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EDM Council Champions Data Management with Regulatory Community

The EDM Council has been busy over the last couple of months championing the cause of data management with the regulatory community. According to the industry organisation’s latest report, it has been working with the European Central Bank (ECB) to engage national and global associations, industry participants and regulators in discussions about data tagging in particular.

The work with the ECB has several main objectives, including creating a shared view of “the essential importance of precise (unambiguous) data at its most granular level in order to provide effective oversight over market participants”. It is also part of an attempt to focus global efforts on the implementation of industry standard ”tags and identifiers” needed to promote transparency, automation, data comparability and analysis, says EDM Council.

To this end, the organisation is attempting to gain industry buy in to the concept of enterprise data management and “coordinated global action to better manage the chain of information supply all throughout the information lifecycle”.

At TSAM earlier this year, Mike Atkin, managing director of the EDM Council, talked up the idea of an ECB operated global reference data utility for the industry’s legal and contractual (source) documents. The discussions with the community have involved attempts to garner support for this idea, according to the report. The EDM Council is also attempting to gain alignment on the legal mechanisms required to ensure compliance by issuers and other market participants on the objectives of source tagging and improved reference data quality.

The report indicates that the industry has been “receptive and interested” with these ideas, which cover three main areas: source mark-up, the reference data utility and a legal mechanism.

The industry organisation has also achieved some level of success with its semantics repository, which is now nearing the end of the initial phase of scheduled subject matter expert reviews, covering securities reference data terms. “We are at a critical juncture. Now is the time for industry participants to subject the components of the Repository (model structure, terms and definitions) to detailed internal scrutiny to both evaluate its quality and assess its relationship to your practical business requirements,” says Mike Bennett, a principal at London-based consultancy Hypercube.

The semantics repository has been designed to be technology independent and focus on the business meaning of data attributes, including how facts relate to one another. It covers the full spectrum of data including reference data, analytical information, real time and end of day pricing, and corporate actions for all financial instrument types and was built on contract to the EDM Council by Bennett.

Bennett indicates that the structural review phase is progressing “better than expected” and the initial evaluation of common securities terms, equity, debt, funds and business entities has been completed. “The terms and definitions for the completed sections have been marked as consensus (green in spreadsheet). Those needing further action are either red (further action required) or amber (not yet evaluated). Traded derivative terms are scheduled for completion by the end of April. This will complete the reference data terms for traded financial securities. Next up are corporate actions, OTC derivatives and market data,” he explains.

After the initial phase is complete, the plan is for one more round for validation as a final test of basic accuracy and completeness, he continues. “After this point we propose that the semantics repository will represent a consensus opinion of the industry on terms, definitions and structure – and will be ready for use in referential mapping and internal design applications,” Bennett adds.

The EDM Council has also been engaged in promoting its data management maturity model initiative, which is aimed at defining the components of data management and relating them to industry best practices. The objective is to produce benchmarks against which these projects can be measured and evaluated.

The organisation has established links with Carnegie Mellon University’s Software Engineering Institute (SEI) to collaborate in exploring the utility of the Capability Maturity Model Integration (CMMI) methodology and the CERT Resiliency Engineering Framework (REF) for data management. “The expectation is to turn the ‘art and practice’ of data management into the ‘science’ of data management,” says the report. Business entity identifiers (BEIs) have also been a recent focus for the EDM Council and it has been speaking with the regulatory community about the current status and potential of BEI implementation. The report indicates that the community has been receptive to the discussions, which it attributes to the financial climate and focus on risk management.

“Just this past week, we’ve had positive discussions with representatives from both Swift and ISO on the coordination objective so that there is no duplication of effort and that one identifier is created at the lowest level of granularity as the basis for links, hierarchies, analysis and processing automation. This activity is looking positive. We’ll keep you informed of what transpires,” the report concludes.

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