The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

S&P Teams with Markit to Offer Entity-Issue Link for Credit Swaps

Following a custom implementation at Rabobank International, Standard & Poor’s has launched Reference Entity Link, aimed at the credit default swaps marketplace. The service, which draws upon Markit’s Reference Entity Database (RED) provides full issuer and issue coverage behind each CLIP code.

CLIP codes – named for Cusip-Linked Entity Markit Code (Reference Data Review, March 2005) – link a business entity to an associated issue. The nine-digit CLIP codes are mandatory for dealers matching on the Depository Trust & Clearing Corp. (DTCC). Standard & Poor’s operates the Cusip Service Bureau, which assigns Cusip codes to issues. S&P also runs the Association of National Numbering Agencies (ANNA) Service Bureau, in a joint venture with Telekurs (USA), the ISIDplus database, again with Telekurs and Crosswalk, an entity-issuer link, with both Telekurs and Dun & Bradstreet.

Reference Entity Link now provides access to more than 100,000 issue and issuer CUSIP and CINS numbers for the entities in the Markit RED database. The service helps users understand the relationship between entities and their obligations in the credit default swaps marketplace. Users can then understand the credit exposure of each CLIP entity, eliminating the need for manual issuer to issue cross-referencing. 

The new service is being made available only to existing clients of Markit’s RED database. Markit RED is used for confirming reference entities and their reference obligation ‘pairs’ and provides audited legal reference names for approximately 1,800 entities, covering 2,500 issues.

Introducing the service at the FISD’s World Financial Information Conference in Rome this month, Darren Purcell, associate director for European securities classifications at Standard & Poor’s, said the solution helped Rabobank deal with a number of issues in its credit trading department. The Dutch bank, Purcell said, was having difficulty linking individual Cusips to multiple issuers. Working with S&P and Markit, the bank was able to eliminate this highly manual task.

Now, Rabobank has access to more than 100,000 issuer and issue CUSIP and CINS numbers for the entities in the Markit RED database. This data allows it to link specific Cusips to a particular business entity, and identify the credit exposure of each CLIP entity.

Standard & Poor’s will be offering Reference Entity Link as an optional service to RED clients. Reference Entity Link is updated weekly and delivered via FTP. It can also be integrated into in-house trading, risk management and other applications.
Meanwhile, Markit has signed up integrated its credit default swaps pricing into Quantifi Inc.’s credit models. Quantifi provides advanced credit derivatives models, pricing tools and risk applications. The company will use Markit’s pricing on 2,700 individual entities and tiers of debt, which is drawn from daily price contributions from more than 50 dealing firms.

Related content

WEBINAR

Recorded Webinar: Managing the transaction reporting landscape post Brexit: MiFID II, SFTR, EMIR

The transaction reporting landscape has, for many financial institutions, expanded considerably in size since the end of the UK’s Brexit transition period on 31 December 2020 and the resulting need for double reporting of some transactions to both EU and UK authorities. It has also changed dramatically following the UK government’s failure to reach equivalence...

BLOG

How to Use Chatbots and Collaboration Tools to Improve Automation and Deliver On-Demand Data

Digital transformation in the financial services sector is forcing a rethink in how financial institutions access the data they need to support trading and investment activities. While traditional bulk data distribution arrangements are well suited to large sell-side institutions, they can be costly and lack flexibility for firms from large Tier 2 sell-sides down to the...

EVENT

RegTech Summit New York City

Now in its 5th year, the RegTech Summit in NYC explores how the North American financial services industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

Entity Data Management Handbook – Seventh Edition

Sourcing entity data and ensuring efficient and effective entity data management is a challenge for many financial institutions as volumes of data rise, more regulations require entity data in reporting, and the fight again financial crime is escalated by bad actors using increasingly sophisticated techniques to attack processes and systems. That said, based on best...