Sapient cashes in on ECB requirements

Wed Sep 5, 2012 9:43am EDT

LONDON, Sept 5 (IFR) - Sapient Global Markets has launched a suite of tools, hoping to cash in on its role as constructor of the European DataWarehouse (ED) by selling software to help issuers meet ECB loan-level data requirements. If issuers do not submit their data to the European DataWarehouse, their bonds will become invalid as repo collateral at the ECB - it will be the ECB-endorsed repository of data for eligible ABS bonds (the ECB having conspicuously failed to endorse other data providers working in the market). Sapient is hoping to sell its package as a complete solution to standardise, validate and submit data to the ED, and its offering has the advantages of tight integration with the ED, full knowledge of how it will work when it is complete and the ability to test on prototypes - features not available to its competitors, since they do not have the construction contract. "An initiative intended to benefit investors has been hijacked by captive interest," said a securitisation funding official. "It's a new European tax on asset-backed real-economy lending - what else is an ECB-sponsored levy for something most investors are not looking for?" The ED has already made a scheme available for submitting RMBS data, but has not yet released a full technical interface document which would allow others to develop a similar product suite. Most of the large structured finance issuers already have their own loan-level information software (the Bank of England introduced loan-level data requirements for RMBS in December 2011, meaning all the UK issuers have systems in place) but with 1185 eligible ABS bonds for the ECB, plenty of smaller institutions will also have to adapt. Meanwhile, Sapient's release highlighted the short timeframe for the new requirements - end of 2012 was the original target for RMBS loan-level data, though this was pushed back in June. Sapient's ED contract was awarded by eight banks and Link Financial, a group which collectively calls itself the Market Group. It is not clear how this group was chosen. Holland Financial Centre, a lobbying group representing Dutch banks, threatened to boycott the ED initiative, providing loan-level data through its own system.