Following its recent spate of partnership announcements, Cusip Global Services (CGS), which is managed by Standard & Poor’s on behalf of the American Bankers Association, has added yet another one to the list, this time focused on entity identification for the hedge fund community. CGS has signed up to work in partnership with hedge fund and fund of hedge fund information provider HedgeFund.net to produce a Cusip identification system for hedge funds and funds of hedge funds on a global basis by September.
HedgeFund.net, which is owned by alternative investment service provider Channel Capital Group, will therefore work with CGS over the next three months to generate a nine character Cusip and a 12 character ISIN for unique hedge funds and fund of hedge funds and their underlying classes. The end goal of the project, according to CGS, is to enhance the quality and efficiency of hedge fund information flows, enhance business processing methods and hedge fund research for hedge fund industry stakeholders.
James Taylor, managing director of CGS, reckons the vendor is an obvious choice to lead the entity identification foray into the hedge fund space because of its history in the development of entity identifiers. The vendor chose to work with HedgeFund.net because of its current information gathering capabilities in the alternative investment market.
The vendors also claim that preliminary feedback received from investors, investment managers and service providers, has indicated that there is considerable demand for a unique identification system for the hedge fund industry. Given the recent regulatory focus on the area, perhaps the regulatory community should be added to this list too…
CGS and HedgeFund.net have stated that they will be engaged in further discussions with key industry constituencies around the development of the Cusip Hedge Fund Service in the coming months. This will culminate in the launch of the new service at the end of September, at which point the vendor expects a “substantial” group of funds with Cusips, accompanying ISINs and related data elements to be available.
Market participants who wish to subscribe to the Cusip Hedge Fund Service will be able to do so directly from CGS or via a licensed vendor. HedgeFund.net’s hedge fund database product, which provides hedge fund performance and qualitative information, will also contain hedge fund Cusips and ISINs.
Don Cacciapaglia, chairman and CEO of Channel Capital Group, calls the collaboration an “ideal blend” of hedge fund content and CGS’ expertise in identification of entities and instruments.
The introduction of official Cusip codes for hedge funds continues the aggressive expansion of asset class and legal entity coverage by CGS that has been ongoing this year. Thus far in the last six months alone, CGS has signed two other partnership agreements with vendors to develop is entity identification offering.
In April, CGS agreed to partner with business entity identification provider Avox to develop a universal identification system for global business entities, which it has dubbed the Cusip Avox Business Reference Entity identifier (CABRE). The vendor is currently working with Avox to create the new standard, 10 character code, which it says will be generated and maintained for issuers, obligors and counterparties on a global basis.
In May, the vendor agreed to work with UK-based futures and options specialist FOW Tradedata to develop a new Cusip identification system for listed equity options in the US. The timeframe for this project is even shorter than the one scheduled for the hedge fund project, as the new service is due to launch by the end of June.