DTCC buys reference data firm Avox; plans European trade reporting repository
01 July 2010 | 11156 views | 0
The Depository Trust & Clearing Corporation (DTCC) has acquired Avox, a UK-based reference data firm majority-owned by Deutsche Börse in a cash deal valuing the business at a "low double digit million GBP figure".
Avox cleanses and maintains reference information on legal entities and counterparties needed by financial services to support operational, risk management and regulatory compliance activities, including know your customer and anti-money laundering reporting.
The firm's automated, centralised corporate database resource holds information on the legal name, address, corporate hierarchies, immediate and ultimate parent, industry sector codes, company identifiers, and regulator information applicable to these companies.
It counts Citi, Barclays, Nomura International, Standard Bank, Mizuho, Allianz, Eurex, Swift, Mitsubishi UFJ and Royal Bank of Canada among its customers.
Under the acquisition deal, the two founders of Avox, Ken Price and Steve French, who were also minority shareholders, will head the company as chief executive officer and chief operating officer, respectively.
Patrick Kirby, MD, asset services, DTCC, says: "The need for accurate, well maintained reference data on securities and legal entities is a growing priority for the financial services industry, to help manage credit exposure, meet new regulatory compliance requirements and to improve transparency from the issuer to the end investor. The acquisition of Avox is a natural complement and part of a global strategy DTCC has underway to provide our customers with a full suite of value-added data capabilities."
Separately, the DTCC says it will establish a London-based trade reporting repository which will maintain global credit default swap data identical to that held in its New York based Trade Information Warehouse.
By establishing identical CDS data sets on two continents, the firm says it will help ensure regulators have secure and unfettered access.
The subsidiary will jointly house the global equity derivatives repository being built by DTCC as the result of winning the International Swaps and Derivatives Association global bid for this service.
Stewart Macbeth, GM, Trade Information Warehouse, DTCC, says: "It is very common for counterparties to be located on different continents and to trade on underlying securities issued across borders. This means that repositories for any asset class need to maintain global information to be useful. It also means that steps need to be taken to ensure that the data is always available to regulators globally regardless of events and circumstances taking place in one location or another."