The Legal Entity Data is useful to eliminate counterparty risk but when maintained in line with regulatory requirements like MIFID, Solvency, FACTA etc. it can deliver both operational and business benefits. Major challenges faced in maintaining Legal Entity Data are:
Duplication
Legal entity matching is entity-type specific (e.g. Funds, SPVs, REIT)
Missed corporate actions introduce new entities from set-up processes
Client and counterparty set-up processes lack consistent duplicate prevention controls
Integration of additional sources perpetuates more Duplication
Names
Legal name vs. Doing Business As name vs. Legacy Name
Finding Registration
Third Party Accounts
Missed Corporate Actions
Addresses
Registered, Physical, Mailing
Branches Addresses
Many entities at same location
Missed Corporate Actions
Industry Classifications
Industry classification is subjective and error prone
Multiple standards such as SIC, NAICS, NACE, GICS, and even client-specific
Inconsistencies across standards – SIC to NAICS, NAICS 2009 to 2012
Hierarchy
Business vs Legal
Ultimate beneficial ownership
Missing intermediate parent entities
<50% ownership gaps in coverage
Missed Corporate Actions
The above given challenges don’t end here but need to check on regular basis; and needs to validate with the available updated information for any legal entity, to keep up with regulator corporate actions resulting in merger& acquisitions which further change ownership structures is also in itself is a laborious and time consuming effort. Since 2001, Xoriant CDi has been enhancing and implementing efficient data management workflows to better manage risk and reduce the cost of compliance without compromising on operational efficiency.
With years of experience Xoriant CDi has developed an innovative delivery platform CDi OnDemand to fulfill any reference data projects need. It has easily automated the process of delivering data projects related to beneficial ownership management, through pre-defined project templates namely hierarchy management, supporting both the above mentioned regulations of US & Europe based on AML guidelines.
CDi OnDemand Key Features
Tracks corporate action associated with the entity and implements same to maintain accuracy in customer relationship and ownership.
CDi OnDemand offers a clear view of beneficial ownership; ultimate or complete structure. Also showcases scenarios with broken tree & circular relationships
CDi OnDemand has a unique feature that allows effective cross-referencing of beneficial ownership information by certain identifiers.
Self-service model for gold copy database creation and management
Unlimited queries of Xoriant CDi entity database
Customized operational workflows
Rapid data aggregation
Elastic manpower – 24×5 access to CDi data stewards
Proactively managing data quality errors, such as duplicity in counterparty hierarchy, invalid values, etc.
