Asset Control has integrated its AC Plus data management platform with the Derivatives Service Bureau (DSB) to bring ISIN creation and reference data lookup for OTC derivative instruments closer together and thus deliver a more robust solution for full MiFID II compliance.
The Derivatives Service Bureau (DSB) has recently launched its automated system for allocating product reference numbers to OTC derivatives, developed by the Association of National Numbering Agencies (ANNA) with London-based Etrading Software.
The ID creation service, known as an International Securities Identification Number (ISIN), assigns a unique identification code to each new security as it is issued, leading to a global adoption of the ISIN numbers to meet a new regulatory requirement in the European Union from 2018.
The ISINs have traditionally been used across the listed asset classes such as equities and bonds, but not for OTC derivatives. But since the product now falls under the scope of MiFID, it proved problematic as OTC derivatives have never had ISINs, and the traditional method of issuing ISINs does not work for them.
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For the first time, MiFID II, which comes into force in January 2018, requires the use of unique ISIN numbers for certain derivatives in the OTC market before any new instrument starts trading on an EU trading venue. Although the use of product identifiers for this segment of the industry is only mandated by European regulators, the DSB will offer the solution on a worldwide basis.
AC Plus is Asset Control’s solution for data aggregation and storage which also includes pre-built mapping tables, cleansing rules and off-the-shelf interfaces to major data vendors. The service consolidates multiple vendor data feeds into golden copy of data sets.
According to Martijn Groot, VP Product Management at Asset Control: “MiFID II regulation presents the need for organisations to retrieve a specific set of data including, but not limited to, ISIN codes and TOTV and uTOTV flags for new as well as existing OTC derivatives. To do this, users are required to supply the Product Definition and further Input Attributes to the DSB via their RESTful API, the FIX Protocol or a web GUI.”
Mark Hepsworth, CEO, Asset Control, concluded: “Asset Control’s new integration with DSB services will act as a bridge between requesting user systems and our existing, flagship AC Plus solution. In combination with its fully maintained data model and vendor integration, AC Plus will represent a holistic solution for the end to end tracking of master data, further emphasising our focus on helping to ensure that users are truly MiFID II ready.”