Euroclear Bank and SmartStream have signed an agreement to provide a centralised reference data utility service, complying with the new post-crash rules requiring greater transparency.
Known as the central data utility (CDU), the Euroclear Bank service will source securities data from data vendors as well as from data originators, such as central securities depositories (CSDs) and stock exchanges. Powered by SmartStream technology, the securities data processed in the CDU will first be validated, cleansed of inaccuracies and then enriched before being relayed to clients in the precise format that the client has chosen, on an intra-day basis.
By pooling extensive data management expertise, SmartStream and Euroclear Bank will hope to deliver meaningful value-add client back office savings, twinned with high levels of securities information accuracy.
Initially starting with Eurobond data and subsequently expanding to other asset types from a broad geographic scope of markets, the new as yet unpriced service is easily accessible as market participants simply have to sign up to a centralised utility. Differently priced package options are likely to be available to different users. CDU clients can benefit from a centralised and simplified process to access cleansed data from their chosen data vendors.
Commenting on the link-up, Yves Poullet, chief executive of Euroclear Bank, said: "Capital market firms attribute 35-40% of all trade breaks they experience to avoidable mismatches in reference data. Through our partnership with SmartStream, we aim to drastically reduce the number of mismatches by providing the highest quality of data accuracy, including the use of in-house information and a comprehensive network of other data providers. Firms no longer need to bear the enormous costs and risks of scrubbing securities information themselves. Estimates put back-office client savings at EUR20m per year and more for those high-volume consumers of securities data that choose to receive refined data from the CDU."