With the ongoing global regulatory overhaul and the planning for the launch of its Target2-Securities (T2S) project well underway, it’s no surprise that the European Central Bank (ECB) has decided to put its reference data utility plans on a backburner for the time being. The central bank will continue to gather feedback about the idea in the meantime, but is unlikely to be taking any drastic action towards getting such a utility off the ground any time soon.
Moreover, the industry at large seems somewhat unconvinced at the moment about the idea of a regulatory led utility in the reference data space. A number of Reference Data Review readers wrote in last month to indicate their concerns about the proposals and their scepticism that a globally focused utility for reference data would be achievable in the near future. The regulatory changes ongoing in the market are also certainly enough to keep the market and the ECB busy for some time.
However, the ECB is correct in its insistence that reference data and the wider risk management endeavour within financial institutions and at the level of the regulator with systemic risk are closely connected. The financial crisis has highlighted that standardised, timely and complete micro data that was needed to assess risk was not available. But does this, as the ECB has previously suggested, justify the introduction of a regulatory led data endeavour such as a utility?
Francis Gross, the director general of the ECB’s statistics division, will unfortunately be unable to elaborate further on his own views at next week’s Sibos because he will not be in attendance. It would appear that head office has other plans for him that week. Perhaps, being in Hong Kong, the powers that be at the ECB felt Sibos was not worth the journey.
It is a great shame that he will not be there because it would have been a prime opportunity for the ECB clarify any misunderstandings that securities industry participants may have about the initiative and explain how it could work in practice. Rather than a more reference data focused conference, Sibos would have exposed the idea to a wider audience and given the ECB access to those in charge of the purse strings: board level executives.
All is not lost, however, as the show will go on. Thomas Gross (no relation), CEO of SIX Telekurs, will be instead presenting the vendor’s own reference data utility initiative in the Swiss market and the panel will include discussions about the ECB’s plans in comparison to this private sector led project.