Individual Records are supposed be updated yearly, but more than 25% of records have lapsed LEI records must be updated sooner in response to corporate actions if the GLEIS is to be useful as golden copy reference data inside financial institutions Needed: real-time, streaming analytics to monitor SIFI, trading and the buildup of systemic risk LOUs publish records daily, which are concatenated by the LOUS: however, the data on organization types (Corporation, Fund, Trust, etc.), Geographic Regions, Business Registry Numbers, Hierarchy and other fields are often missing or inconsistently represented Implementing Reference Dataand Corporate Actions in a Blockchain

1. Universal Standards for LEI and
other Corporate Reference Data
Ontology2
4/27/2016
Enabling risk management and straight-through processing

2. Daily, GlEIF concatenates and archives the data
Financial Stability
Board
Regulatory
Oversight Committe
Global Legal Entity Identifier
Foundation
Local Operating Units
LOUs register entities and supply
data files to GLEIF
established oversees
GLEIS: A work in progress
• Individual Records are supposed be updated yearly, but more than 25% of records have lapsed
• LEI records must be updated sooner in response to corporate actions if the GLEIS is to be useful as golden copy
reference data inside financial institutions
• Needed: real-time, streaming analytics to monitor SIFI, trading and the buildup of systemic risk
• LOUs publish records daily, which are concatenated by the LOUS: however, the data on organization types
(Corporation, Fund, Trust, etc.), Geographic Regions, Business Registry Numbers, Hierarchy and other fields
are often missing or inconsistently represented
Ontology2
42/7/2016

3. Factors holding back the LEI
• Tens of billions of transactions have been sent to Trade Repositories
without validation of the usefulness of the LEI for identifying
counterparties
• LOUs use different software, different data models, and follow
different procedures, making upgrades to the system expensive
and error prone
• LEIs lack the hierarchy information necessary for aggregating risk,
and there is no clear and certain roadmap to remedy this.
• Neither the design nor the rule making process of the GLEIS
address key requirements for systemic risk analysis, the key
objective for regulators
• The LEI system, as it is, does not support straight-through
processing, which would drastically reduce costs and mitigate or
eliminate risks – and neither industry or regulators have a plan to
get us there

4. Corporate Actions
Changes in Reference Data
Financial Products
subsidiary relationships
Issued by, derived from, and
counterparty relationships
Legal Entities
Financial market participants
Trades
Trades are keyed to reference
data at moment of trade
Settlement
Accounting &
Risk Management
Regulatory
Compliance

5. Next-Generation LEI System
Global Legal Entity Identifier
Foundation
manages
Blockchain run collectively by Local Operating Units
Blocks in chain represent changes to reference data published by Local
Operating Units and their customers
We get best of both worlds:
Global update of reference data updated on a few second timescale
AND
Complete historical record at time of trade (keep block id for exact
reference!)
Ontology2
4/27/2016

6. who what
denominated by
from
to
caused by
Ontology2 technology (patent pending)
• Breaks up data from databases, and machine
readable and full-text documents into facts, like
breaking up matter into molecules
• Expresses facts as a graph of relationships between entities
(businesses, products, locations) and literal values (times,
dates, numbers)
• Transforms and understands data by applying rules that
match graph patterns
• Collects data into “droplets” which contain the facts
relevant to a particular situation, decision or need

7. Universal Graph Data Makes Possible…
Standard, Requirements,
and Design Documents
Case,Example and Test Data
Conventional Software
Code
Customer Communications
Exchanged Messages
(ex. ISO 20022)
If-then conditional
rules
Machine Learning and
Statistical Models
Schemas, Ontologies,
Formal Models
Scenario:
Test cases and computer code are
linked to requirements described in
plain-text documents
Scenario:
Rule, code and data changes are
linked to customer suggestions,
complaints and requirements
Scenario:
System automatically analyzes schema and documentation for new external
data formats, matched against schema library with 80% of fields correctly
mapped initially – users can answer questions interactively to get to 100%, this
transformation can be expressed as rules or compiled to software code

8. Data Validation & Evaluation
LEI records
Other registration
records
Place names &
containment
relationships
record identifier
7ZW8QJWVPR4P1J1KQY45
System extracts and
assembles relevant facts
about legal entity
Analyst-Friendly Rule
Rule metadata
database
Executable Rule List of grandfathered
identifiers
visual template
triggered rule
reasoner

9. Implementing Reference Data
and Corporate Actions in a
Blockchain
Reference data: state of world at a moment in time
Corporate actions: changes in the state of the world
block 77812
block 77813
block 77814
Trade Records
Tagged with block id for reference
data version
General Theory: Time & Change
Schema for Reference Data and Corporate Actions
Specializations
Reasoner/Compiler
Streaming
Reference Data
Processor
Trading
System
77812-…
77812-…
77813-…
Changes captured in blockchain
Batch
Reference Data
Processor
Risk analysis
Settlement
Regulators
Ontology2
patent pending