Large banks have struggled for years with the wish to create a single set of business entity identifiers that they could use to track lending, counterparty and other relationships throughout the bank and to generate enterprise-wide reports. For instance, a bank that wanted to know all of its exposures and relationships with Lehman at the time of its bankruptcy might have a hard time because the firm might be identified as Lehman Brothers in one application, as a Lehman subsidiary in another report, and by its tax identification number in another place. Many banks including Morgan Stanley have created their own set of common identifiers.
For those that haven't, one option is a new directory being rolled out by Cusip Global Service and Avox Limited, a majority-owned subsidiary of the Deutsche Borse Group, called the Cabre Directory Service. The directory uses a new standard code developed by CGS and Avox that identifies issuers, obligors and counterparties on a global basis.
""With regulatory oversight continuing to focus on single name exposure and the need to identify issuers, counterparties and obligors, interest in the Cabre has increased since CGS and Avox announced their partnership last year," said Scott Preiss, vice president for Cusip Global Services in New York, in a statement.
The Cabre has been designed as a 10-character code that contains the 2-character ISO domicile code based on the location of the entity and embeds the Cusip Issuer number, when available. The service will be offered to global market participants in a bulk-file format. This initial offering contains Cabres, Avox IDs and location data for over 250,000 entities from around the world and across all industry classes. The goal for CGS and Avox is to identify every institution involved in the lifecycle of a financial instrument.
"The availability of a Cabre for each entity location will ultimately help our clients manage diverse areas of their organizations, such as financial controls, risk management, anti-money laundering and operations," said Ken Price, CEO of Avox, in the statement.
Cusip Global Services and Avox support the development of an ISO standard that seeks to develop a common language for global identification of entities but see a near-term need to replace the array of proprietary codes that are currently used by counterparties.