The Global Legal Entity Identifier Foundation (GLEIF) has fixed the licence fee that Local Operating Units (LOUs) must pay to the foundation for each LEI they issue at $20 a year. It has also introduced a member credit fee of $10 per LEI that LOUs must pay to the foundation to supplement funding of initial GLEIF operations, particularly the Central Operating System (COU) of the Global LEI System (GLEIS). Member credits, essentially short-term loans, will be returned to LOUs with interest, although no timeframe for repayment has been disclosed.
The LEI licence fees and member credit fees implement Recommendation 20 of the Financial Stability Board’s June 2012 report setting out recommendations for the establishment of the GLEIS. The ‘Sustainable Funding’ recommendation details the funding scheme of the global system as containing two components, ‘a local discretionary charge, and a common fee based on the number of registrations in each LOU to pay for the centralised operations in the COU, alongside any costs of implementing and sustaining the governance framework’.
The GLEIF has decided that licence and member credit fees will apply to all endorsed pre-LOUs and will cover all LEI activity from January 1, 2014. The licence fee, or ‘common fee’, to be paid by each LOU will be determined on an annual basis and will depend on the LOU’s LEI registration and renewal activity. For 2014, the annual period will run from January 1 to December 31.
The GLEIF says it expects LOUs may ultimately pass the cost of the licence fee on to LEI applicants in accordance with the cost recovery principles of the GLEIS. It concludes: “The application of this licence fee is in accordance with the principle of an efficient non-profit cost-recovery model. Any future adjustments to this licence fee may only occur in consultation with the Regulatory Oversight Committee [of the GLEIS] so as to ensure the GLEIF likewise operates in accordance with the cost recovery principles of the system and ensures fees are sufficiently modest so as not to act as a barrier to acquiring an LEI.”