LuxCSD, a central securities depository jointly owned by the Central Bank of Luxembourg and Clearstream International, has become Luxembourg’s pre-Local Operating Unit (LOU) which, with the help of DTCC, will issue Legal Entity Identifiers (LEIs) within the Global LEI System.
LuxCSD is sponsored as a pre-LOU by the Central Bank of Luxembourg and has been allocated a four-digit prefix for the LEIs it issues by the Regulatory Oversight Committee of the Global LEI System. This gives it pre-LOU status and allows it to issue LEIs, although it says it will not start to issue entities in Luxembourg with LEIs – which it has yet to name – until it has been endorsed by the ROC. In a country where many entities do business in international markets, the endorsement process is particularly important for LuxCSD as LEIs issued before endorsement can be used only at a national level, while those issued after endorsement can be used on an international scale.
LuxCSD hopes to achieve endorsement and become fully operational in June, with DTCC providing infrastructure for its LEI service. The company considered whether to build, buy or partner to fulfil its mandate as a pre-LOU and decided to work with DTCC in a collaboration that leaves LuxCSD with responsibility for its LEI issuing service and customer relationships, and requires DTCC to process requests for LEIs and handle issues such as legal entity reference data validation and the avoidance of LEI duplication.
Patrick Georg, general manager of LuxCSD, explains: “Our mandate to become Luxembourg’s pre-LOU and the partnership with DTCC’s Global Market Entity Identifier utility, the world’s largest and most recognised global pre-LOU [formerly the CICI utility], allows us to serve the needs of local market players in the most efficient way.”