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Michael Shashoua, editor, Inside Reference Data
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With the structures for implementing the legal entity identifier basically in place, now the real work begins—actually implementing registrations

The new year will kick off with a lot of activity on legal entity identifier (LEI) registration and implementation. The US precursor to the LEI, the CFTC Interim Compliant Identifier (CICI), even has a December 31, end-of-year deadline for swaps market participants to adopt it, with subsequent deadlines for other segments of US markets. That's followed by the January 10 deadline for national regulatory authorities to assent to the charter for a global Regulatory Oversight Committee (ROC) issued by the Financial Stability Board (FSB) and the March launch of the FSB's LEI system.

Considering the imminence of global LEI implementation by the FSB in March, a surprisingly low fraction of the industry seems to be prepared. In polling in two recent Inside Reference Data webcasts, on October 17, just 24% of participants said they had registered themselves for a LEI, and on November 27, a total of 28% of participants said their firms had trouble finding time for LEI initiatives or weren't convinced of the LEI's importance.

The FSB has recognized concerns about duplication of LEIs by multiple local operating units (LOUs), and appears to be taking steps related to the March system launch to remedy that issue, according to Bill Hodash, managing director of business development at the Depository Trust & Clearing Corporation. "The inference is every LOU would query against that database before issuing any LEIs, to make sure they haven't duplicated them," he says. "It may be a little time before we get that."

While the industry has come a long way from a year or two ago, when the FSB and regulatory authorities had not yet sorted out who would be administering the LEI and how registration authorities would be set up in jurisdictions worldwide, the process is clearly not yet complete. All industry participants will have to get a second wind to push through the rest of the way—getting their registrations done, and sorting out issues around making sure those identifiers are accurate and complete. The FSB's March launch of its LEI system was never intended to be the end of the process—in fact, it's just the beginning of having the mechanisms available.

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Kim, you should learn more about the LEI

Kim, The LEI is not a security identifier (like CUSIP or ISIN) -- it is an identifier of legal entities themselves, not securities or financial instruments issued by firms. And, it IS free -- free to the public, and it will be freely available when it is implemented. Legal entities themselves will pay a small fee to register themselves in order to get an LEI, but the public will be able to access the global LEI system free of charge. As a matter of fact, a precursor to the LEI system is the CICI system operated for the CFTC by the DTCC (per the CFTC's requirement that parties to derivative transactions in U.S. markets must have such an identifier). You can download the entire CICI file of on the order of 30,000 financial market participants on a daily basis -- again, for free.

Posted by: Jefferson Braswell Dec 26 2012


is this really needed, another code than a cusip or isin? Come on, its like these people are making more money off of us in the name of transparency. This should be free.

Posted by: Kim Dec 18 2012

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The winners of the 12th annual Inside Market Data Awards 2014 and Inside Reference Data Awards 2014 were announced in New York on May 21, recognizing industry excellence within market data and reference data. To view the winners across the 31 categories click here.




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