S&P Capital IQ is addressing the need to cross reference emerging legal entity identifiers (LEIs) in a broad cross-referencing service covering over two million public and private entities that use standard and proprietary identifiers. The service is called the Business Entity Cross Reference Service and is designed to help users identify systemic and counterparty risk, while easing the burden and cost of tracking legal entity structures in house.
The service builds out S&P Capital IQ’s cross-referencing services, adding an entity layer to the typical three-tier reference data model covering issuers, issues and securities. The Business Entity Cross Reference Service can map securities to one ultimate parent entity, helping users to meet regulations such as Dodd-Frank, Basle III and Solvency II that require a greater understanding of concentration risk and risk exposure. It also cross references different identifiers used by market data vendors to identify the same entity. Roger Fahy, vice president at S&P Capital IQ, explains: “Firms that manage different sources of information need to understand and maintain, on a daily basis, the linkages between instruments, entities, issuers, securities and sector classifications for better geographical and counterparty exposure reporting. This is what our solution provides.”
The Business Entity Cross Reference Service supports LEIs that are part of the global LEI system mandated by the G20 in 2011 and developed under the auspices of the Financial Stability Board. Rui Carvalho, managing director at S&P Capital IQ, says: “We have added the LEI to the service as another identifier and we are adding individual LEI codes as they are issued. The first official LEIs are the CFTC Interim Compliant Identifiers, or CICIs, and they are included in the initial service. The next release will include German LEIs issued by WM Datenservice. As other jurisdictions go live and issue LEIs locally we will also capture them and map them to other standard and proprietary identifiers.”
The service is available as a subscription option on S&P Capital IQ’s Xpressfeed delivery platform, a turnkey database designed for efficient data delivery and management, and is production ready. Carvalho says: “We ran a beta programme for the Business Entity Cross Reference Service with a group of clients. Over a dozen are already paying to use the service and we have a pipeline of a further 30 to 50 clients. Typical early adopters are those with the greatest exposure to risk as their portfolios are very large, but ultimately we also expect small and medium capital markets participants, as well as regulators, to need a solution for entity cross referencing.”