Buy and sell side firms must ensure they have a clear view of their exposures
By Mark Davies, managing director of DTCC
Europe and general manager at Avox Data Services
For a number of years now, financial
institutions have wrestled with the challenge of identifying,
sourcing and maintaining legal entity data, critical for
accurate regulatory reporting and effective risk management. It
is now more than four years since the first derivatives
reporting regulations requiring the use of the legal entity
identifier (LEI) began and during that time we have seen many
additional reporting deadlines pass, each with their own unique
needs and nuances.
Legal entity data is not only essential
for derivatives and tax reporting in multiple jurisdictions,
but also for credit risk, capital and liquidity calculation
purposes under Basel III. Nevertheless, many firms find
sourcing and maintaining this data challenging, and much still
needs to be done in order for these firms to meet the
requirements outlined in these regulatory mandates. But with
increasing numbers of regulatory regimes requiring the use of
legal entity data, anticipating the need to incorporate new
data fields as additional regulations are introduced may well
be considered by some as the new normal.
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