Driving True Business Value Out of the Legal Entity Data

Apr 26, 2018 by Xoriant Corporation

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.