By Chris Kentouris
Asset Control has expanded its reach in the counterparty data business by integrating business entity information from Wrexham, U.K.-based Avox into its AC Plus data-scrubbing system.
In a joint statement issued February 12, the companies said that adding Avox counterparty data and proprietary identification codes to the Asset Control platform will give financial institutions an accurate and auditable data management process for compliance and risk management purposes. In the current environment, maintaining up-to-date counterparty data - that is consistent across multiple business lines - has become a priority for many firms.
Ken Price, CEO of Avox, which is majority-owned by Deutsche Borse, noted that the partnership will allow mutual customers to "access validated and stress-tested data and freely distribute it across multiple systems, business units and locations within their organizations." Asset Control and Avox already have a common client that will use the integrated solution, said Price; another is expected to sign up shortly.
Avox accepts counterparty data files from its 30 customers - mostly large banks - and reconciles the information with the original sources. The verified data and audit trails are transmitted to other clients who hold the same record. The agreement with Asset Control, which counts 30 buy- and sell-side firms among its more than 45 clients, is Avoxs second with a data management technology provider. It inked a similar deal with New York-based GoldenSource Corp. last year.
Martin Groot, director of market strategy for New York-based Asset Control, said that his company has offered counterparty data services in the past, but only on a project-by-project basis. "Avox has a unique business model in how it creates the counterparty data feed, and our strength is in the software side," said Groot. "We can offer an online view of the Avox data with retention, audit, query and manipulation capabilities, which will allow clients to add their own data sources or cross-link Avox data with their other reference data."
"Such an alignment of reference and counterparty data," he added, "allows firms to better manage their credit and operational risk because of increased transparency and insight into an entitys legal structure."
Product reference data typically describes a security, while counterparty data refers to the legal entities with which a firm does business, such as trading partners and clients. Inaccurate reference data can cause failed transactions and increase risk, and misidentifying a counterparty can have costly legal and financial ramifications. Large institutions typically maintain more than one database for business entity information, each with potentially different information depending on the source and the requirements of the end user - customer service, risk management, compliance, trading or operations staff.
Phil Lynch, president and CEO of Asset Control, added in a statement that the joint solution "will help financial organizations to minimize latency of entity data within a proven centralized information framework."
This article was originally published on SecuritiesIndustry.com.
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