DTCC launches client data and documentation utility
The Depository Trust & Clearing Corporation (DTCC) has launched a utility to centralise the client data and documents of financial institutions including those of fund managers.
The service – Clarient Entity Hub – is designed to provide increased controls, automation and standardisation during the client on-boarding process and on-going client relationship. Clarient Entity Hub will also enable market participants to deal with internal risk management requirements and Know Your Customer (KYC) checks, the Foreign Account Tax Compliance Act (FATCA) and other global tax reporting rules.
Clarient Entity Hub is owned by Clarient Global, a DTCC company founded along with BNY Mellon, Barclays, Credit Suisse, J.P. Morgan, Goldman Sachs and State Street. It will be headed by Matthew Stauffer. The service will leverage reference data from DTCC’s set of client reference data services including Avox and Omgeo ALERT. Clarient Entity Hub will also be fully integrated with the DTCC Client Reference Data and Enrichment service, a portal which collects counterparty information required for delegated derivatives reporting as mandated under the European Market Infrastructure Regulation (EMIR).
“The platform ultimately provides banks, broker-dealers and fund managers with a single interface and enables these institutions to have greater control over client data and documentation. Fund managers, for example, will provide data and documents for the entity onto the platform, and their bank counterparties can obtain permission from the fund manager to review that information. It is a straight-through process and will help reduce operational overheads and risk,” said Matthew Stauffer, president and chief executive officer at Clarient.
There have been widespread calls for a centralised utility of this kind for some time now. “This is an area that has increased in focus recently, driven by the costs and complexities in managing the sheer volume of client information that needs to be disclosed to banks and broker-dealers – and these volumes continue to grow. The increased focus has also been regulatory-driven. Regulation, such as Dodd-Frank, EMIR, FATCA and other requirements such as KYC have driven a greater demand for information from regulators and have made operations and client data management complicated,” continued Stauffer.
A survey of 50 fund administrators by COOConnect in 2013 found 62% would be willing to invest in an investor data utility, with 60% of the larger respondents favouring a “not-for-profit” utility.