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Anastasia Dokuchaeva

May 9, 2017

Symbology and Reference Data:

A Mission to Regulatory Compliance

Agenda

• Brief Regulatory Update

• Regulatory Landscape as driver for New Data

– Ownership & Control

– Shipping Data

– Social Media

• The Need for Standards

– Symbology

– Classification

• Scope, Quality and Connectivity of Content is Key

2Copyright © 2017 FactSet Research Systems Inc. All rights reserved. Confidential: Do not forward.

Brief Regulatory Overview


The Alphabet Soup

Global Financial Regulations


• AIFMD

• AML

• Article 173

• Basel III

• BCBS

• BCBS 239

• BCBS 269

• BCR

• CCAR

• CFPB

• CFTC

• CFTC Rules 1.72 and

1.74

• CIC

• Club AMPERE

• Corep

• CROSS

• CRV IV

• SolvV

• DCAM

• DFAST

• Dodd-Frank

• D-SIB

• ECB

• ELTIF

• EMIR

• EPS

• ESG

• ESMA

• ETF

• FATCA

• FCA

• FDIC

• FIBO

• FIGI

• Finrep

• FIO

• FLAOR

• Form N-1A

• Form N-CEN

• Form N-Port

• Form PF

• FRB

• FSB

• FSN

• FSOC

• FTT

• GIIN

• GIPS

• GRC

• G-SIB

• G-SII

• HQLA

• IAIS

• ICS

• IFRS

• IFRS 9

• IMD

• SEC 1940 Act

• IOSCO

• GroMiKV

• KID

• KIID

• KYC

• LCR

• LEI

• MAD

• MAR

• MiFID II

• MiFIR

• NACE

• NAIC

• NTNI

• OCC

• OFAC

• OFR

• ORSA

• PFIC

• PRIIPs

• Reg 28

• RIA

• Schedule D

• SCR

• SEC 1940 Act, Rule

12d3

• SEF

• SIFI

• Solvency II

• SRRI

• TLAC

• TPT

• UCITS

• DOL Fiduciary Rule

• Article 173, French

Transition Law

• GroMiKV

• VAG

• CRM2

• MFRP

• Singapore MAS Risk

Change

• FRTB

• Hong Kong SFC

Liquidity Risk

• IDD Regulation

• The Italian Budget Act

2017

• IRS Section 871(m)

• TRIM

• Etc…

Alphabet Soup of FinReg


Financial Regulators

Regulatory Red Flags:

• Size

• Rapid Growth

• Complexity

• Exposures

Searching for Black Swans

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Systemic Risk

Capital Adequacy & Solvency

Transparency

Compliance

Global

Financial

Regulations

Costs of regulation

BIS estimates 158% of GDP

What is the cost of a

banking crisis?


“Hub & Spoke”

Solvency II AIFMD MiFID II KYC / AML

• Portfolio Positions

• Look-through

• Portfolio Positions

• Look-through

• RMS

• Transactions

• Supply Chain

• Customers, Suppliers, Partners,

HU

B • Symbology (ISIN, LEI, Internal ID, etc.)

• Taxonomies (CIC, NACE, Country

ISO)

• Instrument & Entity Metadata

• Terms & Conditions

• Parent Hierarchies

• Symbology

• Taxonomies

• Instrument & Entity Metadata

• Terms & Conditions


• Symbology (LEI, BBG FIGI, ISIN,

etc.)

• Taxonomies (CFI)

• Security Metadata (FISN)

• Issuer Metadata


• Symbology (LEI, SWIFT BIC,

ISIN)

• Taxonomies

• Entity Metadata

• Legal entity, legal address


• People

• Sanctions

• Ownership, etc.

• Documents and Fillings

• Risk

SP

OK

ES • Analytics

• Solvency Capital Requirement (SCR)

• Country and Single Name Exposures

• Stress Testing

• Portfolio Optimization

• Risk

• Analytics

• Valuation

• Single Name

• Country

• Risk

• Analytics

• Counterparty exposure

• Risk

• Single Name Exposure

• Control or Influence

• Reputational damages

• Etc.

• Reporting (QRTs, Tripartite, XBRL) • Reporting (KIID, Factsheets, etc.) • Reporting

• Post-trade Reporting

• Costs to investors

• Utility / Dashboard (Excel)

• Managed Services


Use Case – Single Name Exposure


Corporate Hierarchy


Single Name Exposure


55.26% held by ult. parent

Top 5 Holders

KYC – Suppliers, Customers, Partners

Telecommunication Networks of 1930’s

How well can business organizations organize all of their content at an enterprise level?


Enterprise Data Governance: Legacy View


Enterprise Data View

• Data is generated on an operating unit by operating unit basis

• Data silos are created and it is challenging to aggregate operating unit data at enterprise level

– Alpha Generation

– Risk and Regulatory Reporting

– Uncover relationships that potentially lead to conflicts of interest

– Leverage aggregated content for analysis to drive strategic insight

– Extend the ability to cross-sell

Technology Stack vs. Metadata


Data Governance

Technology Stack vs

• Data Centre

• Operating System Platform

• Database Engine

• Master Data Management Tools

• Publishing/Visualization Engine

• Analytics/Machine Learning

Metadata

• Pricing/Tick Data

• Listing Level

• Ticker/MIC Code, SEDOL, FactSet PermID

• Security Level (Evaluated Pricing)

• ISIN, BBG ID, CUSIP, FactSet PermID

• Options/Commodities/Futures

• Issuer/Entity Level

• Corporate Hierarchies

• Legal Parent, Credit Parent

• Ownership

• Relationships

• Suppliers, Competitors, People etc..

• Transactions

• M&A, Pvt Equity, VC, New Issues


Technology Stack vs Metadata

• Many Enterprise projects invest heavily in the technology stack and generally ignore potential metadata improvements

• Connecting and enhancing metadata is a critical piece in creating an enterprise wide ‘data’ network where data conversations can take place

• Data connectivity is the direct result of effective data governance

Data Connectivity

This connected content architecture can enable organizations to organize and optimize the organization of its content assets to drive multiple use cases

and lower total cost of ownership long term

• Alpha, Risk/Compliance, Data Governance


A Critical Component of Value: Connecting the Data

“The value of a telecommunications network is proportional to the square of the number of connected users of the system.”

Metcalf’s Law:


Valu

e o

f D

ata

Number of Connections

Connecting Data Along Many Dimensions

Breadth & Organization of Content

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Listing Level

Identifiers

Exchange

Currency

Inception/Termination

Date

Issuing Entity

Pricing

Security Level

IdentifiersObligor and Guarantor

Ownership

Issuing Entity

FundamentalsEstimates

Pricing

Terms & Conditions

People Level

Investments (Private Equity)

Specifications

Corporate Affiliations

Non-Profit Affiliations

Academic Affiliations

Blog and Contact Info

Ownership

Entity Level

Parent Hierarchy

Fundamentals

Supply Chain Relationships

Ownership

Securities

Investments (Private Equity)

Transactions (M&A)

Regulatory Information

Estimates

Entity Level Entity 000N1N-EInternational Business Machine Corp. (IBM)

People Level Officer 007GQX-E Virginia M. Rometty

Security Level Primary Securities MCPQD9-S-US 459200101

Listing Level Listing MCPQD9-S-GB IBM-GB

MCPQD9-S-PE IBM-US

MCPQD9-S-MX IBM-PE

MCPQD9-S-MX IBM-MX

MCPQD9-S-CH IBM-CH

Factorials (Connected Data)

5 ! = 5 × 4 × 3 × 2 × 1 = 120https://en.wikipedia.org/wiki/Factorial


8000! = 5.18418106 E+27752

On LEI - Legal Entity Identifier

Total LEIs Issued: 507,195 (As of May 8th, 2017)

23

63%

32%

3%1%1%0%0% Europe

North America

Asia

Pacific

Latin America

Africa

Middle East

By Country By Entity Type Bye Ultimate Parent

USA 126,422 Private Company 252,430 Deutsche Bank AG 3,312

Italy 49,054 Subsidiary 103,266 SAS Rue la Boetie 3,225

Germany 47,503 Mutual Fd-Open End 60,237 BNP Paribas SA 3,094

France 32,593 Extinct 18,716 BlackRock, Inc. 2,833

UK 31,924 Hedge Fund 10,730 Allianz SE 2,614

Luxembourg 23,383 Public Company 9,774 KBC Group SA/NV 2,279

Canada 22,073 Mutual Fd-Closed End 7,009 HSBC Holdings Plc 1,932

66%

31%

2%1%0%0%0%0%Issued

Lapsed

Retired

Merged

Duplicate

Annulled

Pending_Transfer

Pending_Archival

Connecting LEIs to ISINs


Leverage Metadata to Connect and Organize


Listing Level

Ticker / Trading Venue

Currency

SEDOL/Listing Level ID’s

Tick Data/Time

Closing Date

Closing Price

Trading Volume

Security Level

ISIN/CUSIP/BBG/Perm ID

Consolidated Pricing

Consolidated Volume

Evaluated Pricing

Estimates (Per Share)

Fundamentals (Per Share)

Terms & Conditions

Corporate Actions

Registration Statements

Ownership

Issuer

Issuer/Entity Level

Internal ID’s/Entity ID

Fundamentals

Revere Geo Revenue

Estimates

Ownership

Supply Chain

Corporate Hierarchy

Legal

Credit

‘Economic Entity’

Parent Changes

Capital Structure (Debt/Equity)

News/Filings/Transcripts

Transactions

M&A

Private Equity

Venture Capital

Sanctions

Third Party

Credit Ratings

LEI

SWIFT/BIC

People Level

Corporate Affiliations

Non-Profit Affiliations

Academic Affiliations

Ownership

Filings/Transcripts

Executive Compensation

Data Governance

• Data governance effectively executed creates an enterprise network of connected metadata.

• No need to ‘rip up’ the plumbing.

• Speak same language – Leverage and connect metadata by sharing common identifiers for listings, securities, entities and people

• Data Connectivity = ‘Smart Data’

• Plug and Play

• Fully optimize total cost of ownership

• Retain pricing power

• Smart Data help drives Enterprise Innovation

• Single Framework to support multiple use cases

• Data needs to be evaluated in three dimensions

• Content Data Set Metadata Quality (Coverage, Timeliness, Accuracy)

• Data Connectivity

• Point in Time/Historical


Enterprise Data Governance: Entity Resolution in Place via Smart Indexing/Concordance


ABC Co: 123

Common Identifier = Highly Organized

Content (i.e., Smart Data) to drive analytics and create

insights

Banking

ABC Co: 123

Sales & Trading

ABC Co:123

Research

ABC Co: 123

With a common entity key data points now become

connected!

Use Cases – Data Connectivity


KYC - Sanctions

US Customs Shipping Data

Shipper Ultimate Parent is Government of Singapore

Social Media / Adverse Media / Reputational Damage


Level of Granularity Required / Desired


FactSet Resources & Solutions

FactSet Regulatory Solutions

Staying competitive in the regulatory environment

• Whitepapers

• Case Studies

• Product Overview

www.solutions.factset.com/SmartData

Thought Leadership

• Topical articles

• WebCasts

• Events

www.factset.com/InSight


http://www.solutions.factset.com/SmartData

http://www.factset.com/InSight


Thank you!

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