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DTCC Plans Vendor Workgroup to Tackle Data Accuracy of the CICI and LEI

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DTCC has responded to criticisms covering the accuracy and quality of CFTC Interim Compliant Identifiers (CICIs) it issues on behalf of the Commodity Futures Trading Commission (CFTC) saying data issues highlighted in a blog by data consolidator Alacra are the result of how business rules are being applied to entity registrations.

Despite its defence, DTCC does acknowledge the need to improve data quality and plans to set up a vendor workgroup aimed at enhancing the business rules and data accuracy of the CICI and, ultimately, the legal entity identifier (LEI).

The Alacra blog by CEO Steve Goldstein noted duplicate CICIs and CICIs with empty fields in the utility operated by DTCC, and reviewed an analysis by Alacra of the data in the utility on one day at the end of April. The analysis showed a total of 71,793 entities from 140 different countries that have been assigned a CICI. Not surprisingly, the US dominated the CICI registrations as the CFTC is the only regulatory body that has mandated their use.

While 70.6% of the CICIs were certified, 29.4% were not, a problem DTCC says results, in great part, from inadequate sources to verify the registration information. In instances of inadequate sources, the information is added to the CICI database ‘as is’.

The Alacra analysis also showed confusion over address information, with many entities reporting their state in the city field and vice versa. Spelling mistakes also took their toll on accuracy to the extent that 169 states are listed as being within the US.

A not unexpected problem was that of the 50,000-plus entities that were certified, over 20,000 were categorised as ‘Other’ in terms of status by legal registration type. Alacra judged this number to be too high, as some entities that could be easily classified were not, but it also noted the problem that is often mentioned in discussion around the emerging LEI of the database including a significant number of funds for which there is no legal form of classification.

Alacra is a daily user of the CICI file in its work with clients’ compliance and reference data departments. In the short term it is checking and correcting CICI data before using it with a view to stemming the flow of inaccurate data included in CICI registrations. Longer term, it will join the DTCC’s vendor workgroup with a view to improving data accuracy.

As many market participants preparing for the LEI have pointed out, the CICI provides a useful learning space in which to identify and tackle some of the difficulties likely to surface around LEIs, and discover their potential impact on the global LEI system.

Alacra is on the learning curve, with Goldstein saying: “The goal here is not to tear down the CICI utility or cast doubt on the viability of the global LEI system. Rather, we are pointing out that the current dataset has issues that need to be resolved. Firms planning to load and use this data for compliance or counterparty analysis need to take care to understand the current limitations to benefit from the CICI utility as it was intended.”

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