Interactive Data Corporation, a leading provider of global pricing, reference and corporate actions data, today announced its commitment to support all ISO 17442-based entity identifiers, starting with the CFTC's Interim Compliant Identifier (CICI), through its Business Entity Service that provides reference data and corresponding corporate hierarchies to aid counterparty risk management.
With regulators and the G20 Financial Stability Board (FSB) evaluating methods to efficiently and accurately identify and manage counterparty risk, legal entity identification has moved to the forefront of data management issues under consideration by the industry. Interactive Data's Business Entity Service, which already assists clients with these issues, has now been extended to include the CFTC's CICI for OTC derivatives trade reporting.
The Business Entity Service provides clients with a comprehensive solution that extends beyond the current focus of the LEI by also including information for portions of the corporate structure that are not directly involved in financial transactions. The Business Entity Service provides information at the entity, parent and ultimate parent levels for entities that have issued securities. Interactive Data plans to continue to expand coverage of the Business Entity Service by mapping and cross-referencing new LEI schemas as they are introduced to the existing data within the Service.
Virginie O'Shea, analyst at Aite Group, said: "Given the recent European Securities and Markets Authority (ESMA) requirement for LEI use in reporting to trade repositories and when clearing OTC derivatives, firms active in these markets will be compelled to invest in cross-referencing to the new standard and in improving the underlying data related to those identifiers for trade reporting. Moreover, managing counterparty risk in the current challenging market conditions is much easier when a firm is able to understand its true exposure across related entities. All of these reasons are providing a compelling case for firms to invest in legal entity data and infrastructure to support the maintenance of that data."
Mark Hepsworth, President, Pricing & Reference Data at Interactive Data, commented: "We see the introduction of the LEI as an opportunity to go beyond simply providing the identifier. By linking it to entity hierarchies and their issued securities we can provide clients with a more comprehensive solution to monitor risk exposure and see a more complete risk profile. Integrating the CICI within our Business Entity Service and existing reference data products gives each security a connection to an entity identifier, where one exists. The linkage delivered in these products shows the inter-relationships between financial instruments, issuers and market data to provide risk managers with the means to identify and manage risk exposure across the enterprise, something that cannot be achieved with the LEI alone."