Nomura International has signed a three-year agreement to take legal entity data from CounterpartyLink.
According to the vendor the international arm of the big Japanese bank is using its legal entity data product to validate and enhance its entity reference database. Nomura’s entity data files are compared to the corresponding entity records held by CounterpartyLink, and any exceptions are investigated by auditing back to the original source. The validated record is then maintained through a daily feed from CounterpartyLink.
Through its relationship with CounterpartyLink, Nomura is addressing what the head of its client data programme Matt Fowkes describes as “an important challenge” – “maintaining accurate client and counterparty data across jurisdictions”. Increasing regulatory imposition around Know Your Customer, Anti-Money Laundering and MiFID is serving to raise the importance of entity data management within financial institutions. Fowkes describes effective client and counterparty data maintenance as “essential” to Nomura’s data strategy.
CounterpartyLink provides up to 88 fields of validated data for each entity, covering name and address details, corporate hierarchy, registration and regulator details, and a variety of standard identifiers including the Swift BIC. Each field is linked back to the original public filing or web page, providing an audit trail back to source, the vendor says.
Martin Cole, head of sales and marketing at CounterpartyLink, says in signing for three years Nomura is taking a similar approach to its other clients. “Although we offer contract lengths between one and three years, all of our clients so far have opted for the longer contract as it makes sense to take the long term view when thinking about data quality improvements,” he says.
Like Nomura, all CounterpartyLink’s other clients take a daily feed of entity data, he adds, “either as a ‘full file’ update or ‘changes only’, depending on their requirements.” All take the standard product, with the exception of CIBC, “who take the data via Cicada, who add value on the way.” Cicada provides entity source data to CIBC World Markets through its distribution agreement with CounterpartyLink, as well as providing additional customised data and financial and AML related document research and sourcing (Reference Data Review, February 2006).
The growing importance of entity data management is attracting increased interest from data vendors, both specialists such as CounterpartyLink, Deutsche Boerse’s Avox and Credit Dimensions, and providers such as Standard & Poor’s (with its CrossWalk venture in partnership with Telekurs Financial and Dun & Bradstreet), FT Interactive Data, working with both CounterpartyLink and Avox, and, most recently, Reuters (Reference Data Review, September 2006).
Recently, some of the vendors rounding on the space have started to suggest that the revenue generating potential of having better control over client data will be the factor that really excites senior management about such projects. But Cole says it is still the stick of regulatory pressure rather than the carrot of revenue growth that is the predominant driver for firms to focus on entity data.
“We are seeing increasing demand, and an increasing realisation that such data can be sourced and maintained by an external supplier, rather than by internal teams,” he says. “At the moment, most of the demand is driven by compliance requirements, including getting ready for 3MLD (the Third Money Laundering Directive) and things like the MiFID client classification requirements.”
As well as its partnerships with Cicada and FT Interactive Data, CounterpartyLink has alliances with Capco, Exchange Data International, GoldenSource and Soliton.