Getting A Full Report

Communication, collaboration and, above all, reporting, are becoming important aspects for any reference data management professional. That is evident in our stories this month, including ways the industry is responding to regulatory mandates, and how getting different parties in the industry to communicate and work together yields benefits that would not otherwise be possible.

European Market Infrastructure Regulation (EMIR), following its trade reporting requirements set in February, has two more deadlines for different forms of reporting—one imminent, on May 12, for open derivatives trades, and another on August 12 for collateral and valuation reporting, as covered in "Ready to Report?" After the shock the February deadline caused, it remains to be seen if the industry will be caught scrambling again on these next phases. Reporting planning includes more than just collecting data, including reconciling different systems, making choices about what currency to report under, and tracking valuations to report.

And in another region, Asia-Pacific, global initiatives such as the International Financial Reporting Standards (IFRS), Solvency II and Basel III are increasing demand for reporting more detailed data with greater frequency. Panelists at our Tokyo Financial Information Summit identified different reporting issues than Europe, such as transparency of valuation calculations, having adequate personnel resources to handle reporting, and watching out for regulatory arbitrage.

Reporting and communication issues get combined when it comes to Solvency II compliance, as the Investment Management Association’s Susan Wright says. Solvency II rules compel asset managers to share data with insurance clients. But that data can often be incomplete and unaudited, raising questions about how updated data will be communicated. Wright is pushing asset managers, insurers and third-party administrators to communicate with each other to get a clear and complete view of how to comply with Solvency II’s data demands.

On the collaboration front, DTCC and Euroclear are partnering to build two utilities intended to better collect and report data about margin calls and collateral, something that DTCC's Peter Axilrod says should benefit all market participants. And Swift's know-your-customer data utility increases in value by signing on Barclays as another contributor.

Collaboration also requires openness, and the adoption of Bloomberg’s Open Symbology as the basis for a new identifier, the Financial Instrument Global Identifier (FIGI) created by the Object Management Group (OMG) consortium, could accomplish the goal of having an open system to identify securities. If the OMG had chosen a proprietary standard on which to base FIGI, it might have had a lot more trouble getting it off the ground.

These examples of collaboration and new communication are the types of efforts needed to ensure that reporting of data is as complete and consistent as it possibly could be.