The OFR Factor

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It has become impossible to have a conversation without discussing the potential impact of the Office of Financial Research, says Tine Thoresen

This month, I’ve heard industry contacts say we at Inside Reference Data are not the only ones chasing data stories. Even journalists from the mainstream press have started writing about financial information. And this is not without reason.

After President Obama signed the Dodd-Frank Wall Street Reform Act, it has become difficult to have any industry conversations without talking about the new data collection and research center that will be established, the Office of Financial Research (OFR). For the reference data industry, it is not clear what the implications will be. Market participants say they are in a wait-and-see mode and some are running internal meetings to assess the potential impact.

The consensus seems to be that the first director of the OFR will be very influential in how the centre will work in practice. Everyone wants to know who others are recommending as candidates for this position, and many suggest it would be an added benefit to have someone with industry experience, who understands the pain points (see page 1).

The main challenge for the new Office will be to convince the critics that this set-up can work at a US-level. The global financial crisis proved how the markets were very much interconnected, and there appeared to be a need to better monitor systemic risk at an international level. The question now is if there is scope for regulators to collaborate, and come up with standards and formats that can be adopted globally to at least make it easier to analyze data.

Still, some say this could be taken one step further. Basel II works as an international directive. Could we see the introduction of something similar for the purpose of collecting and analyzing data to monitor systemic risk?

Right now, it is impossible to predict how it will all pan out. The bill can be seen as pretty vague in relation to reporting requirements, and some suggest this will help give the OFR power to assess the best possible ways to implement it.

So far, it is really the vendors that seem to be the most focused on identifying opportunities. There is already recognition that data management software vendors may be able to help clients with position management, as position data is one of the data types mentioned in the Act. The expectation now is that vendors will be pushing out new and improved modules for this purpose, linking it into existing data management platforms (see page 9).

For me, the next event on the road map is a different type of link-up. Later this month, I will be going back to Norway to get married, and my colleague Carla Mangado, staff writer, Inside Reference Data, will be acting editor for the September issue. I look forward to discovering how much more mainstream the market has become by the time I return.




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