Keeping Swift in the LEI Mix

Pronouncements that Swift's removal as a registration authority for the legal entity identifier mean it's completely "out," appear shortsighted, IRD editor Michael Shashoua says

Hyperbolic pronouncements from other trade publications and critics aside, the International Organization for Standardization's (ISO) removal of Swift's registration authority role from the legal entity identifier (LEI) standard, as reported by Nicholas Hamilton, won't end Swift's role in administering the LEI.

Necessity and reality dictate that Swift should continue to be involved as a competent authority and a central organizing body for the LEI. Large volumes of messages using the new LEI standard will go through Swift regardless, so it makes sense that the identifiers get registered in some way with that financial messaging services provider.

The Financial Stability Board (FSB), which is deliberating standards for the global LEI, initiated ISO's removal of Swift. The FSB sought this to avoid a potential conflict between Swift and itself, each governing the LEI. Certainly having dueling authorities handling the same function would have created the sort of confusion the LEI is supposed to solve in the first place.

Undoubtedly, Swift and the FSB will have to keep talking and maintain dialogue as the LEI is fine-tuned and eventually implemented. These bodies need to coordinate their activities to make sure the planned global LEI is synchronized everywhere. If the FSB were to "go it alone," the LEI could start out the same everywhere, but might end up having variations between its use through Swift and its use elsewhere, which again would defeat the purpose of instituting it.