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Global LEI System Takes Two Small Steps Towards Operation

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The Global Legal Entity Identifier System (GLEIS) has inched forward with operational moves being made by the Regulatory Oversight Committee (ROC) to address reference data issues around the LEI and by the Commodity Futures Trading Commission (CFTC) to accept LEIs from all endorsed pre-local operating units (LOUs).

The Secretariat of the ROC has written a letter to national business registries seeking confirmation that there are no obstacles to the use of business registry names and numbers in the GLEIS. Business registry information was prescribed as part of LEI reference data by the Financial Stability Board (FSB) in its June 2012 recommendations for a global LEI system.

The letter further states that the ROC will maintain and publish a list of business registries that have provided written clarification or confirmation that there are no impediments to using their data. It continues: “Following publication of this list, entities registered in business registries on the list will be asked to supply their business registry numbers to pre-LOUs and LOUs as a key element of the reference data for publication in the GLEIS.”

Explaining the use of business registry information in the GLEIS and the clarification required from registries, the ROC letter states: “Under the global LEI initiative, each registered entity is allocated a unique 20-digit code, which is linked to a minimal set of information necessary to provide unique identification of the entity. Alongside elements such as the name and legal address, a vital role in the global identification system is also envisaged for the business registration number of the entity and the business registry reference where the entity is formed, as in many jurisdictions such registration defines and provides the proof of the existence of the legal entity. The proposed approach is that each entity applying for an LEI code would supply the required reference data to their preferred LOU, including their business registration number and name of the business registry, where available.

“To provide clarification that this proposed use of the business registry number is compatible with the conditions of use for your business registry, we are writing to seek your confirmation that: (1) there are no impediments to entities themselves with official business registry numbers in your registry providing their business registry numbers to LOUs, or the pre-LOUs, as part of their self-submitted reference data; (2) there are no impediments to the LOUs, or the pre-LOUs, freely publishing such registration numbers, as supplied by the entities; and (3) there are no impediments to the free use of such business registration numbers by users of the GLEIS.”

The letter concludes with a request for responses by December 2, 2013, including the official name of the registry for inclusion on the list of registries that have confirmed that there are no impediments to the use of their data. To sustain consistent reference data, the ROC will then ask all pre-LOUs and LOUs to use the exact names of the listed business registries.

The CFTC’s advance on the LEI is stated in a notice posted on its website on October 30. The notice follows the early October endorsement by the ROC of three pre-LOUs, namely the CFTC Interim Compliance Identifier (CICI) utility operated by DTCC and sponsored by the CFTC; WM Datenservice, sponsored by Bundesanstalt für Finanzdienstleistungsaufsicht; and Institut National de la Statistique et des Etudes Economiques (INSEE), sponsored by the French Ministry for Economy and Finance. The endorsement means pre-LEIs issued by these pre-LOUs will be globally acceptable to regulators that have assented to the ROC charter and include pre-LEIs in their transaction reporting rules.

In the wake of the endorsement, the CFTC notice, which is attributed to the Commission’s chief information officer, states: “From October 30, 2013, forward, registered entities and swap counterparties subject to the Commission’s jurisdiction can comply with the LEI requirements of the Commission’s swap data record keeping and reporting regulations by using any LEI endorsed by the ROC as globally acceptable.” Prior to the notice, registered entities and swap counterparties within the scope of the CFTC regulation had been using only CICIs, making this advance by the CFTC a move towards the global, federated LEI system envisaged by the FSB back in June 2012.

While these operational activities are important in making progress towards a global system, the issue of finalising the appointment of a board directors for the critical Central Operating Unit of the system remains outstanding, despite expectations that this would be achieved by the end of October 2013.

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