Reference data management firm Soliton is adding links from its instrument data to legal entity data, through a new partnership with CreditDimensions. The two firms are launching the (as yet unnamed) joint product at this month’s Securties Industry Association (SIA) Technology Management Conference at the New York Hilton, which will provide clients with a consolidated view of instrument and counterparty exposure.
The need for clean counterparty data is becoming increasingly apparent in areas such as credit and market risk, compliance, and settlement. Demand is mainly being driven by regulatory initiatives, including Basel II, Know Your Client (KYC) and Anti-Money Laundering
The deal with Soliton marks the first vendor agreement for CreditDimensions, which was set up as an industry-led solution to reduce costs associated with data acquisition and management. It is currently working with three investment banks and one buy side firm – including Credit Suisse First Boston, TIAA Crest and RBC Financial Group and is in discussions with several other firms – who publish data to Credit-Dimensions, which acts as an industry hub for counterparty data.
The sponsoring banks are cooperating with the initiative as it lowers their costs of data management, improves the quality and consistency of their data, and may help to contribute standards and best practices to the industry.
According to Carole Mahoney, sales director in the U.K. for Soliton, “By creating tools to integrate legal entity data with instrument data from a bank’s vendor of choice, we are providing a fully coded service that will enable customers to analyse links between instruments and the issuer.”
The integration process for Soliton, which provides data acquisition and client data model services, involves matching entity information from CreditDimensions across its information sources. The initial product launch will focus on matching all major entities based on high risk and high volume, and any further development will be based on client priorities.
CreditDimensions offers tiered levels of service, ranging from the static counterparty and hierarchy data to fuller credit analysis tools.
Its CDi.Data product is the reference data utility where the contributed data is mapped across sources, deduplicated, cleansed and enriched to provide a more accurate view of the legal entity hierarchy of counterparties. The data service can be licensed as a standalone product or provided as an outsourced ASP-based service.
Subscribers can then get access to the exceptions reports and can utilize CreditDimensions’ data analysis team, based in New Delhi, to investigate other, harder-to-find data, such as information on smaller hedge funds, through its CDi.Research_India product.
CreditDimensions is a partnership between four companies: Adsatis provides the project management and industry expertise services; ebusinessware is the preferred offshore services provider; PricewaterhouseCoopers is the preferred integrator; and Objective Edge provides the middleware that drives the data workflow and transformations in CreditDimensions. The industry composite database was first launched in May 2003.
Michael Smethurst, head of product development at CreditDimensions, says, “We spent two years securing industry buy-in for the right processes and data model that underpins our solution. This included working on the nomenclature and the workflow processes.
“We source the data from our partners, but even if three out of five contributed items on a legal entity match, it does not necessarily make them right, so we need to independently verify that data to ensure we have clean, accurate information.”
The CreditDimensions database currently contains data relating to 110,000 entities; the aim is to increase this to 200,000 by the end of this year. The company also plans to expand the data analysis centre in India to 120 people by the end of the year. Smethurst says that the company is in talks with data vendors and other solutions providers to widen its use.
Smethurst also says, “We are taking a close interest in what industry organizations are doing because it seems that the industry now has a clearer vision of what it needs.”
In particular, the Reference Data User Group (RDUG) has been working on its recently renamed International Business Entity Identifier (IBEI) initiative and both CreditDimensions and Soliton hope to work more closely with the organization as it progresses.