FT Interactive Data Europe has formed an alliance with the business entity data content and services provider Avox – formerly known as Azdex – to provide a business entity data service aimed at helping customers to meet their requirements for compliance under regulations such as the European Commission’s Undertakings for Collective Investments in Transferable Securities (UCITS III) directive.
The new service will combine Avox’s parent-issuer level content with FT Interactive Data’s issue level content and will be offered as an optional module within FT Interactive Data’s FTST portfolio administration service.
Increased global risk management requirements for industry compliance and accountability through new regulations such as UCITS III have fuelled a growing need for business entity data to perform issue-issuer-parent entity linkages, says FT Interactive.
Under UCITS III total exposure to a particular parent organisation through all its subsidiaries must be calculated and managed in order to ensure that the total exposure falls within the limits set by the regulator. This process of concentration risk management is often referred to as ‘group notion.’
FT Interactive expects an increase in demand for business entity data amongst European fund management administrators to coincide with the ending of the ‘grandfathering’ period for funds created under the preceding UCITS directive in February 2007. In addition to UCITS III, Basel II and MiFID requirements may also have an impact on demand for business entity data throughout 2007.
“Many customers tell us they need a comprehensive and affordable service offering business entity linkages data that will help them meet their UCITS III compliance requirements,” says Bob Cumberbatch, FT Interactive Data’s European business director. “They need to identify and maintain linkages that determine which issues link into which issuers, and which issuers link into which higher entities or parent organisations. Business entity data is a specialised area – corporate actions alone cannot be relied on to capture all of the changes that occur either to an individual business entity or within a corporate group’s organisational structure.”
FT Interactive Data intends to offer its auto-matched, hand researched business entity data service via FTS on a per entity request basis. The service will be monitored on a daily basis.