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

Upcoming Webinar: How to maximise the use of data standards and identifiers beyond compliance and in the interests of the business

Date: 18 July 2024 Time: 10:00am ET / 3:00pm London / 4:00pm CET Duration: 50 minutes Data standards and identifiers have become common currency in regulatory compliance, bringing with them improved transparency, efficiency and data quality in reporting. They also contribute to automation. But their value does not end here, with data standards and identifiers...

BLOG

Entrust in Talks to Acquire AI-Powered Identity Verification Specialist Onfido

Entrust, a provider of trusted identities, payments, and data security, is in exclusive discussions to acquire London-based Onfido, a provider of cloud-based, AI-powered identity verification (IDV) technology. If the acquisition completes, Entrust would add a compliant AI/ML-based biometric and document IDV tech stack to its portfolio of identity solutions. It would also have an opportunity...

EVENT

RegTech Summit New York

Now in its 8th year, the RegTech Summit in New York will bring together the regtech ecosystem to explore how the North American capital markets financial industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

Regulatory Data Handbook 2023 – Eleventh Edition

Welcome to the eleventh edition of A-Team Group’s Regulatory Data Handbook, a popular publication that covers new regulations in capital markets, tracks regulatory change, and provides advice on the data, data management and implementation requirements of more than 30 regulations across UK, European, US and Asia-Pacific capital markets. This edition of the handbook includes new...