and improve its accuracy and usefulness, according to group member Jason Brasile of State Street's global product and platform solutions business.
So, as the LEI saga continues to wind its way toward a conclusion, it's now evident it will make some unexpected stops along its path.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
DSB says industry is ready to meet UPI mandate ahead of deadline
The Unique Product Identifier will be required for certain OTC derivatives in the EU at the end of April, following US adoption in January.
‘Very careful thought’: T+1 will introduce costs, complexities for ETF traders
When the US moves to T+1 at the end of May 2024, firms trading ETFs will need to automate their workflows as much as possible to avoid "settlement misalignment" and additional costs.
Court case probes open-source licenses as movement stands at crossroads
The Software Freedom Conservancy’s lawsuit against TV-maker Vizio begins trial in California, raising questions about open-source licenses and the risks posed by adhering to them.
Waters Wavelength Podcast: Countdown to T+1
DTCC’s Val Wotton joins the podcast this week to discuss the impending move to T+1 in the US.
Consolidated tape hopefuls gear up for uncertain tender process
The bond tapes in the UK and EU are on track to be authorized in 2025. Prospective bidders for the role of provider must choose where to focus their efforts in anticipation of more regulatory clarity on the tender process.
Fighting FAIRR: Inside the bill aiming to keep AI and algos honest
The Financial Artificial Intelligence Risk Reduction Act seeks to fix a market abuse loophole by declaring that AI algorithms do not have brains.
Waters Wrap: The rise of AI washing… and regulation washing?
The SEC recently levied fines against two investment advisors over “AI washing”. Anthony takes issue with the announcement.
Prepare now for the inevitable: T+1 isn’t just a US challenge
The DTCC’s Val Wotton believes that firms around the globe should view North America’s move to T+1 as an opportunity—because it’s inevitable.
Most read
- Deutsche Börse democratizes data with Marketplace offering
- Sell-Side Technology Awards 2024: All the winners
- Sell-Side Technology Awards 2024: Best implementation at a sell-side firm—FlexTrade Systems