Financial messaging network Swift and the Depository Trust and Clearing Corporation (DTCC) have won two separate industry data management mandates, for the development of a Legal Entity Identifier (LEI) utility and electronic foreign exchange repository.
The deals put the Brussels-based network and New York depository at the heart of ongoing industry initiatives to develop clear and transparent data flows for monitoring systemic risk.
The award of both mandates are the culmination of an extended evaluation and RFP process extending over several months.
The LEI initiative, led by a coalition of financial services firms and trade associations, is seen as a critical first step in developing a consensus on the requirements and standards for a viable, uniform and global ID allowing for consistent identification of parties to financial transactions.
Under the proposals. Swift and the DTCC, along with its Avox data management subsidiary, are recommended as key partners to operate the core LEI utility as the central point for data collection, data maintenance, LEI assignment, and quality assurance.
They will work with the selected LEI standards body, the International Organisation for Standardisation, and the Association of National Numbering Agencies (Anna), who will act at the public 'face' of the LEI at a local level, registering, validating and maintaining LEIs for issuers, obligors, and other relevant parties in their home markets.
"These groups together possess the strong scope, scale and experience necessary to meet the global financial services industry's requirements and make a global LEI solution successful," says Tim Ryan, chief executive officer of co-ordinating body GFMA. "An international standard for an LEI solution would enable regulators and individual firms to better monitor systemic risk. GFMA, through its work with global market participants, has developed a framework for a globally viable solution that will be available to regulators around the world."
Separately, global FX bodies have recommended a partnership with DTCC and Swift to develop a foreign exchange trade repository, where information can be stored electronically to provide additional transparency for regulators.
The selection process was led byt the Global FX Division, comprising 22 market participants representing over 90% of the global foreign exchange market, in response to mounting global regulatory and political pressure for financial reform.
The next phase will see DTCC and Swift working with the Global FX Division to scope out the core functionality and technology requirements - particularly challenging for FX due to the number of participants, the volume of trades and the fact that participants in the FX markets are truly global - as well as understanding how the needs of multiple regulators can be met.
James Kemp, managing director of the Global FX Division explains: "To ensure that regulators have access to the maximum amount of data and that market participants of all sizes are not overburdened with multiple reporting formats, our aim as far as possible is to standardise industry reporting in all regions. We are actively discussing this with regulators in multiple countries, to understand their requirements and how we can help meet them."