Minutes

Towards a Sustainable, Data Standards Driven Approach to Financial Reform OMG Finance Domain Task Force (FDTF) - Enterprise Data Management Council (EDMC) Meeting

March 22nd - 23rd 2011, Washington D.C.

In response to the 2007-09 financial crisis, the U.S. congress passed the Dodd Frank Act with global implications. Financial institutions across the globe will need to implement data standards such as financial instrument and business entity identifiers, associated reference data and hierarchies to support the reporting requirements in a manner that facilitates analytics and supports systemic oversight.

The purpose of the joint OMG/EDMC meeting was to accelerate the development of a “sustainable, data standards and model driven” approach to Dodd-Frank Act response. This joint meeting was lead by Eric Chacon and Dr. Harsh W. Sharma from the Chief Data Office of Citigroup, and Michael Atkin, Managing Director, EDMC. This event brought together 71 attendees including business and IT executives from financial services, standards organizations, software vendors, reference data providers, architects and modeling community. Senior leaders from US government represented the Office of Financial Research (OFR), US Treasury, US Commodity Futures Trading Commission (CFTC) and Federal Reserve.

Tuesday, March 22, 2011

Following is a summary of sessions on March 22nd 2011

• Understand what type of systemic risk analytics the regulators want to perform and how the required data standards and associated reference data will support these analytics
• Emerging business, operational and IT challenges from Dodd-Frank Act response; required data standards and strategies
• How financial services organizations are preparing to address the business, operational, and IT challenges
• EDM Council's semantics repository work and underlying OMG modeling standards for end-to-end management of regulatory response

The conference started with a round table session lead by John Bottega, Federal Reserve, Adam Lavier, OFR, John Mulholland, Fannie Mae, Andrei Kirilenko, CFTC and Thomas Castriota, Capco. This interactive session included discussion on the relationship between data standards (i.e. identifiers, hierarchies and semantics) and systemic risk oversight mandated by the Dodd-Frank Act. OFR’s Legal Entity Identifier (LEI) requirements and implementation issues were discussed. Challenges emerging from regulatory agencies’ rulings and resulting timeline disconnect, governance models for proposed standards, global applicability and scope issues were brought to regulators’ attention. The importance of an ongoing public-private sector partnership with standards organizations to develop technology neutral standards was considered to be a critical success factor.

Charles R. Taylor, Director, Financial Reform Project, PEW Charitable Trusts presented his thoughts on a sustainable strategy coupled with data standards to future-proof the financial reform. Members of OMG FDTF, EDMC and PEW Trusts will work on developing a white paper outlining key ingredients of the strategy including data requirements and applicable standards being jointly developed by OMG and EDMC.

PJ Di Giammarino, CEO, JWG, A London-based think-tank for regulatory reform, and Meredith Gibson Director & Counsel, Citigroup, summarized the operational impact of the first half of the 250,000 pages of regulatory reform that are expected from international, regional and local regulators by the end of 2012. Key challenges for G20 policy makers, firms’ data managers, academia, standards bodies and the industry’s supply chain were identified.

Kay H. Vicino, SVP, Operations & Technology, Northern Trust, discussed business, operational and technical challenges associated with meeting regulatory reporting requirements. This session provided a realistic view of what global financial institutions need to address in order to meet these emerging mandates.

Michael Bennett, EDMC, Dr. Said Tabet, OMG Regulatory Compliance Task force and Dr. Harsh W. Sharma (FDTF Co-Chair) presented the work streams focused on developing a common language and symbology for financial reform. Need for a modeling approach to develop the common language and symbology was deemed to be a must-have capability. OMG’s standards for management of regulatory compliance, business vocabulary and rules and information modeling were presented as key enablers of the common language and symbology.

Eric E. Cohen, XBRL Global Technical Leader, PwC, presented relevance of Extensible Business Reporting Language (XBRL) as a vital tool for more transparent and reusable business reporting including some of the mandatory reporting from CFTC and Dodd-Frank Act.
Michael Atkin and Michael Bennett from EDMC provided an overview of their semantic repository and roadmap to further develop their financial services models as OMG standard under OMG’s governance process. This extended session covered:

• Vocabulary and model for: Legal Entity Identifier and Hierarchy, Product Identifier Hierarchy and supporting reference data
• Enhancements required to OMG modeling standards used in the development of Semantics Repository content
• Use of OMG’s Request For Comments (RFC) Process for development of the joint standard

Richard Wayne, SVP, Risk Architecture, Citigroup, and James Odell, OMG Analysis and Design Task Force Chair, presented the business case for developing a Trade Transaction Traceability Map standard leveraging OMG’s event and software agent modeling standards. A draft RFP will be presented at the Salt Lake City meeting in June 2011.

William H. Henley, Senior Vice President, Regulation, BITS, a division of The Financial Services Roundtable, presented the importance of data quality in response to regulations such as Dodd-Frank Act. Relevance of OMG’s records management standards and enhancement of information modeling standard with data quality metrics was discussed.

Wednesday, March 23, 2011

Day 2 of the meeting included extended working sessions summarized below.

OMG Property and Casualty (P&C) Insurance group presented their status on P&C Information Model work requesting a final submission in June 2011. Donald Chapin, OMG Business Modeling and Integration Task Force Co-Chair presented his business vocabulary work for P&C and Dodd-Frank Act rules based on OMG’s SBVR standard.

Mike Bennett, EDMC conducted a deep dive into the semantic models for Legal Entity and Financial Instruments and identified follow-up work streams including enhancements required to OMG’s ontology modeling standard. Re-use of OMG’s Time and Date ontology work was discussed. OMG and EDMC members will present the roadmap, work streams, deliverables and time lines at the June 2011 OMG meeting in Salt Lake City.

Mark Eisner, CTO and Ken Lord, CEO, Firestar Software, presented a summary of OMG’s Model Driven Messaging Interoperability standard and the status of proof of concept in Insurance and healthcare industry.

Eric Cohen, PwC, and David Frankel, SAP, presented their liaison reports on collaborative work on XBRL GL (UML Profile), ISO20022 and Banking Industry Architecture Network respectively.

The conference concluded with the following next steps/focus areas:

1. Development of a white paper on sustainable data strategy for financial reform
2. OMG-EDMC members to start developing the standards for financial reform including Trade Transaction Traceability Map for systemic risk assessment and reporting
3. Follow-up 1 day session for the financial services business, regulatory, legal and IT executives in NYC (planned for Sept. 2011
4. Engagement with the regulatory agencies’ leadership on an ongoing basis for development of the financial reform standards

Attendees