Since 2008 many of the executives or Chief Data Officers that lead enterprise data programs throughout the financial services industry have been constantly adapting those programs to an unending list of new regulations. The latest that many are now studying is Single-Counterparty Credit Limits (SCCL) for Large BankingOrganizations. On the surface, it seems pretty simple and logical; let's ensure that the exposure to any single counterparty is not too great. As with all regulations though, the devil is in the details. Rather than summarize the regulation for you, I'll highlight a few key sections that emphasize the need for reliable reference data, or a master data strategy. In particular, let's take a look at the key terms related to a legal entity (one of my favorite topics).
Here's what you need to know...
There are specific definitions related to legal entities and their hierarchies that are important:
Financial entity means:
A depository institution;
These definitions, and further hierarchical implications come through later on when calculating exposure:
"In determining whether a U.S. intermediate holding company complies with these limits, exposures of the U.S. intermediate holding company itself and its subsidiaries would need to be taken into account.
Additionally, we see our entities, securities, accounts, and other reference data come through in the definition of credit exposure:
"Credit exposure to a company is defined in section 165(e) of the Dodd-Frank Act to mean
Throughout SCCL we see the importance of legal entity data, hierarchy data, security master, account data - the usual suspects we've been talking about for years and years. This reaffirms that reference data - specifically legal entity data - is a safe investment in 2016 and 2017. Regulations like SCCL are going to expect that reference data is governed, available for reporting, and accurate. Is yours?
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