Mixed Messages About LEI

Just as the last issue of Inside Reference Data went to press, the story trickled out of the Financial Stability Board (FSB) that the March 2013 deadline for the global legal entity identifier (LEI) is only intended to be the date by which bodies and committees responsible for the global LEI system will be in place, not for actually having the global LEI system in production, as was widely thought.

The FSB's response when asked about the need to correct this perception was to emphasize that the G-20 is expected to endorse a charter for the Regulatory Oversight Committee (ROC) in November and the FSB itself would endorse a ROC charter in October.

Was there a collective denial in the industry about what these milestones meant and that they only promised the creation of a preliminary means to oversee LEIs? Or was it a failing of the FSB to make clear that the March deadline really refers to the establishment of the ROC, the Central Operating Unit and Local Operating Units (LOUs), not the actual completion of assigning all LEIs globally?

Either way, the outcome is no surprise, according to data operations consultant and expert Ed Ventura. "With the number of jurisdictions involved and the number of banks required to implement the LEI, the time frames were aggressive," he says. "I was hoping that it would have been in use as stated, but I'm not giving up on the concept."

In the interest of making sure the LEI is done right, more time beyond March may be necessary to actually create all the LEIs. The catch is that with many countries still needing to pass legislation or set rules for LEI standards that are necessary to establish their LOUs, and still lacking direction from the FSB that's necessary to do all of that, even six or seven months may be an ambitious and short amount of time to meet that goal.