By Carol E. Curtis
Counterparty data management specialist Avox said today that it is teaming with Markit Group to provide mutual customers with consistent business entity data and documentation.
Under the agreement, Wrexham, U.K.-based Avox will be able to update business entity information by accessing documentation on the Markit Document Exchange platform that relates to mutual clients. The Markit system acts as a central repository for users’ public and private records, which are often the authoritative source in areas like ownership structures and need to be stored by stakeholders in a transaction.
The companies’ common clients include Barclays, Citigroup and Royal Bank of Scotland, among other large financial institutions and investment banks, said Ken Price, CEO and co-founder of Avox, majority-owned by Deutsche Borse. “Firms that do this on their own find that it is very manually intensive,” he said. “There is a big synergy by virtue of the fact that we are doing the job once for many firms.”
In a statement, Price added that the partnership will minimize the risks associated with using inaccurate business entity data in know-your-customer, Basell II and anti-money-laundering efforts. “By leveraging a centralized service managed by Avox and Markit, our mutual clients save time, money and effort,” he said.
London- and New York-based Markit, a provider of data and valuations services with more than 1,500 financial institution clients, launched Document Exchange last year. The documentation library allows buy- and sell-side users to upload relevant paperwork once and determine which counterparties will have access. “By partnering with Avox,” said Penny Davenport, managing director and head of Document Exchange, “we saw a unique opportunity to provide our users with further assurance that business entity information and associated documents within the platform are fully up to date.”
The information that the partnership will help update can be as basic as the legal name of a hedge fund or as complicated as the ownership structure of the fund, said Price. The areas that are encompassed include regulatory status, data points and other key financial information.
“The industry has gone through a horrific time,” he said. “If you have counterparty exposure such as, for example, a fund in which Lehman Brothers may have had an ownership stake, you need to know that obligations will no longer be honored. It is important to keep this information up to date. Also, clients can get in trouble with regulators if they do not fully understand their counterparty exposures.”
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