Sifma Tech Expo Takeaways

For financial data management professionals attending the Sifma Tech Expo in New York last week, the most relevant stop took place off the exhibition floor, in two panel discussions on the second morning of the show, concerning the legal entity identifier (LEI) and the role of regulators in setting data standards.

The G-20 endorsement on June 20, during the conference, of the Financial Stability Board's standard for the LEI quieted the debate about what the LEI standards will include. The first discussion included a presentation by the Depository Trust & Clearing Corporation (DTCC) of its LEI utility, which will allow creation of identifiers if none have already been designated for securities.

Yet there may still be more travails concerning the March 2013 due date for compliance with the LEI standard, according to Robin Doyle, a senior vice president at JP Morgan Chase, who works with Sifma on LEI issues. The deadline could be a bit too soon and too challenging for the industry to meet, she said.

The Commodity Futures Trading Commission (CFTC) is said to be close to issuing its own LEI designation that would clarify its interim identifier known as CICI. The CFTC will now also have to choose a utility to serve as the local operating unit (LOU) for the US, as requested by the FSB's LEI recommendations. This is another curious interim step, as supposedly a greater global LEI utility will be decided and operating by March 2013.

The regulators themselves, of course, said they were needed to address the long-running need for an LEI. Teresa Glasser, acting deputy director of the US Treasury's Office of Financial Research, said an overall view of data and systems providers is necessary to improve tracking in a way that could prevent something like JP Morgan's huge losses – if lack of identifiers did indeed play a part in that event. Srinivas Bangarbale, chief data officer at the CFTC, says LEI is not the end of identifier considerations, pointing to a USI (Unique Swaps Identifier) and UPI (Unique Product Identifier) as next up for consideration.

Financial firms' reference data executives who have spoken out about regulatory and standards processes for the LEI and otherwise, are saying the LEI process has had a good communication between regulators and the industry, but this is an exception to the norm, and they want to see more of this when it comes to Solvency II and other items.

The takeaway from this year's Sifma Tech Expo, at least on the regulatory front, is that the development of the LEI to date is how the industry would like to see its implementation progress, not to mention all the other regulatory demands soon to come.