Reference Data

Reference Data

Core Concepts

1. Security Master

The security master is the authoritative repository of instrument-level reference data, serving as the foundation for portfolio management, trading, performance, reporting, and compliance systems.

Core fields: Identifiers (CUSIP, ISIN, SEDOL, FIGI, ticker, internal ID), classification (asset class, sub-class, GICS sector, country, currency), issuer information (name, LEI, ratings), terms and conditions (asset-class-specific contractual attributes), and pricing factors (multiplier, day count, settlement convention).

Asset-class-specific attributes: Equity (shares outstanding, market cap, sector, exchange, dividend frequency). Fixed income (coupon, maturity, call schedule, credit rating, seniority, day count). Funds (NAV, expense ratio, share class, distribution frequency, load structure). ETFs (NAV, indicative value, expense ratio, underlying index). Options (underlying, strike, expiration, type, multiplier, exercise style). Alternatives (strategy type, vintage year, commitment, capital call schedule, valuation frequency).

Security lifecycle events: IPO/listing (new record creation with all required fields), corporate actions (splits, mergers, spin-offs, name/ticker/exchange changes — the single largest source of security master data quality issues), and delisting/maturity (flag as inactive, retain historical record for performance and audit).

Golden source designation: The security master should be the firm's golden source for instrument reference data. All downstream systems retrieve security attributes from it rather than maintaining independent copies.

2. Identifier Systems

Financial instruments carry multiple overlapping identifiers. No single scheme is universally sufficient.

• CUSIP — 9-character (6 issuer + 2 issue + 1 check digit), US/Canada securities, administered by CUSIP Global Services (FactSet). Changes on fundamental term changes (mergers, reorganizations).
• ISIN — 12-character (2 country + 9 national ID + 1 check digit), ISO 6166, globally unique. Required for MiFID II, EMIR reporting. Wraps the national identifier (CUSIP in US, SEDOL in UK).
• SEDOL — 7-character, assigned by the London Stock Exchange for LSE and UK/Irish listings. A single security may have different SEDOLs per listing exchange.
• FIGI — 12-character, developed by Bloomberg under OMG standard. Open-source and freely available (unlike CUSIP/SEDOL). Distinguishes instrument-level, composite, and exchange-level identifiers.
• Ticker symbols — Exchange-assigned, not globally unique, change frequently. Never use as a primary identifier; use only for display or trading convenience.
• Internal identifiers — Firm-generated (UUID or sequential integer), immutable across the security's life. Serves as the stable key linking all external identifiers.

Identifier mapping: The security master must maintain a cross-reference table linking all identifiers per security. Challenges include one-to-many relationships (one ISIN to multiple SEDOLs), temporal changes from corporate actions (versioned mappings for point-in-time lookups), and vendor discrepancies requiring conflict resolution.

3. Client Master

The client master is the authoritative repository of client-level reference data supporting onboarding, account management, KYC/AML compliance, reporting, and relationship management.

Data model: Individuals (legal name, DOB, SSN/TIN, address, phone, email, citizenship, employment). Entities (legal name, EIN, formation state/country, entity type, formation date). Trusts (trust name, type, grantor, trustee, beneficiaries, governing law).

Identity management: Each client must have a single unique identifier regardless of how many accounts or roles they hold. Deduplication is critical for regulatory reporting, household billing, cross-account compliance (wash sales), and unified servicing.

Household and relationships: Household grouping links related clients for billing, reporting, and planning. Relationship types include spouse, parent/child, trustee/beneficiary, authorized signer, trusted contact. Advisor assignment (primary, secondary, service team) is tracked here.

KYC/AML data: Verification status, method, risk rating, PEP status, OFAC screening results, beneficial ownership (entities), source of funds/wealth, EDD flags.

Client preferences: Communication channel, statement delivery, language, investment preferences (ESG exclusions, sector restrictions), tax lot method preference.

Golden source: CRM is typically the golden source for relationship and advisory data; custodian is the golden source for regulatory identity data (legal name, SSN, address of record). The client master integrates both and enforces synchronization.

4. Account Master

The account master stores attributes and configuration of every client account, linking accounts to clients and driving trading, billing, reporting, and compliance.

Attributes: Registration (individual, joint, trust, IRA, Roth, SEP, 401(k), corporate, estate, UGMA/UTMA), account type (advisory, brokerage, wrap, retirement, education, charitable), tax status (taxable, tax-deferred, tax-exempt), custodian, advisor, model assignment, features (margin, options level, DRIP, cost basis method).

Account-to-client relationships: Owner, authorized party (POA, trading authorization), beneficiary, trustee, custodian (for UGMA/UTMA).

Status management: Active, restricted (regulatory hold, death notification, legal dispute), closed (retain historical data per books-and-records requirements), dormant (escheatment/unclaimed property exposure).

Cross-system identification: Custodian account number, PMS account ID, CRM account ID, and billing account ID may all differ. The account master maintains mappings and provides a canonical internal ID as the cross-system key.

5. Pricing Data

Pricing is the most time-sensitive reference data category. Incorrect prices propagate immediately into valuations, performance, billing, and compliance.

End-of-day pricing: Official exchange close (4:00 PM ET for US equities), mutual fund NAV (available 6:00-7:00 PM ET), evaluated pricing for infrequently traded fixed income (Bloomberg, ICE, Refinitiv models).

Pricing hierarchy: Define a preferred source per security type with automatic fallback. Example: US equities — exchange close, then Bloomberg, then Refinitiv. Corporate bonds — ICE evaluated, then Bloomberg BVAL, then Refinitiv. Alternatives — manager/GP valuation, then third-party appraisal, then internal model.

Fair value pricing: Adjust international securities' closing prices for subsequent market, currency, and news developments when foreign exchanges close hours before the US close. Prevents stale-price arbitrage in mutual funds.

Pricing validation and stale-price detection: Validation-rule design and execution (variance checks, zero/negative-price detection, stale-price windows, cross-source comparison, threshold calibration) are owned by the data-quality skill (data-integration plugin); reference-data owns the source hierarchy those rules validate against.

Manual overrides: Restricted to authorized users, documented with reason and source, logged in an audit trail, time-limited pending vendor correction.

6. Reference Data Governance

Governance establishes the structures, policies, and processes ensuring reference data is accurate, complete, timely, and consistent.

Data ownership: Each domain has a designated owner — security master (investment operations), client master (co-owned by compliance and advisory practice), account master (operations/client services), pricing (portfolio accounting/valuation). Owners are accountable for quality and authorize changes to definitions and sources.