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S&P Finds Opportunity in Custom Linkages for Risk

Standard & Poor’s is investing significantly in the capability to support customised work with clients to meet risk and compliance requirements “at the point of intersection between risk and reference data”, according to Scott Preiss, vice president, securities classifications at the company. These customised offerings are provided in addition to the off-the-shelf products S&P has developed in this area, such as Security to Entity Crosswalk, created in partnership with Dun & Bradstreet and Telekurs Financial. S&P is also being called on to create linkages with credit ratings from the ratings side of its business, Preiss says.

“Recently we have spent more time on the business development and provision of the global aspect of cross-referencing tools, to provide mappings and linkages between a variety of coding structures – including back office identifiers like ISIN, Cusip and Sedol, and also legal entity identifiers such as proprietary DUNS for which we partner with D&B and increasingly a wide variety of proprietary coding systems,” he says. Each institution has its own internal identifier structures, and S&P says it is being called on more and more to maintain them, and to develop new linkages for clients. “This is not just about managing reference data; for supporting clearing and settlement and risk and compliance applications, the linkages we provide are increasingly important.”

The use of Security to Entity Crosswalk to support risk and compliance requirements is growing, Preiss says, because it links legal entities into the corporate hierarchy and drills down to the instrument level. “We are also making pretty significant investments in technology and new platforms to support customised work with clients around risk and compliance,” he adds. “Client requirements include needing all back office identifiers mapped to some front office or proprietary structures, and linked to core reference data and the corporate hierarchy.”
A “pleasant surprise” has been the appetite for linking in credit ratings from S&P’s ratings business, Preiss says. S&P is also working with “a handful of clients” who want other content sets linked in – from other ratings agencies, or other data sets altogether, including internal proprietary structures.

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