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

LEI Foundation Fixes Fees to be Paid by LOUs to Fund Global LEI System

Subscribe to our newsletter

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.”

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: In data we trust – How to ensure high quality data to power AI

Artificial intelligence is increasingly powering financial institutions’ processes and workflows, encompassing all parts of the enterprise from front-office to the back-office. As organisations seek to gain a competitive edge, they are trialling the technology in variety of ways to streamline and empower multiple use cases. Some are further than others along the path to achieving...

BLOG

The Data Year Ahead: AI Reality Check and New Skills Needed

If 2024 was the year when artificial intelligence (AI) came to the fore in data management, the next 12 months could see its spread ebb as financial institutions take a reality check and slow the frenetic pace of adoption. That, at least, is one of the many predictions for the new year from of a...

EVENT

TradingTech Briefing New York

Our TradingTech Briefing in New York is aimed at senior-level decision makers in trading technology, electronic execution, trading architecture and offers a day packed with insight from practitioners and from innovative suppliers happy to share their experiences in dealing with the enterprise challenges facing our marketplace.

GUIDE

What the Global Legal Entity Identifier (LEI) Will Mean for Your Firm

It’s hard to believe that as early as the 2009 Group of 20 summit in Pittsburgh the industry had recognised the need for greater transparency as part of a wider package of reforms aimed at mitigating the systemic risk posed by the OTC derivatives market. That realisation ultimately led to the Dodd Frank Act, and...