Legal Entity Identifier News & Views



News & Views

The following articles are the latest news and views on the global implementation of the legal entity identifier system. You can browse using the navigation buttons at the bottom of the page or search for content using the search function. You can search on keywords or on tags such as "Governance", "News", "Analysis" or "Regulatory".

Incorporating legal entity events and history in the GLEIS

The LEI ROC have published a final policy document setting out the ROC’s policy for incorporating legal entity events (corporate actions) and data history in the Global LEI System (GLEIS).

This document is a result of a public consultation held between 26 July 2017 and 29 September 2017 and a workshop held with respondents to the public consultation on 28 March 2018. The salient updates are:

  • A change in terminology to refer to “legal entity events" rather than “corporate actions“.
  • An incremental approach to implementation that would prioritize those events that occur relatively frequently and directly affect the Level 1 and Level 2 reference data (e.g., name changes, mergers, and acquisitions), and place a lower implementation priority on those events that occur relatively infrequently (e.g., reverse takeover)
  • Commercial or regulatory data feeds should be incorporated into the GLEIS to notify LOUs of potential changes to entities and to elicit updates to LEI records by the affected entities. In the case of inactive entities, data feeds could also be used to update the records without the entity’s consent, in line with existing ROC policies and GLEIF technical standards.
  • Effective dates should be incorporated into the GLEIS.
  • Users should be able to easily access and use an entity’s data history through multiple channels (e.g., whether they are using a user interface, an application programming interface, or downloadable files).
  • Complex acquisitions will reflect as accurately as possible the chain of legal events as reflected in the official registries of the relevant jurisdictions. Spin-off relationships will be recorded in the GLEIS on a fully optional basis, with possible mandatory reporting at a future date to be determined by the ROC.
  • The definition of inactive entities should be clarified to adequately capture entities that are still legally in existence but have no operations.
  • A number of publicly and non-publicly available sources may be used for data validation, including financial statements, other documents supporting the preparation of consolidated financial statements, regulatory filings, and other sources such as third party data vendors.

Further information can be found here.

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ISIN - LEI Initiative

The Association of National Numbering Agencies (ANNA) and the Global Legal Entity Identifier Foundation (GLEIF) today have commenced an initiative to link International Securities Identification Numbers (ISINs) and Legal Entity Identifiers (LEIs). The initiative has been created to help improve transparency of exposure by linking the issuer and issuance of securities.

The link will facilitate the aggregation of an Issuer’s data required to gain a view of their securities exposure.

Further information can be found here.

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A distinct entity identification system for US Federal Government

It has been estimated within US Government that 36 federal agencies are using up to 50 distinct, incompatible entity identification systems to track non-federal entities, across 80 regimes. The Data Foundation and the Global Legal Entity Identifier Foundation (GLEIF) has published a report entitled Envisioning Comprehensive Entity Identification for the U.S. Federal Government which proposes using the Legal Entity Identifier (LEI) as a universal identifier.

Further information can be found here.

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FSB launches thematic peer review on implementation of the LEI

The Financial Stability Board (FSB) is seeking feedback from stakeholders as part of its recently launched thematic peer review on the implementation of the Legal Entity Identifier (LEI)  The objective of the review is to evaluate the progress made by FSB members.  The review seeks comments on:

  • identifiers used by financial institutions for legal entities established in their jurisdiction or in foreign jurisdictions, and the extent to which they are mapped to the LEI;
  • awareness and adoption of the LEI in their jurisdiction, especially the existence or prospect of any market-driven or voluntary adoption of the LEI by market participants;
  • types of private sector uses of the LEI (e.g. to implement risk management frameworks, support financial integrity, reduce operational risks, or support higher quality and more accurate financial data) as well as the benefits measured or anticipated from such uses (including any quantification of the benefits, to the extent possible);
  • challenges and costs faced in acquiring and maintaining LEIs;
  • main obstacles faced by market participants to adoption and implementation of the LEI; and
  • ways to promote further adoption of the LEI, including specific areas where increased LEI uses would be the most favourable from a cost-benefit perspective.

Feedback should be submitted by 21 September 2018. Further information can be found at here.

TradeLens

Last week came an announcement A.P. Moller - Maersk and IBM regarding the creation of the creation of TradeLens, which aims to apply blockchain to the world’s global supply chain. Using blockchain smart contracts, TradeLens enables digital collaboration across the multiple parties involved in international trade. More than 154 million shipping events have been captured on the platform, including data such as arrival times of vessels and documents such as customs releases, commercial invoices and bills of lading. The UN believes full digitisation of trade paperwork could raise Asia-Pacific countries’ exports by $257bn a year. There are other similar blockchain initiatives such as Marco Polo. Developments are moving fast in this area and it’s important the GLEIF engage with these initiatives.

Further information can be found here and here.

Transfer of LEIs

Following the accreditation of GS1 AISBL by GLEIF as an LEI issuer, GS1 Germany GmbH transferred all LEIs under its management to GS1 AISBL. Going forward, GS1 Germany GmbH will operate as a Registration Agent.

Further information can be found here.

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ESMA LEI grace period to end

Today the European Securities and Markets Authority (ESMA) confirmed the temporary period allowing for a smooth introduction of the use of Legal Identity Identifiers (LEIs) will not be further extended and cease in July 2018.

Further information can be found here.

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BIC to LEI Mapping

The Global Legal Entity Identifier Foundation (GLEIF) has published the long awaited relationship file that matches an organization’s Business Identifier Code (BIC) to its Legal Entity Identifier (LEI).

The BIC is an 8 character code, defined as ‘business party identifier’ consisting of the party prefix (4 alpha-numeric), the country code (2 alpha) and the party suffix (2 alphanumeric). The branch identifier includes a 3 character optional element of the BIC known as the branch code and used to identify specific locations, departments, services or units of the same business party.

As of February 2018, more than one million LEIs have been issued to legal entities globally. Of the approximate 130,000 BICs assigned to date, currently some 45,000 pertain to organizations that are legal entities or foreign branches, and therefore qualify for the mapping against LEIs. Further information can be found here.

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NSD receives accreditation for LEI services

On the 24 January 2018 the National Settlement Depository (NSD) was accredited by the Global Legal Entity Identifier Foundation (GLEIF) as a provider for Legal Entity Identifier (LEI) services. Further information can be found here.

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ISE receives accreditation for LEI services

On the 10 January 2018 the Irish Stock Exchange (ISE) was accredited by the Global Legal Entity Identifier Foundation (GLEIF) as a provider for Legal Entity Identifier (LEI) services. Further information can be found here.

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LEI and Trade Finance

Following on from our article "Where next for the LEI", discussing the use of the LEI in Trade Finance, there is an interesting article on the Euromoney website called "Trade Finance Survey 2018: Plugging the trade finance gap".The article highlights that in recent years there has been weaker global trade growth and an increased level of protectionism. The article goes on to suggest the wider adoption of the LEI would lead to cost savings and efficiencies. It highlights the recent McKinsey and the Global Legal Entity Identifier Foundation (GLEIF) paper which can be found here.

The Euromoney article can be found here.

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BSX announces it’s authorized to issue LEIs

The Bermuda Stock Exchange (BSX) has confirmed that it is authorized to issue Legal Entity Identifiers (LEI) to Bermuda domiciled companies. As yet there is no confirmation from the GLEIF. Further information can be found here.

Important Announcement from ESMA

The European Securities and Market Authority (ESMA) has just issued a statement relating to "the smooth introduction of the LEI requirements"  under the Markets in Financial Instruments Regulation (MiFIR). MiFIR mandates EU investment firms to identify their clients that are legal persons with LEIs for the purpose of MiFID II transaction reporting. ESMA and national competent authorities are concerned not all required parties will obtain an LEI ahead of the 3 January 2018 deadline.

ESMA will allow for a temporary period of six months that:
  1. investment firms may provide a service triggering the obligation to submit a transaction report to the client, from which it did not previously obtain an LEI code, under the condition that before providing such service the investment firm obtains the necessary documentation from this client to apply for an LEI code on his behalf; and
  2. trading venues report their own LEI codes instead of LEI codes of non-EU issuers currently not having their own LEI codes.

For further information click here.

Time is running out

Interesting article in the FT claiming banks are looking for a reprieve to the 03 January 2018 MiFID II deadline for sourcing an LEI. Presently about a fifth of their clients do not hold an LEIs to allow them to continue trading. The article claims only two thirds of the 15,000 companies listed on European exchanges have LEIs. Read more here..

Get your LEI now!

The London Stock Exchange Group is advising if you require an LEI for the 3 January 2018 MiFID II deadline then the request should be submitted by 13 December 2017. Check out their website. The deadline for submitting a request for an LEI will vary by Local Operating Unit (LOU). The issue the LOUs are contending with is the verification of level II data is proving to be time consuming.

Entity Legal Forms Code List

The Global Legal Entity Identifier Foundation (GLEIF) has published the ‘Entity Legal Forms (ELF) Code List’. The ELF Code List assigns a unique code to each entity legal form. This should bring some consistency to the attribute. The ELF Code List is based on the ISO standard 20275 ‘Financial Services – Entity Legal Forms (ELF)’, developed by the International Organization for Standardization. The standard was published in July 2017.

The GLEIF is open to including additions to the ELF Code List, for example, there are a number of legal forms from the UAE which are not presently included.

For further information click here.

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