Bloomberg Regulatory & Accounting Products enable banks, asset managers, insurers and other financial organizations to navigate the increasingly complex liquidity, regulatory and accounting disclosure environment. Our products are developed by industry experts in liquidity and risk management, accounting and regulatory compliance who understand the challenges faced by sell-side and the buy-side firms today.
Bloomberg solutions help firms leverage their data capital to ease the burden of regulatory compliance. By feeding high-quality data to multiple enterprise systems, risk departments can ensure proper risk management at the firm- and portfolio-level. At the same time, compliance departments can be confident the data they use is regulation-ready. And because all Bloomberg Regulatory & Accounting Products leverage the same data integrated into the Bloomberg Professional service, risk and compliance operations can expect data consistency.
Combining high-quality data, sophisticated analytics and best-in-class service, Bloomberg products deliver solutions in four key areas: trading; risk and capital management; regulatory and accounting reporting; and compliance.
In the fallout from the financial crisis, global regulations emphasized the need for trade compliance throughout the trade lifecycle. Regulators are asking firms to perform pre-trade analysis, execute trades in a transparent manner, and perform post-trade checks.
Central Bank Eligibility (CBE)
With CBE data, firms can be confident they are using the most current eligibility information. It is presented consistently in an easy-to-integrate format. This data enables firms to identify and act on important changes in eligibility very quickly. Firms also can use Bloomberg data to validate internal analysis of ambiguous central bank guidelines, which saves time and improves communication between the front office and operations on matters of eligibility.
Covered Funds Identification
Bloomberg’s Covered Funds Identification solution quickly and efficiently identifies covered funds affected by the Volcker Rule with minimal manual effort. This solution was built with input from industry stakeholders and uses nearly 30 data fields to automatically extract pertinent details from Securitization, CLO, CDO, Covered Bond and Exchange Traded Product deal documents in order to classify securities against the requirements of Volcker Rule Covered Funds regulations.
Risk and Capital Management
In an effort to ensure that firms reduce systemic risk, regulators have imposed stricter risk management and capital adequacy measures. Toward that end, regulators want firms to calculate and manage capital ratios; perform risk calculation and reporting; perform stress testing based on the scenarios prescribed by CCAR, FINRA and ECB / EBA guidelines; classify eligible liquid assets and quantify liquidity risk to support liquidity ratio calculations (e.g. LCR and NSFR).
Bloomberg provides several solutions to help firms manage risk and ensure capital adequacy, including:
Liquidity Assessment (LQA)
This solution helps to assess an instrument’s liquidity trade cost and liquidation horizon for regulatory reporting, risk management and pre/post trade analysis. LQA’s methodology combines traditional market impact models with an innovative machine learning approach to account for a multitude of relevant factors influencing liquidity.
High-Quality Liquid Assets (HQLA)
This solution leverages Bloomberg’s unrivaled reference data and incorporates a set of HQLA-specific fields to help clients with liquidity coverage ratio calculations, central bank eligibility, and regulatory reporting under Basel III and country jurisdictions.
Simplified Supervisory Formula Approach (SSFA)
This solution assists banks with calculating risk-weights and capital adequacy requirements in accordance with U.S. Basel III. It features eleven fields that can be used to fulfill SSFA requirements, including the five input data requirements for the formula, five interim-step calculations and the final securitization risk weight factor (SRWF) for each securitized product.
Legal Entity Data
Bloomberg’s Legal Entity Data solution includes an extensive corporate structure file that includes granular entity data for more than three million public and private companies, sovereign governments, funds, government agencies and municipalities. This data seamlessly connects to the legal entity identifier (LEI), enabling risk managers to assess counterparty and concentration risk by connecting securities to issuers. This allows easy identification of the ultimate parent and gauges total exposure to specific entities, industries and markets.
Regulatory and Accounting Reporting
To maintain transparency in capital markets, regulators require firms to provide detailed information on their trading systems; trade and valuation reporting; capital plan; and accounting approaches. This is mandated globally, from SEC and FINRA in the U. S. to EBA and ESMA in Europe, with regulations including EMIR, MiFID II, AIFMD, Form PF, EBA Prudent Valuation, etc.
Bloomberg for Enterprise provides several solutions to help firms meet regulatory and accounting reporting requirements, including:
Evaluated Pricing (BVAL)
Bloomberg’s independent, transparent and defensible evaluated pricing service for fixed income and derivatives instruments provides firms with the critical transparency needed to assess and report their liquidity position under regulations such as Form PF, AIFMD, Solvency II, EMIR and others.
Fair Value Hierarchy Leveling (FVHL)
Leveraging regulatory transparency fields, firms can use this tool to customize and store their own rules for determining fair value leveling results (1, 2 or 3) at a given point in time. While aligning with high-quality, independent prices from BVAL, firms are also able to address ASC 820 and IFRS 13 requirements.
Prudent Valuation (Pruval)
Leveraging our LQA model and related trade data, this offering provides the market uncertainty, close-out costs and concentrated position AVAs for client holdings.
Regulatory Transparency Fields
These fields deliver an objective, consistent and defensible solution for many regulatory and accounting issues by exposing the underlying market data used in pricing models for the Bloomberg Valuation Service (BVAL). These fields focus on quantitative market drivers to help clients determine Fair Value Leveling classifications (1, 2 or 3) required by ASC 820 and IFRS 13 as well as valuation control.
Pre- & Post-Trade Transparency:
Systematic Internalisers (SI) will need to publically report Actionable Indications of Interest (AIOI) and trades via Approved Publication Arrangements (APA). Bloomberg plans to launch an APA which will meet MiFID II requirements. Bloomberg will also provide reference data to help with determinations required on SI and waiver criteria and has created the Financial Instrument Global Identifier (FIGI) symbology to uniquely identify over 250 million instruments.
Trades on all financial instruments will need to be reported to the National Competent Authority (NCA) to their market abuse and surveillance functions. Reports require many fields of static data along with economic terms. Bloomberg currently has an Approved Reporting Mechanism (ARM) which will be extended to meet MiFID II requirements.
Form PF Solution
Bloomberg’s Form PF Solution streamlines the regulatory filing process enabling firms to meet deadlines in a cost-effective manner. Our data-centric approach makes it easier for firms to aggregate the specific information required by Form PF.
Affiliated Transactions Identification Solution
Bloomberg’s Affiliated Transactions Identification solution helps banks identify all its affiliate transactions by delivering data containing a unique list of securities, specific to a client’s corporate structure.
Bloomberg’s Collateral Tagging solution will provide customers with an efficient mechanism to determine and classify eligible collateral for margining of noncentrally cleared OTC derivatives across various global regimes. The solution will be based on regulatory requirements, regulatory expertise and industry feedback, thus providing a standardized, accurate and consistent classifications and haircuts for eligible collateral across the industry, eliminating the guesswork for the firms’ capital and collateral managers.
Compliance is at the forefront of most financial firm operations, establishing controls within a firm while maintaining an audit trail of the firm’s customers and trade lifecycle. Bloomberg for Enterprise provides a range of compliance solutions that enable firms to:
Capture documents and communications for regulatory compliance and trade reconstruction
Provide sanction- and regulatory-specific data on legal entities
Provide identification and classification of instrument-per-individual taxation regime
Integrate, improve and streamline legacy approaches to risk data management and reporting
Bloomberg compliance solutions include:
Evaluated Pricing (BVAL)
Bloomberg’s independent, transparent and defensible evaluated pricing service for fixed income and derivatives instruments provides firms with the critical transparency needed to comply with regulations and fulfill their requirement for an independent third-party provider.
IRS Compliance – The 871(m) Solution
Drawing on our unparalleled data resources, Bloomberg’s 871(m) Solution offers a data solution that facilitates identification of in scope instruments, provides high quality delta calculations and tests indices for qualification.
Uses entity classification to determine sourcing of U.S. income for underlying instruments
Coverage includes derivatives, ETFs, equity indices and structured products
Provides qualified and non-qualified index indicator
Offers transparency, explaining why an index is non-qualified
Leverages advanced, trading-quality delta as the end-of-day delta for tax withholding
Bloomberg acts as a central repository for 871(m) specific data contributed for structured products and convertibles. To reduce the operational burden for participating firms, the solution leverages Bloomberg’s existing Structured Product Feed (SPF). Through this feed, Bloomberg receives approximately 10,000 structured products per day from more than 100 different issuers.
FATCA Withholding Solution
Drawing on our unparalleled data resources—including industry-standard terms and conditions, corporate actions and entity data— this solution offers a streamlined approach to FFIs, providing FATCA-specific, security-level details to help FFIs identify U.S. sourced FDAP income, grandfathered obligations, and material modifications. It also provide asset-level withholding eligibility status and an entity level participant identification (GIIN). By consolidating this data into a single solution, firms are able to identify affected instruments quickly and accurately.
Financial Transaction Tax Solution (FTT)
Drawing on Bloomberg’s vast data resources, this solution enables firms to comply with European regulations by bringing clarity to the act of identifying eligible instruments. The FTT solution delivers daily updates to simplify the process of complying with country-specific FTT rules while Bloomberg data maps eligibility data for equities, derivatives and the instruments underlying derivatives to ensure optimal coverage.
Legal Entity Data
Bloomberg’s Legal Entity Data solution gives firms a head start on customer due diligence, regulatory reporting, and pre-trade compliance. This data seamlessly connects to industry and regulatory classifications, such as NACE, NAICS, UK SIC and EMIR, and identifiers such as the LEI, registry IDs and the GIIN, ensuring compliance officers have the data they need.
Ontology and Provenance
This large, financial services data model uses complete, automatable metadata to provide detailed data lineage to Bloomberg Reference Data subscribers. This includes formal naming and definition of types, properties and interrelationships as well as Information about entities, activities, and people involved in producing a piece of data. Bloomberg Ontology and Provenance fulfills BCBS-239 regulatory requirements.
Solvency II Solution
Firms can meet Pillar I and Pillar III requirements with the high-quality reference and pricing data provided by this Bloomberg solution. The Solvency II data package provides the mandatory CIC and NACE codes required in Solvency II’s Quantitative Reporting Templates (QRT) and also includes LEI, ultimate parent, security IDs, duration, ratings and security types. To address Pillar I requirements, our BVAL solution delivers transparent, defensible prices for fixed income and derivative securities.
Stamp Tax Solution
Drawing on Bloomberg’s vast data resources, this solution helps financial firms identify eligible instruments quickly, accurately and dynamically by providing updated eligibility data at the security level. In addition, the Stamp Tax Solution offers complete mapping between the relevant tax datasets and Bloomberg’s comprehensive reference database, which helps ensure extensive coverage of eligible securities. Using this daily file, firms can gain access to the data needed to calculate payments properly, comply with tax requirements and avoid unexpected liability.