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Screenshot of a breaking news alert e-mail from Q2 2017
In answer to a requirement taking effect on January 3, 2018 that investment firms uniquely identify parties to trades or transactions under Europe’s Markets in Financial Instruments Directive (MiFID II), Thomson Reuters (NYSE:TRI) announced that is launching its LEI Profiling Service, a dedicated solution for financial institutions to perform a health check on their LEI (legal entity identifier) content and help them comply with MiFID II.
Thomson Reuters LEI Profiling Service generates client-specific reports that help financial institutions to assess the quality of their LEI data held against internal client records in accordance with MiFID II’s reporting requirements – notably a “No LEI, No Trade” stipulation that firms obtain a LEI from their clients for any transaction before they can provide a service resulting in a reporting obligation. It enables them not only to positively identify gaps which need to be closed prior to Jan. 3, 2018, but also to affirm data quality within their reportable client universes.
This is the first time that a “No LEI, No Trade” rule is coming into force, and that is causing a lot of concern in the industry,” said Mark Davies, global head of RMS Data Services at Thomson Reuters. “By using the content, technology and expertise residing in our LEI Profiling Service, firms can quickly and confidently assess their readiness to report under MiFID II and avoid the negative impact to their client relationships that would otherwise result from missing identifiers.
The forthcoming new European rules will mandate both EU and non-EU market participants (e.g. entities) to obtain an LEI in order to trade and clear an underlying transaction and extend it not just to direct counterparties, but also to the issuers of in-scope financial instruments.
The new service allows clients to identify those entities which have yet to request LEIs and, equally important, where LEIs exist determine their status. Upon adoption of the new service, clients send their entities of interest to Thomson Reuters, which then matches these against the LEI records stored within the Thomson Reuters Avox Database, which maintains 100 percent LEI coverage, based on daily updates from the Global Legal Entity Identifier Foundation. Since Thomson Reuters March 2017 acquisition and integration of Avox, this growing database exceeds 2.5 million entities and covers multiple jurisdictions and entity types. The resulting unique reports returned to clients contain line-by-line status on each entity record submitted.
Other benefits of Thomson Reuters LEI Profiling Service to subscribers include:
- Comprehensive LEI content – mapped daily by the Thomson Reuters team, which will track the large volume of new LEIs being issued in the coming months
- Established experience – leveraging the same matching technology and methodology that has been used to onboard and match client data files in the Avox Managed Data Service
- Reduced cost and time – allows firms to focus now on proactive client outreach for known entity record gaps rather than on reconciliation of internal content