Sanctioned Securities Monitoring Service
Identify sanctioned domiciles, entities and all their issued securities to avoid significant fines.
The US announced new sectoral sanctions on Venezuela on 25 August 2017. The sanctions affect entities related to the Government of Venezuela and the national oil company Petroleos de Venezuela S.A.. Around 250 legal entities are associated with these parent companies, with an estimated 600-700 securities in-scope of the OFAC sanctions. Trading in debt and equity issued by entities related to The Government of Venezuela and the state-owned oil company, Petroleos de Venezuela S.A., will be affected, among other transactions.
The Executive Order allows for a wind-down phase until 24 September 2017, subject to reporting conditions. This means financial firms have less than a month to adjust their portfolios to block in-scope securities from being traded, held or serviced from that date onward. Any transaction that takes place during the grace period must be reported in detail to OFAC no later than 10 days after it occurs.
SIX Financial Information’s global sanctions data service is updated automatically in response to the new sanctions and will incorporate Venezuelan parents named in the OFAC list and their associated entities as of 30 August. Subscribers receive a daily scrubbed list of securities related to sanctioned companies, which can be integrated into banking systems ready for pre-trade screening.
Sectoral sanctions are particularly challenging for financial institutions to navigate, because only some industries are targeted. In the case of the recent sanctions against Venezuela, this means that portfolios may contain instruments that will become toxic only if corporate events such as a capital increase take place. To add to the challenge, an annex to the announcement whitelists some securities of given issuers, although other issuances from the same entity may be sanctioned.
The SIX service helps firms with this complexity by alerting users to potentially toxic instruments as well as ones that are already sanctioned, helping firms manage portfolio risk more efficiently. The service also provides a narrative explainer statement to give users in-depth insight into risky holdings in their portfolio, allowing them to make safer trading decisions.
Should you have any questions, please feel free to contact Julian Chan, Media Relations.
Phone: +41 58 399 2508
Fax: +41 58 499 2710
SIX Financial Information is a leading global provider of data and value-added services for the wealth and asset management industry. Aggregated directly and in real-time from 1500 worldwide sources - covering all the major trading venues - SIX’s database includes reference and market data, corporate actions, regulatory data and pricing information for over 23 million instruments. With offices in 23 countries, SIX combines the advantages of local expertise with global reach to offer financial specialists comprehensive data services for Asset Servicing, Middle Office, Investment Advisory, Portfolio and Fund Management.
SIX operates the infrastructure underpinning the Swiss financial sector and offers a comprehensive range of services around the world in the fields of securities trading and settlement, financial information and payment transactions. The company is owned by its users (approximately 130 banks of various orientation and size). Its workforce of over 4,000 employees and presence in 25 countries throughout the world generated operating income of CHF 1.8 billion and a Group net profit of CHF 221.1 million in 2016.