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: Approaches to migrating market data to the cloud to drive agility in trading operations

Market data in the cloud is an attractive proposition in terms of reducing the cost of on premise servers and storage, and moving into a more agile and flexible data delivery environment. It is also well suited to working from home, the fall-back of many financial institutions during lockdowns caused by the coronavirus pandemic. But...

BLOG

The Case Against Ripping and Replacing: Why Capital Markets Firms Should Build Intelligence Into What They Already Have

By Neil Vernon, Chief Product Officer, Gresham. For years, capital markets firms have faced the same challenge: modernising sprawling, legacy data systems. Each attempt follows a familiar pattern – ambitious platform overhauls, eight-figure budgets, years of disruption – yet the old systems often remain in use long after the new ones are live. Replacing systems...

EVENT

RepRisk Sustainability Breakfast Roundtable London

The London sustainability breakfast is part of the global roundtable thought leadership event series hosted by RepRisk in key markets, including, New York, Toronto, London, Frankfurt, Oslo, Copenhagen, Stockholm, Hong Kong and Singapore in 2026.

GUIDE

Corporate Actions USA 2010

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...