About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

The OTC Derivatives Case for LEIs

Subscribe to our newsletter

Hot on the heels of the Financial Stability Board’s creation of expert panels to advise on the development of legal entity identifiers (LEI), international regulators IOSCO and the Bank for International Settlements this week weighed in to stress the importance of LEIs to the ongoing efforts to boost transparency in the OTC derivatives marketplace.

In their new ‘Report on OTC derivatives data reporting and aggregation requirements’, the BIS Committee on Payment and Settlement Systems (COPSS), which among other things outlines minimum requirements for reporting to a trade repository and acceptable data types, the trade groups describe the proposed system of LEIs as “an essential tool for aggregation of OTC derivatives data”.

So important, in fact, do COPSS/IOSCO consider the LEI that they suggest: “To promote timely development development of an LEI system suitable for international use, the (COPSS/IOSCO) Task Force recommends that the industry process include development of an LEI standard and issuance of LEIs under the auspices of an organization that develops and publishes international standards for the financial sector.”

Who can they have in mind?

Meanwhile, the Task Force recommends that derivatives trade repositories “support the establishment of the LEI system through active participation in development efforts and use of the system once it becomes established.” The Task Force further recommends that LEIs follow a set of basic principles that will allow them to support key OTC data aggregation requirements of “uniqueness, neutrality, reliability, open source and extensibility.”

Finally, the Task Force proposes that national authorities consider legislation or regulations to ensure harmonization of legal requirements for use of the LEI across different jurisdictions.

The Task Force acknowledges – as others have – the implementation challenges LEIs present. In particular, it suggests that ongoing international consultations, such as the FSB LEI workshop held in Basel last September, continue. For its part, FSB seems to have indicated that it is up for the challenge of communicating with the industry on how to bring LEI to fruition this year.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Tracking data lineage for regulatory compliance and change

The benefits of successful data lineage are significant, allowing financial firms to gain a better understanding of their applications and data, switch off unnecessary systems and data feeds, save costs, and support the business with the right data at the right time. The webinar will consider the complexities of tracking data lineage for regulatory compliance...

BLOG

Data’s Evolution Continues From Cost to Core Asset: DMS New York City 2025 Preview

Modern Chief Data Officers are not only the guardians of financial institutions’ data estates, they are also the caretakers of their single-biggest asset. With every part of an organisation’s business now dependent on data, the custody of its digital information is every bit as critical to operations as the management of trading teams or even...

EVENT

Data Management Summit New York City

Now in its 15th year the Data Management Summit NYC brings together the North American data management community to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

Managing Valuations Data for Optimal Risk Management

The US corporate actions market has long been characterised as paper-based and manually intensive, but it seems that much progress is being made of late to tackle the lack of automation due to the introduction of four little letters: XBRL. According to a survey by the American Institute of Certified Public Accountants (AICPA) and standards...