Internal Instrument Reference Database Implementation Pays Off for Cesr

PARIS - The Committee of European Securities Regulators (Cesr) has gone live with an internal instrument reference database, which has helped facilitate data aggregation, according to Ajra Voipio, senior adviser at Finnish regulator the Financial Services Authority Finland and chairperson of the IT management and governance group at Cesr.

The Cesr internal database with instrument reference data was created to help route transaction information on the Transaction Reporting Exchange Mechanism platform, implemented to link European regulators following the introduction of Mifid. "The European integration calls for more harmonized solutions," said Voipio, speaking at the Third Annual Reference Data Management in the Banking Industry conference in London in February.

The database, covering 29 countries in the EU and the European Economic Area, was initially set up as an interim system, and the final platform, based in Paris, went live in November.

There are 500,000 instruments in the database at any point in time, and the data is seen to be unique. Voipio said Cesr tried to source the data from information vendors around four years ago, and was happy to take it from them. But the vendors later realized they could not supply the data at a reasonable price.

Instead, Cesr receives the data from regulated markets, an arrangement based on provisions in the Level II Mifid regulation and an agreement with the Federation of European Securities Exchanges (FESE). Under the Level II regulation, regulated markets, exchanges, are obliged to send data on all instruments admitted to trade on the market to local regulators. Regulators then send the data to Cesr, and Cesr maintains it in the reference database.

Cesr members exchange information, and regulators send each transaction report to the relevant authority, the regulator in charge of that specific instrument. Reference data is needed to determine the competent authority for every instrument in accordance with the Mifid rules.

"We actually face many of the same reference data challenges as the industry," Voipio said, explaining that regulators are dependent on high-quality reference data for internal purposes as routing is based on reference information.

The internal database has also created opportunities for data analysis, and Voipio said one of the benefits has been that Cesr can now assess the number of instruments in Europe and aggregate figures. However, the reference database is not public, and Cesr cannot share the data with the market. Under the agreement with FESE, Cesr cannot publish this information, she said.

Meanwhile, Cesr has recently restructured the group, and what used to be called Cesr-Tech, a unit set up to strengthen the information technology governance structure, has now become the IT management and governance group. Voipio will continue to chair the group.