As We Predicted
Thinking about what matters in the reference data space for this week's column, it may seem like the US Commodity Futures Trading Commission (CFTC) designation of Swift and the Depository Trust & Clearing Corporation (DTCC) to administer the CFTC Interim Compliant Identifiers (CICI) left some issues to be resolved, especially about how CICIs might need to be updated or scrubbed in some way to synchronize with legal entity identifiers (LEIs).
CICI operates using the ISO 17442 messaging standard, as will the LEI, so any transition should be seamless, according to Swift. The question some are asking, however, is whether the CICI will fit the global LEI framework, which is akin to asking, ‘Will the US LEI fit the global LEI?' and, really, how will local operating units' implementation of the LEI square with each other's and the overarching global standard? These are really the same questions that were out there before the CFTC decision.
What the CFTC naming of Swift and DTCC really does is show that the view expressed here on May 4 was very much on the mark—that Swift should not be counted out from consideration as an LEI administrator.
Winning the CFTC designation to run CICI is an important signal to global authorities making decisions concerning the LEI, such as ISO (International Organization for Standardization) and the Financial Stability Board (FSB) that Swift (and DTCC) have merit as administrators, and shouldn't be counted out lightly.
Critics may say that administering the identifiers, whether CICI or the LEI, shouldn't be left to the financial industry at all, because the issues the identifiers have been established to track and prevent are what caused the most recent financial crisis as well as other more recent scandals. The distinction that gets lost, however, is that organizations like depositories and messaging utilities aren't the ones causing crises, but have been instrumental in sorting out wreckage when something like the Lehman Brothers collapse happens, and have expertise to do so.
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