DTCC is coming closer to delivering the client data and documentation utility it described last year as it tests the first release of Clarient Entity Hub ahead of general availability in the fourth quarter of this year.
The company signed a memorandum of understanding to design and develop a utility that would support client on-boarding and ongoing client lifecycle events in September 2013 with a group of four banks – Barclays, Credit Suisse, Goldman Sachs and JPMorgan Chase. It has since added two more banks to the development group – BNY Mellon and State Street – and says it expects more banks and broker-dealers to sign up as active participants.
Clarient Entity Hub is owned and operated by Clarient Global, a new DTCC company, and is designed to help firms meet the requirements of regulations including Know Your Customer, the Foreign Account Tax Compliance Act, European Market Infrastructure Regulation (EMIR) and Dodd-Frank. Investment managers, hedge funds and corporates will be able to upload, validate, permission, distribute and securely store entity data, documentation and hierarchy data at no cost, while financial industry customers gaining permission to access the data will pay Clarient for the data service.
Clarient differentiates from other client reference data utilities in being user owned and governed, but like other utilities its aim is to increase efficiency and reduce costs by collecting data once and making it available for use many times, although CEO Matthew Stauffer, qualifies: “This is not an open forum of information. It is very controlled and information is only made available if it is permissioned.”
The first release of the hub is being tested by Clarient, its founder members and 10 asset managers and hedge funds than are part of the Clarient User Partner Programme. It will be available on general release in the fourth quarter of this year. David Crawford, executive vice president and head of State Street’s global transaction banking services, comments: “The client on-boarding process has long been a challenge for market participants worldwide and we look forward to a collaboration that will enable us to bring the optimal solution to the industry.”
As well as offering client reference data, Clarient – a name chosen to represent clarity, entity, transparency and control – will be linked to other DTCC reference data services. This will provide common access to Avox, a provider of legal entity data, and Omgeo Alert, a utility containing standing settlement instructions. Clarient also plans to integrate the hub with DTCC’s client reference data and enrichment service, a portal that collects counterparty information required for delegated derivative trade reporting under EMIR.
Stauffer explains: “We are building integration between these services to make it as easy as possible for clients to access them. Clients can use the services independently or in an aggregated way.” The Clarient Entity Hub will be operated out of DTCC’s Avox facility in Wales and its data centre in Tampa, Florida.