DTCC's Piques Interest in New Rebranded Avox Counterparty Data Service
Is Depository Trust & Clearing Corp. preparing subsidiary Avox to be a central operating unit or local operating unit for creating and distributing new legal entity identifiers?
That's what about a dozen data management and operations experts contacted by www.iss-mag.com think when asked about the DTCC's announcement last Thursday of a new web portal that will provide access to legal names, parent company names and other data on 459,000 financial. "It's pretty obvious they are courting the regulators about taking on a key role in the new global LEI initiative," says one data management director at a New York-headquartered bank who declines to be named.
But that's not what the DTCC is saying. The umbrella organization for clearing and settling U.S. securities transactions appears to be publicly separating the rebranding and expansion of its Avox service called AvoxData with the global legal entity identifier initiative backed by the Financial Stability Board. When asked specifically about how the new AvoxData would fit into the FSB's LEI plans, DTCC's William Hodash says it is "too early to know." Avox, he adds, will continue to work on its primary business as the leading vendor of enhanced legal entity data. "That service will still be valued by large firms after the global LEI initiative is operational."
DTCC purchased Avox, a counterparty data management firm, from the Deutsche Borse in 2010 and subsequently introduced a free wiki-data service with rudimentary information on counterparties which were assigned IDs called AVIDs. Subscribers wanting more in-depth data could always get it for a fee.
"The new AvoxData service is similar to a previous wiki-data service but offers some additional information, including new interim IDs for swap counterparties and a larger database of legal entities," explains Hodash who serves as DTCC's managing director for business development." Avox will be downloading and using CICIs as part of its service, the way any data vendor can for free."
DTCC's website also touts AvoxData as replacing wiki-data, but incorporating the same free data; the subscription service is "slightly upgraded." Publicly available data will include legal names, primary places of business, countries of incorporation, trading status, entity type, AVIDs and where available the CFTC's interim compliant identifiers otherwise known as CICIs. Paying subscribers get hierarchical information, industry identification, regulatory information and issuer details.
In a widely expected move, the U.S. Commodity Futures Trading Commission recently tapped DTCC alongside global message network provider SWIFT to create and distribute new IDs for swap trading firms. Those firms are the first to receive the new CICIs, which DTCC and SWIFT tout is a stepping stone to the creation of new global entity identifiers espoused by the FSB; however, some data management experts don't believe the transition will be that smooth or coordinated since there are differences between CICIs and the global legal entity identifiers. The FSB, the regulatory arm of the Group of 20 industrialized countries has recommended a three-tiered system for creating and distributing new LEIs so regulators can keep better tabs on systemic risk by knowing just which firms are trading which securities, when and for how much. The timetable for delivery has been set for March 2013, but could well be delayed. The central operating unit is supposed to oversee and create standards for local operating units which issue LEIs for financial firms in their home markets.
Although DTCC has often touted the merits of its Avox subsidiary as evidence of its skills in the counterparty data management market, it has assigned a separate group the task of creating and validating CICIs and associated reference data. "Avox will simply be using the data developed by the CICI program to supplement the data it researches and validates itself," says Hodash.
Written by Chris Kentouris, Editor-in-chief (Chris can be contacted through Chris.Kentouris@hotmail.com)