International Association of
Risk and Compliance Professionals (IARCP)
A Legal Entity Identifier (LEI) is a
unique Identidier associated with a single
A standard legal entity identifier (LEI)
is a necessary step in order to measure and monitor
A unique identifier of counterparties
is really critical to unraveling linkages and
A 20-character alphanumeric code has
been suggested by the International Organization for
The Financial Stability Board LEI
Expert Group has agreed that
a 20-character alphanumeric code is a good basis for the global
The Financial Stability Board LEI Expert Group is
continuing to review the LEI
eligibility criteria as well as the reference data that the
regulatory community views as essential and, consequently, would
require to be associated with the identifier.
In the first round of discussion, the Expert Group agreed that the
following six data elements will all form part of the minimum set
of reference data attributes that will be required by the
regulatory community on the launch of the LEI:
1. The official name of the legal entity;
2. The address of the headquarters of
the legal entity;
3. The address of legal formation;
4. The date of the first LEI
5. The date of last update of the LEI;
6. The date of expiry, if applicable.
It should be noted that this limited minimum set of the
reference data is the product of the first round of regulatory
As the Expert Group completes its work, it expects to propose
additional elements both for reference data attributes, and for
the audit trail of changes and updates to the LEI, in order to
meet various regulatory needs.
Work continues on all other
aspects of the LEI framework with the aim of completing an
internal report to the agreed deadline.
Legal Entity Identifier (LEI) –
Timeline of Major Events
• U.S. financial regulators and the Financial Industry
Regulatory Authority (FINRA) hold a Regulatory Data Workshop,
identifying the lack of a standard way of
identifying parties to financial contracts as a “linchpin”
for improving regulation, private risk management, and business
• The Dodd-Frank Wall Street
Reform and Consumer Protection Act (Dodd-Frank Act) establishes
the Office of Financial Research (OFR),
which has the authority to establish standards for how U.S.
financial companies identify themselves in reporting to the OFR.
The Dodd-Frank Act also requires the U.S.
Commodity Futures Trading Commission (CFTC) and the Securities and
Exchange Commission (SEC) to issue rules for reporting swap
transactions, including how counterparties to those transactions
• The OFR publishes a policy statement to
promote the establishment of a universal
Legal Entity Identifier (LEI).
The statement asks for public input on the technical
requirements for LEI, associated reference data, and a system that
would issue and validate LEIs and reference data.
The statement calls for establishing a public-private solution
through international consensus.
• The CFTC and the SEC issue proposed rules for reporting
swap derivative transactions.
The proposed rules express a preference for using a universal
identifier for parties to such transactions, if it can be
established through international consensus and is available in a
The CFTC proposed rule references LEI defined in OFR policy
statement as a candidate.
• Staff from U.S. financial regulators and FINRA publish a
discussion paper entitled “Creating a Linchpin for Financial Data:
The Need for a Legal Entity Identifier”.
• The International Organization for Standardization (ISO)
creates a dedicated working group to establish an Legal Entity
Identifier (LEI) standard,
develops a draft specification (ISO 17442), and selects a
registration authority to oversee assignment.
• A global coalition of financial services firms and trade
associations publish a proposal for industry requirements for a
global Legal Entity Identifier (LEI) solution.
• ISO’s initial vote on the draft LEI standard closes.
• The Canadian Securities Administrators publishes
Consultation Paper 91-402 – Derivatives: Trade Repositories, which
calls for each derivative market participant to be assigned a
unique legal entity identifier based on universal internationally
• A global coalition of financial services firms and trade
associations publish a recommendation for the organizations that
it believes are best suited to operate a global Legal Entity
Identifier (LEI) system to aid
regulators and industry in monitoring systemic risk.
The industry recommendation was for a combination of ISO, the
Society for Worldwide Interbank Financial Telecommunication
(SWIFT), the Depository Trust & Clearing Corporation (DTCC),
the Association of National Numbering Agencies (ANNA), and
business registries to maintain the standard, issue identifiers,
and validate and maintain reference data for entities assigned an
identifier. Under this industry recommendation, ISO would
maintain the LEI standard.
• In response to a request from G-20 leaders, the
International Organization of Securities
sends a Consultation Report on Regulatory Issues Raised by the
Impact of Technological Changes on Market Integrity and Efficiency
to the Financial Stability Board (FSB), explaining that a unique
• The FSB issues a press release acknowledging the progress
of financial regulators and industry to establish a single global
system for uniquely identifying parties to financial transactions,
and announcing that it would arrange a workshop to discuss how
best to coordinate work to take the Legal Entity Identifier initiative forward.
• The Hong Kong Monetary Authority (HKMA) publishes a
Consultation Paper on Logistical and Technical Arrangements for
Reporting to Hong Kong Trade Repository (HKTR), stating that HKTR
will work with HKMA to consider how to incorporate the global
Legal Entity Identifier
• Anticipated publication of consultative report by the
Committee on Payment and Settlement Systems (CPSS) and the
Technical Committee of IOSCO on over-the-counter (OTC) derivative
data aggregation and reporting, which will discuss the potential
use of an Legal Entity Identifier for OTC derivative reporting worldwide.
• The FSB workshop on
Legal Entity Identifier is
scheduled for September 28 and 29.
• Anticipated publication of CFTC and SEC final rules on
• Anticipated publication of ISO
standard for LEI (ISO 17442).
• Anticipated start of reporting required by
CFTC and SEC
rules for swap derivative transactions.
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