The Association of National Numbering Agencies (ANNA) is back in the game and vying for a place in the development of the global legal entity identifier system proposed by the Financial Stability Board (FSB) and approved by the G20 global summit in Mexico last month.
An ANNA general meeting in London last month deemed the characteristics of ANNA and its membership, such as local presence, global reach, expertise in standardisation and instrument identification, and ANNA’s business relationships with market players across the globe, as fundamental attributes to the successful global implementation of the LEI initiative. It said these qualities would allow ANNA to contribute its strengths and local expertise to the LEI implementation and that it is committed to supporting development of local LEI infrastructures and has the ability to do so through its federated model of local National Numbering Agencies (NNAs).
ANNA’s return to the playing field is in great part a public relations gesture. The association was named within the Global Financial Markets Association led group, including DTTC and Swift, that proposed a centralised solution to the LEI back in July 2011. But it has since dropped out of sight, despite having a place in one of the expert working groups looking at the LEI structure ahead of the ratification of the ISO 17442 standard for the LEI and G20 approval of the FSB’s federated approach to developing an LEI infrastructure.
The ANNA meeting was followed by a meeting of the Cusip Global Services board of trustees – Cusip Global Services was one of the 22 founding members of ANNA in 1992 – in New York early this week that endorsed ANNA’s sentiment.
Scott Preiss, vice president at Cusip Global Services, explains: “At the Cusip Global Services board of trustees meeting it was noted unanimously that mentions of ANNA and the capabilities of NNAs in relation to the LEI had become infrequent. The board wants to remind the financial marketplace of the value NNAs could bring to the development of the LEI. The hope of the board was that after the FSB’s June recommendations on the LEI and G20 approval rubber would hit the road and groups would be formed for further development and implementation. The board wants its voice heard.”
Preiss suggests the federated presence of global NNAs, their subject matter expertise and ability to contribute to a centralised warehouse, perhaps the Central Operating Unit outlined by the FSB in its recommendations, would make them exceptional Local Operating Units (LOU) as also outlined by the FSB.
He acknowledges that Cusip Global Services would like to be an LOU in North America. While no formal proposals on which firms will build the LEI structure have yet been requested by or submitted to the FSB, he says: “ANNA covers all countries. It is not yet clear whether there could be multiple LOUs in one jurisdiction or one LOU covering many jurisdictions, but NNAs could be part of the FSB’s LEI solution. It could be, for example, that in a market where an NNA is strong in equities but not fixed income, there could be more than one LOU. Similarly, in a small market, an NNA may not want to be the LOU.”
As well as the physical presence of NNAs, Preiss recommends them for their data quality and ability to immediately embrace ISO 17442. “NNAs need to be reintroduced into the LEI dialogue as important implementation groups are formed. In terms of competition, there are no other organisations with such a good natural fit as LOUs. The LEI is predicated in part on data quality from registries and NNAs have higher levels of data scrutiny and quality than other organisations. ANNA has unique capabilities and its model should be leveraged for LEIs.”
From a commercial standpoint, while Cusip Global Services is operated for the American Bankers Association by S&P Capital IQ, Preiss says S&P Capital IQ would have no involvement in any LEI development or distribution save as a consumer of LEIs should Cusip Global Services become an LEI LOU in North America.