AlacraBlog

The Alacra Authority File

For several years Alacra has been playing in both the reference data arena with our Concordance services and in the Know-Your-Customer (KYC) / anti-money laundering (AML) arena with Alacra Compliance.  We’ve been talking to customers about how these two worlds were going to converge, especially in light of the regulatory and industry push to establish a global Legal Entity Identifier.  Today, with the formal release of the Alacra Authority File, we’re providing the first real cost-effective bridge between these two worlds.

The Alacra Authority file contains enriched and enhanced reference data on over 180,000 global entities.  Criteria for admission, if you will, is if an entity has a listed security, is rated by one of over 30 different bank regulators around the world, or is rated by either Moody’s, S&P, Fitch or AM Best.  So the Authority File contains a large common set of most financial institutions customers and counterparties.  It also contains any entity that has a certified CFTC Interim Compliant Identifier (CICI) and will eventually contain any entity that has a certified LEI.

The use cases cross between reference data and compliance.  For the reference data area we help populate a reference data repository, eliminate/reduce multiple reference data silos, or improve the overall quality of a reference data warehouse.  We also expand the number of data attributes for CICI entities and can help prepare an organization for LEI integration. 

In compliance, the Authority File can be used to check regulatory, listing and rating status, which at many financial institutions help determine whether or not an entity is low-risk.  This is important in new client onboarding as well as periodic refresh.  Several clients already have a check of the Alacra Authority File built into their Alacra Compliance deployment.

The most valuable component of the Authority File is that we’re updating the database with new events – every change to the database – every day.  So reference data and important compliance/risk data is always current and accurate.  This includes name and address changes; new ultimate parents (through M&A transactions); bankruptcies; and listing, ratings and regulatory status changes. 

Finally, for all these entities, we have our full entity identifier map available.  Issuer IDs, DUNs, Markit Red, FSA FRN, Swift BIC and dozens more.  For Alacra, this is an incredible product release that has been about a year in the making.  Great team effort in-house, and we had lots of advice and assistance from several key financial institution customers.  Ping me if you want to know more.

 

The Alacra Periodic Table of Entity and Security Identifiers

Prior to the 2008 financial crisis there had been a complicated web of banking regulations that affected financial institutions around the world.   In response to the financial crisis, regulators have been busy at work drafting new regulations aimed at reducing the chances of a similar meltdown in the future.  Earlier this summer we released the Periodic Table of Bank Regulation and Compliance which helps identify and explain the various global regulatory regimes under which financial institutions now operate as well as several other regulations that are pending. 

Part of the stepped up regulatory activity is the Global Legal Entity Identifier (LEI) initiative, which is being guided by the Financial Stability Board (FSB).  The FSB “has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability.” 

The LEI concept has been discussed for many years.  The resurgence of interest has been caused by the Dodd-Frank legislation which established the Office of Financial Research (OFR).  The OFR, in November of 2010, published a policy statement to promote the establishment of a universal Legal Entity Identifier (LEI).  In parallel, the CFTC and the SEC proposed rules for reporting swap derivative transactions that would utilize a universal identifier.  To make this a global initiative, the FSB is now the guiding hand.


One of the advantages of the LEI will be to help map the many disparate entity identifiers that are currently in use at financial institutions.  Entity identifier mapping is one of Alacra’s core competencies.  For this reason we have released the Alacra Periodic Table of Entity and Security Identifiers.  Please take a look and send us any comments you may have.