Avox - Deutsche Börse AG
Avox - Deutsche Börse AG
Avox - Deutsche Börse AG
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<strong>Avox</strong> –<br />
Entwicklung zum Standard für Banken<br />
Leading Legal Entity Data Provider for Financial Institutions<br />
Back Office Data Summit 2007
Content<br />
1<br />
2<br />
3<br />
4<br />
<strong>Avox</strong> - what it is<br />
Cooperation with SWIFT<br />
Corporate Hierarchies<br />
Close Link Detection
Business Driver: Requirement for<br />
clean and up-to-date Legal Entity Data<br />
What?<br />
Data Type:<br />
Legal Entity Data (Business<br />
Clients, Trading Counterparties,<br />
other Business Partners)<br />
Data Universe:<br />
All Legal Entities (no Retail<br />
Clients) worldwide in all<br />
geographies and all industry<br />
sectors<br />
Data Content:<br />
-Unique Identifier of Legal Entity<br />
-Legal Company Name<br />
-Address Information (registered<br />
address and headquarter)<br />
-Ownership Structure<br />
-Industry Codes and Classification<br />
(BIC, NACE, etc)<br />
•Comliance Risk (avoiding terrorism financing<br />
and money laundering)<br />
•Reputational Risk (sending account statements<br />
to the wrong address)<br />
Why?<br />
1. On global average 22% of all client or<br />
counterparty data is incorrect<br />
2. 20% of all legal entities changes per year<br />
FORMATTING 35% 45% 95%<br />
0% 100%<br />
POPULATION<br />
66% 81% 97%<br />
0% 100%<br />
DE-DUPLICATION<br />
10% 80% 99%<br />
ACCURACY<br />
Worst Average Best<br />
0% 100%<br />
58% 78% 96%<br />
0% 100%<br />
•Credit Risk (understand risk exposure towards<br />
region, sector and ultimate parent)<br />
•Operational Risk (capital requirements for Basel II)<br />
How?<br />
<strong>Avox</strong> provides clean and up-to-date<br />
client and counterparty data on a<br />
daily basis using:<br />
-Authoritative sources<br />
(courthouses)<br />
-Own manual research<br />
-Newsfeeds and Corporate Action<br />
consolidators<br />
-Banking Network (70% of the<br />
updates)<br />
All data is kept private and<br />
confidential<br />
No data license fee applies<br />
Easy client integration<br />
•Extended trading limits<br />
•Adequate netting capabilities<br />
•Reduced capital requirements<br />
•Reduced counterparty risk
<strong>Avox</strong> – Company Overview<br />
Who is <strong>Avox</strong><br />
§ The leading Network for Financial Institutions to verify Legal Entity Data *<br />
§ Founded in London (UK) in 2003<br />
§ A 76% subsidiary of <strong>Deutsche</strong> Boerse Group<br />
§ Headquarters in Wrexham<br />
Offices in London, Frankfurt, Paris, New York, Toronto, Sydney and<br />
Johannesburg<br />
§ <strong>Avox</strong> cleans and maintains 1,000,000 Legal Entities out of 160 countries<br />
§ Customers include: Citigroup, Barclays Capital, Royal Bank of Scotland, Halifax<br />
Bank of Scotland, Société Générale, Allianz, SWIFT and Dresdner Kleinwort<br />
* Addresses, Ownership structure, Parent Information, Codes (BIC, RIC, DUNS-No, etc), Basic Data ( Fiscal Year, Legal<br />
Form, Industrial Code & Description)
<strong>Avox</strong> combines authorative sources<br />
with updates from the banks themselves<br />
Contribute their updates<br />
Client A Client B Client C<br />
Receive cleansed and/or updated data records<br />
with sources and audit trails<br />
…<br />
70% 25% 5%<br />
Research Trigger<br />
<strong>Avox</strong> Analysts Research<br />
<strong>Avox</strong> CORE<br />
(Corroborated Record)<br />
Customized client reports<br />
Vendor* A Vendor* B<br />
of all detected<br />
updates to record<br />
…<br />
(<strong>Avox</strong> market knowledge,<br />
„picked off the floor“)<br />
Official Sources:<br />
Companies House, Bundesanzeiger, etc<br />
Official Documents:<br />
Local courthouses<br />
Companies Webpage:<br />
Annual Reports, Impressum, Investor Rel.<br />
* Information vendor sources<br />
include LexisNexis,<br />
MergerMarket and FTID
“YouData”<br />
Such as YouTube, Wikipedia or other online contribution<br />
mechanisms, <strong>Avox</strong> is built around the concept of<br />
community and sharing.<br />
Participants share their updates and knowledge about legal<br />
entities amongst each other, hence generating the best<br />
and most accurate information source for legal entity data<br />
information available in the market.
<strong>Avox</strong> Data on WSS Online?<br />
WSS Online<br />
_______________<br />
Data Item 1 Data Item 2<br />
Data Item 3 Data Item 4<br />
DB<strong>AG</strong> Price Data<br />
WM Reference Data<br />
Telekurs international<br />
Price Data<br />
Reuters international<br />
Price Data<br />
EDI Corporate Action<br />
Data on Equities<br />
Legal Entity Data<br />
from <strong>Avox</strong>?<br />
WSS Online is used by >4000 users in 340 financial institutions, working as core<br />
one-stop information system for Back Office personnel.<br />
Shall customer/counterparty data information be made available on WSS Online<br />
as well?
Content<br />
1<br />
2<br />
3<br />
4<br />
<strong>Avox</strong> - what it is<br />
Cooperation with SWIFT<br />
Corporate Hierarchies<br />
Close Link Detection
SWIFT uses <strong>Avox</strong> to clean up its<br />
BIC Database<br />
Media Release 19. July 2007:<br />
<strong>Avox</strong> chosen by SWIFT to maintain financial industry BIC database<br />
3-year agreement to benefit over 8,100 financial institutions<br />
<strong>Avox</strong>, the leading counterparty data verification network, announced today that it was chosen by SWIFT, the global financial cooperative, for the<br />
cleansing and maintenance of data records in its BIC (Bank Identification Code) database. Under the 3-year agreement, <strong>Avox</strong> will be instrumental in<br />
empowering SWIFT’s business entity reference data quality and universal identification for the benefit of the financial community.<br />
The BIC database contains the fundamental information required for unique business entity identification which consists of the company’s name and<br />
the registered address. The BIC data base enhancements will enable SWIFT’s over 8,100 customers to increase their reliance on the content and<br />
participate in the update notification process for improved data quality and timeliness. Ultimately, both SWIFT users and <strong>Avox</strong> customers will benefit<br />
from an increased amount of stress-tested data.<br />
"We chose <strong>Avox</strong> based on its collaborative business model and quality data standards which complement our co-operative nature,” said Chuck Wiley,<br />
senior product marketing manager, SWIFT. “The financial community will benefit from <strong>Avox</strong>’s commitment to excellence and outstanding track record.”<br />
“We are pleased to team up with SWIFT and to be able to further expand our data services. Working in partnership with SWIFT provides the foundation<br />
for a truly global and industry funded business entity identification hub”, said Ken Price, CEO of <strong>Avox</strong>.
Planned: Entity Identification of Institutional<br />
Funds via collaboration with the <strong>Avox</strong> User Community<br />
Citigroup<br />
Calyon<br />
UBS<br />
Source: SWIFT Presentation<br />
RBS<br />
1 3<br />
<strong>Avox</strong><br />
HSBC<br />
6<br />
2<br />
5<br />
4<br />
1<br />
2<br />
3<br />
4<br />
5<br />
6<br />
Process Flows<br />
<strong>Avox</strong> customers submit<br />
institutional funds lists to <strong>Avox</strong><br />
<strong>Avox</strong> consolidates and vets<br />
lists for accuracy &<br />
comprehensiveness of data<br />
elements<br />
<strong>Avox</strong> forwards cleansed,<br />
consolidated list of<br />
institutional funds to SWIFT for<br />
CIVIC allocation<br />
SWIFT allocates CIVIC to<br />
each fund & stores data in<br />
CIVIC Directory<br />
SWIFT returns consolidated<br />
list of funds to <strong>Avox</strong>, each ID’d<br />
with a CIVIC<br />
<strong>Avox</strong> disaggregates<br />
consolidated list & returns<br />
customer-specific list of funds<br />
(incl CIVICs/fund) to each of<br />
their participating clients
Content<br />
1<br />
2<br />
3<br />
4<br />
<strong>Avox</strong> - what it is<br />
Cooperation with SWIFT<br />
Corporate Hierarchies<br />
Close Link Detection
<strong>Avox</strong> generates Corporate Ownership<br />
Structures AND keeps them up-to-date<br />
ALLIANZ SE<br />
[ULTIMATE PARENT]<br />
1 Allianz Deutschland <strong>AG</strong> DEU 100,00%<br />
2 Jota-Vermšgensverwaltungsgesellschaft mbH DEU 100,00%<br />
2 Allianz Private Krankenversicherungs-Aktiengesellschaft DEU 100,00%<br />
3 GrundstŸcksgesellschaft der Vereinten Versicherungen mbH & Co. Besitz- und Betriebs KG DEU 98,80%<br />
2 Allianz Versicherungs-Aktiengesellschaft DEU 100,00%<br />
3 Vereinte Spezial Krankenversicherung <strong>AG</strong> DEU 100,00%<br />
3 Allianz Zentrum fŸr Technik GmbH DEU 100,00%<br />
3 esa Euroship Assekuradeurgesellschaft Mbh & Co. KG DEU 100,00%<br />
3 AZL-Alico Vermšgensverwaltungsgesellschaft mbH DEU 100,00%<br />
3 Gamma-Vermšgensverwaltungsgesellschaft mbH DEU 100,00%<br />
3 Vereinte Spezial Versicherung <strong>AG</strong> DEU 100,00%<br />
3 Allianz Handwerker Services GmbH DEU 95,00%<br />
3 All Net GmbH DEU 50,00%<br />
3 ADEUS Aktienregister-Service GmbH DEU 28,60%<br />
3 Allianz Capital Partners Verwaltungs GmbH DEU 20,00%<br />
3 Allianz Leben Private Equity Fonds Plus GmbH DEU 20,00%<br />
2 Allianz Lebensversicherungs-Aktiengesellschaft DEU 91,00%<br />
3 Objekt Burchardplatz GmbH & Co. KG DEU 100,00%<br />
3 Allianz Informatik Beteiligungsgesellschaft mbH DEU 100,00%<br />
4 Allianz Shared Infrastructure Services GmbH DEU 67,00%<br />
3 <strong>Deutsche</strong> Lebensversicherungs-Aktiengesellschaft DEU 100,00%<br />
3 Allianz Pensionsfonds Aktiengesellschaft DEU 100,00%<br />
3 AZ-SGD Private Equity Fonds GmbH DEU 100,00%<br />
3 Allianz Capital Partners Verwaltungs GmbH DEU 70,00%<br />
3 Allianz Leben Private Equity Fonds Plus GmbH DEU 70,00%<br />
3 Allianz Immobilienfonds 1 GmbH & Co. KG DEU 63,50%<br />
3 Allianz (UK) Limited GBR 33,33%<br />
3 Allianz Europe Ltd NLD 33,33%<br />
4 Allianz (UK) Limited GBR 66,70%<br />
5 Allianz Holdings PLC GBR 100%<br />
1 Allianz Autowelt GmbH DEU 100,00%<br />
1 Allianz Capital Partners GmbH DEU 100,00%<br />
2 MAN Roland Druckmaschinen <strong>AG</strong> DEU 100,00%<br />
3 grapho-metronic Me§- und Regeltechnik GmbH DEU 100,00%<br />
3 MAN Roland Vertrieb und Service GmbH DEU 100,00%<br />
3 MAN Roland Vertriebsgesellschaft Bayern mbH DEU 100,00%<br />
3 J. Metzler GmbH Graphische Maschinen DEU 100,00%<br />
3 MAN Roland Western Europe Group B.V. NLD 93,00%<br />
3 ppi Media GmbH DEU 75,00%<br />
4 MAN Roland Benelux N.V. NLD 100,00%<br />
4 MAN Roland Nederland B.V. NLD 100,00%<br />
4 Blikman & Sartorius, B.V. NLD 100,00%<br />
4 MAN Roland Belgium N.V. BEL 100,00%<br />
4 MAN Roland Great Britain Limited GBR 100,00%<br />
4 MAN Roland France SAS FRA 100,00%<br />
4 MAN Roland Swiss <strong>AG</strong> CHE 100,00%<br />
4 MAN Roland Italia SpA ITA 100,00%<br />
4 MAN Roland Sistemas, S.L. ESP 100,00%<br />
4 MAN Roland Portugal Lda. PRT 100,00%<br />
3 MAN Roland Sverige AB SWE 100,00%<br />
4 MAN Roland Norge AS NOR 100,00%<br />
3 MAN Roland Finland Oy FIN 100,00%<br />
3 MAN Roland Danmark A/S DNK 100,00%<br />
3 MAN Roland CEE <strong>AG</strong> AUT 100,00%<br />
4 MAN Roland Cesk‡ Republika spol. S.r.o. CZE 100,00%<br />
4 MAN Roland Polska Sp. z.o.o POL 100,00%<br />
4 MAN Roland Magyarorszag Kft. HUN 100,00%<br />
4 MAN Roland Bulgaria-eood BGR 100,00%<br />
4 MAN Roland Romania S.R.L. ROU 100,00%<br />
4 MAN Roland Hrvatska d.o.o. HRV 100,00%<br />
4 MAN Roland d.o.o. SVN 100,00%<br />
3 MAN Roland Inc. USA 100,00%<br />
4 MAN Roland Canada Inc. CAN 100,00%<br />
3 MAN Roland Asia Pacific Sdn.Bhd MYS 100,00%<br />
3 Votra S.A. CHE 100,00%<br />
4 MAN Roland China Group CHN 100,00%<br />
5 MAN Roland (China) Limited HKG 100,00%<br />
5 MAN Roland Printing Equipment (Shanghai) Co. Ltd. CHN 100,00%<br />
4 MAN Roland (Taiwan) Ltd. TWN 100,00%<br />
4 MAN Roland (Korea) Ltd. KOR 100,00%<br />
3 MAN Roland Heusenstamm GmbH DEU 100,00%<br />
3 Georg Spiess GmbH DEU 100,00%<br />
3 EUROGRAFICA Systemplanungs GmbH DEU 100,00%<br />
3 DIC¥MANROLAND Co. Ltd. JPN 80,00%<br />
3 Symbiotix Marketing Services GmbH DEU 50,00%<br />
2 Selecta Management <strong>AG</strong> CHE 100,00%<br />
2 BARTEC GmbH DEU 78,56%<br />
3 BARTEC AB SWE 100,00%<br />
3 BARTEC BENKE GmbH DEU 100,00%<br />
3 BARTEC Belgium NV BEL 100,00%<br />
3 BARTEC Consult GmbH DEU 100,00%<br />
3 BARTEC Elektrotechnik GmbH AUT 100,00%<br />
3 BARTEC Ltd. JPN 100,00%<br />
3 BARTEC Pte Ltd. SGP 100,00%<br />
3 BARTEC S.A. ESP 100,00%<br />
3 BARTEC s.a.r.l. FRA 100,00%<br />
3 BARTEC s.r.l. ITA 100,00%<br />
3 BARTEC Sicherheits-Schaltanlagen GmbH DEU 100,00%<br />
3 BARTEC US Corporation USA 100,00%<br />
3 BARTEC Varnost d.o.o. SVN 100,00%<br />
3 BARTEC, s.r.o. CZE 100,00%<br />
3 BARTEC (SA) Limited ZAF 100,00%<br />
3 BARTEC Nederland B.V. NLD 100,00%<br />
4 BARTEC Nederland Ultrakust Division B.V. NLD 100,00%<br />
3 Syscom Instruments S.A. CHE 100,00%<br />
3 BARTEC (UK) Ltd. GBR 100,00%<br />
3 BARTEC A.S. NOR 100,00%<br />
3 BARTEC BENKE GmbH DEU 100,00%<br />
3 Carbo Bartec Sp.zo.o. POL 50,00%<br />
3 EMS Elektromechanische Schaltsensoren GmbH DEU 50,00%<br />
2 AV Packaging GmbH DEU 51,00%<br />
2 SDU Holding B.V. NLD 50,00%<br />
3 SDU B.V. NLD 100,00%<br />
2 Scandlines <strong>AG</strong> DEU 40,00%<br />
2 United Broadcast Facilities B.V. NLD 38,80%<br />
1 Allianz Finanzbeteiligungs GmbH DEU 100,00%<br />
2 Dresdner Bank Aktiengesellschaft DEU 100,00%<br />
3 DDS Dresdner Direktservice GmbH DEU 100,00%<br />
3 BFC Berliner Film Companie CoPro GmbH DEU 100,00%<br />
3 Dresdner Kleinwort Capital Verwaltungs GmbH DEU 100,00%<br />
3 Dresdner Lateinamerika Aktiengesellschaft DEU 100,00%<br />
4 Peppermint Venture Capital GmbH & Co. KG DEU 40,00%<br />
3 EP Euro-Projektentwicklungs-Verwaltungs GmbH DEU 100,00%<br />
4 EP Euro-Projektentwicklungs GmbH & Co. Friedrichstadt-Passagen KG DEU 100,00%<br />
3 GENUJO Sechste Beteiligungs GmbH DEU 100,00%<br />
3 GENUJO Vierte Beteiligungs GmbH DEU 100,00%<br />
4 <strong>Deutsche</strong> Schiffsbank <strong>AG</strong> DEU 40,00%<br />
3 GVP Grundwert Verwaltungs- und Projektentwicklungs GmbH DEU 100,00%<br />
3 Dresdner Mezzanine GmbH & Co. KG DEU 100,00%<br />
3 Sechste FraMŸ Beteiligungs GmbH DEU 100,00%<br />
3 Zenon Beteiligungs-GmbH DEU 100,00%<br />
4 Dresdner Investments (UK) Ltd GBR 100,00%<br />
5 Dresdner Kleinwort Group Ltd. GBR 100,00%<br />
6 VELO Limited GBR 78,00%<br />
6 Dresdner Kleinwort Securities Limited GBR 100,00%<br />
6 Dresdner Kleinwort Securities Nominees Limited GBR 100,00%<br />
6 Dresdner Kleinwort Derivative Investments Limited GBR 100,00%<br />
6 Dresdner Kleinwort Securities LLC USA 100,00%<br />
6 Dresdner Kleinwort Capital Inc USA 100,00%<br />
6 Dresdner Kleinwort Japan Limited JPN 100,00%<br />
6 Dresdner Kleinwort Deutschland GmbH DEU 100,00%<br />
6 Dresdner Kleinwort Espana S.A. ESP 100,00%<br />
6 Dresdner Kleinwort Limited CHN 100,00%<br />
6 Dresdner Kleinwort Securities (Asia) Ltd. HKG 100,00%<br />
6 Dresdner Kleinwort Wasserstein (South East Asia) Limited SGP 100,00%<br />
6 Dresdner Kleinwort France SAS FRA 100,00%<br />
6 Dresdner Kleinwort Securities France SA FRA 100,00%<br />
6 Dresdner Kleinwort Leasing December (10) Limited GBR 100,00%<br />
6 Dresdner Kleinwort Leasing December (12) Limited GBR 100,00%<br />
6 Dresdner Kleinwort Leasing December (15) GBR 100,00%<br />
6 Dresdner Kleinwort Leasing December (7) Limited GBR 100,00%<br />
6 Dresdner Kleinwort Leasing December (8) Limited GBR 100,00%<br />
6 Dresdner Kleinwort Leasing December (9) Limited GBR 100,00%<br />
6 Dresdner Kleinwort Holdings I, Inc USA 98,20%<br />
3 Dresdner Bank Gestions France SAS FRA 100,00%<br />
3 Dresdner RCM Global Investors (Jersey) Ltd JEY 100,00%<br />
3 Dresdner Bank Monaco MCO 100,00%<br />
3 Dresdner Bank Polska S.A. POL 100,00%<br />
3 Dresdner Bank (Hungaria) Rt HUN 100,00%<br />
3 Dresdner Bank Brasil SA Banco Mœltiplo BRA 100,00%<br />
3 Dresdner Bank AS TUR 100,00%<br />
4 BNP-AK Dresdner Bank Finansal Kiralama AS DEU 30,00%<br />
3 Dresdner Bank Luxembourg, S. A. LUX 100,00%<br />
4 Veer Palthe Vo te NV NLD 100,00%<br />
4 LUFRA Beteiligungsholding <strong>AG</strong> CHE 100,00%<br />
3 Dresdner Bank Mexico S.A. MEX 100,00%<br />
3 Dreesdner Bank (Schweiz) <strong>AG</strong> CHE 100,00%<br />
3 Dresdner Finanziaria SpA ITA 100,00%<br />
3 Dresdner Bank (Switzerland) <strong>AG</strong> CHE 100,00%<br />
3 Dresdner Bank ZAO RUS 100,00%<br />
3 Herradura Ltd GBR 100,00%<br />
3 Kleinwort Benson (Channel Islands) Ltd. GBR 100,00%<br />
3 Kleinwort Benson Channel Islands Holdings Ltd. DEU 100,00%<br />
3 Kleinwort Benson Private Bank Ltd. GBR 100,00%<br />
3 SCI AVIP SCPI Selection FRA 100,00%<br />
3 OLB-Beteiligungsgesellschaft mbH DEU 98,60%<br />
4 Oldenburgische Landesbank <strong>AG</strong> DEU 25,30%<br />
3 Reuschel & Co. KG DEU 97,50%<br />
4 RVB Verwaltungs- und Beteiligungs- GmbH DEU 100,00%<br />
4 Reuschel & Co.Beteiligungs- und Verwaltungs GmbH DEU 100,00%<br />
4 Reuschel & Co. Finanz-Service GmbH DEU 100,00%<br />
4 Reuschel & Co. Verwaltungs GmbH DEU 100,00%<br />
4 UnterstŸtzungseinrichtung des Bankhauses Reuschel & Co. GmbH DEU 100,00%<br />
3 D E G I <strong>Deutsche</strong> Gesellschaft fŸr Immobilienfonds m.b.H DEU 94,00%<br />
4 DresdnerGrund-Fonds DEU 100,00%<br />
4 Space Park Erste Verwaltungs GmbH DEU 100,00%<br />
4 Space Park GmbH & Co KG DEU 100,00%<br />
3 Allianz Dresdner Bauspar <strong>AG</strong> DEU 80,00%<br />
4 Dresdner Finanzberatungsgesellschaft mbH DEU 100,00%<br />
3 Privatinvest Bank <strong>AG</strong> AUT 74,00%<br />
3 Oldenburgische Landesbank <strong>AG</strong> DEU 64,10%<br />
3 ADEUS Aktienregister-Service GmbH DEU 51,00%<br />
3 Dresdner-Cetelem Kreditbank GmbH DEU 49,90%<br />
3 KG Allgemeine Leasing GmbH & Co DEU 45,00%<br />
3 Allgemeine Leasing GmbH DEU 45,00%<br />
3 Rendite Partner Gesellschaft fŸr Vermšgensverwaltung mbH DEU 33,30%<br />
3 Allianz Shared Infrastructure Services GmbH DEU 33,00%<br />
1 Allianz of America Inc. USA 100,00%<br />
2 Allianz Life Insurance Company of North America USA 100,00%<br />
3 Allianz Individual Insurance Group LLC USA 100,00%<br />
3 Tax Planning Seminars Inc. USA 100,00%<br />
3 Questar Capital Corporation USA 100,00%<br />
3 Signature Financial Services, LLC USA 100,00%<br />
3 GamePlan Financial Marketing, LLC USA 100,00%<br />
2 Personalized Brokerage Service LLC USA 100,00%<br />
2 American Financial Marketing, Inc. USA 90,00%<br />
Example<br />
Excerpt Dresdner Bank
Accurate and up-to-date hierarchies<br />
are rarely available in the market<br />
Most hierarchy data that is available from data vendors is not up-to-date<br />
But this data is used by many departments within a bank<br />
Customer Relationship Management (efficient client handling)<br />
Billing (fee schedules, rebates)<br />
Credit Departments (credit lines)<br />
Risk Management (identify risk cumulations)<br />
Trading (netting to extend trading limits)<br />
Compliance (anti money laundering)<br />
Changes within the companies hierarchies of trading counterparties or clients<br />
can highly affect risks management, business lines and compliance
Most Credit Risk Challenges seen in<br />
the area of accurate client data<br />
Large<br />
Corporates<br />
Middle<br />
Market<br />
Trading Cparties<br />
# ‘Group’<br />
Entities<br />
G9: 1,000<br />
Reg: 800<br />
G9: 14,000<br />
Reg: 25,000<br />
G9: 2,000<br />
Reg: 1,000<br />
Total G9: 17,000<br />
Reg: 27,000<br />
Source: Mercer Oliver Wyman analysis<br />
Avg<br />
Exposure<br />
$75-100MM<br />
Content<br />
1<br />
2<br />
3<br />
4<br />
<strong>Avox</strong> - what it is<br />
Cooperation with SWIFT<br />
Corporate Hierarchies<br />
Close Link Detection
Close links avoidance<br />
in the open market operations<br />
of the Eurosystem<br />
§ Financial institutions participating in open market operations need to ensure<br />
compliance with ECB regulation<br />
§ European Central Bank applies certain rules to protect the Eurosystem from<br />
incurring losses in its monetary policy operations<br />
§ Any open market operations with the ECB need to be covered by security<br />
collateral<br />
§ Securities can only be used as collateral if they are ECB eligible and not issued<br />
by the institution itself or by any other entity with which it has close links<br />
§ Close links means that the financial institution owns 20% or more of the capital of<br />
the issuer/debtor/guarantor of the security used as collateral<br />
§ In case of close links the Eurosystem applies financial penalties and/or suspends<br />
the institution from the subsequent open market operation
Current Situation<br />
conservative collateral management<br />
§ As open market operations are important for most Banks’ liquidity management<br />
they are not willing to take the risk of being suspended. Therefore they accept to<br />
use only part of their potential collateral today<br />
§ Banks carefully select collateral to submit to the ECB, often excluding all<br />
uncovered corporate bonds<br />
§ The bigger the client’s company group is, the more difficult it is to monitor its own<br />
hierarchy to be able to manage collateral efficiently
<strong>Avox</strong> Collateral Monitoring Service<br />
Avoid close links AND improve liquidity<br />
Service<br />
§ <strong>Avox</strong> creates and weekly monitors<br />
the financial institutions’ hierarchy<br />
§ Client’s eligible assets are mapped<br />
against its hierarchy to prevent own<br />
issues or assets issued by a related<br />
party to be submitted as collateral<br />
§ As a result <strong>Avox</strong> provides a list of<br />
collateral without close links to be<br />
used for open market operations<br />
Benefits<br />
§ The amount of collateral available for<br />
open market operations can be<br />
increased<br />
§ With the enlarged amount of eligible<br />
assets banks can improve their<br />
liquidity<br />
§ The risk of close links is limited and<br />
prevents the client from being<br />
accused of negligence
<strong>Avox</strong> Collateral Monitoring Service
Minimization of Collateral Risk<br />
addressed with four different services<br />
Service Offering<br />
Target<br />
Clients<br />
Step 1<br />
Avoid close links in open market operations<br />
§ Monitors customers’ hierarchy and<br />
maps it against ECB eligible<br />
securities to prevent that own<br />
issues (or those of entities<br />
belonging to the same group) are<br />
provided as collateral (close links)<br />
All banks engaged in open<br />
market operations (Treasury)<br />
*Step 2 and 3 to be launched within the next 12 month<br />
Step 2 *<br />
Collateral check for bilateral business<br />
§ Provide a close links<br />
check and rating<br />
information (optional) for a<br />
specific collateral basket a<br />
counterparty offered to our<br />
customer<br />
§ Provide list of banks<br />
(potentially customers’<br />
counterparties) using the<br />
<strong>Avox</strong> Collateral Service<br />
(Step 1 service)<br />
All banks with bilateral<br />
business (Treasury)<br />
Step 3 *<br />
Global risk exposure check<br />
§ Provide issuer and ultimate<br />
parent information for the<br />
complete collateral basket<br />
the customer received from<br />
diverse counterparties to<br />
identify cumulating risk<br />
All banks (Risk managers)
Contact<br />
n Markus Heer<br />
n Head of Section<br />
n Back Office Data & Analytics<br />
n Phone +49 (0)69-211-12580<br />
n Email markus.heer@deutsche-boerse.com<br />
n Wiebke Hedlefs<br />
n Phone +49 (0)69-211-13116<br />
n Email wiebke.hedlefs@deutsche-boerse.com
Thank You for your attention!
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