My ipad, and your derivatives April 22, 2013 at 5:55 pm
Those of you with multiple devices – and most of us these days have at least two out of a phone, a tablet, a laptop, a desktop and an ipod-like thing – will be familiar with the nightmare of sync. This is particularly painful with music: you have it nicely set up in one place, yet somehow it ends up as a mess after transfer. A particular culprit here is itunes, which (1) Apple forces you to use and (2) seems to me to be as respectful of my music labeling as a con man at an easy marks convention. As a result, (be warned, painful confession coming up) my ipad thinks I have music by Pink, P!nk and P!ink with a Kanji character on the end that I can’t even copy; it thinks my Brahms fourth symphony is by Karajan and that Stranglers and The Stranglers are different artists. It has UB 40 and UB40, it puts plainsong under ‘Unknown’, and it is very very fond of ‘Unknown Album, Unknown Artist’. This is rather irritating and it takes a while to fix.
Given the state of this relatively small data set, rather little of which was manually entered*, imagine how good banks legal entity identifiers are, given that they could from a much bigger database much of which has been typed in. There is, it is fair to say, the possibility of error. In particular, just like my multiple Pinks, there is some chance of finding The Goldman Sachs Group, Inc. and Goldman Sachs Group, Inc or even The Goldman Sachs Group, Inc in your counterparty database. (That period is easily missed.) And if one bank can’t always get it right, how much harder is it to sync this data across the whole industry? The legal entity identifier (‘LEI’) project tries to do that, and it is much to be applauded. In particular without initiatives like this, trade repository data is a lot less useful.
Deadlines for getting LEI data into shape are approaching. As Katten Muchin Rosenman remind us:
Every swap end user (i.e., any party to an outstanding derivative contract who is not a swap dealer or major swap participant) should be aware that April 10, 2013 is the deadline for obtaining a “CFTC Interim Compliant Identifier” number (or CICI) in connection with its swap activities. The requirement arises under Commodity Futures Trading Commission Rule 45.6(f), which specifies that every “swap counterparty” must use a legal entity identifier (LEI) in all recordkeeping.
Meanwhile the data cleaners are doing a rather more systematic job than me swearing at itunes. This is well underway at many banks but, for those laggards, Mark Davies has a point: “processes relating to business entity reference data will require attention sooner rather than later”.
*Most of my music is from CD, and most of those auto-load the album and track information when they are ripped. The databases that information comes from, mind you, are not perfect.