2012 and Raising the Standards

The legal entity identifier (LEI) dominates our coverage once more as we go to press with the December edition of Inside Reference Data. The conversations, however, have changed in tone and subject matter since I began as editor six months ago.

Where the debate was once dominated by industry participants trying to understand and comply with LEI standards as set out by US authorities, the focus has shifted to global bodies and what they will mandate for LEI standards. Now the question is whether the US standards, which set the ball rolling, will match what is desired by the rest of the world.

The Group of 20 Finance Ministers and Central Bank Governors (G-20) and the Financial Stability Board (FSB) have gotten behind the idea of a global LEI standard, and the G-20’s June 2012 summit stands as a deadline for delivery of an LEI governance framework. It’s up to the FSB to determine the details of that framework. As Nicholas Hamilton reports, worldwide support for LEI is likely to trump differences in regional or country-by-country desires on specific points about the LEI.

From what I heard last month in Hong Kong at the Asia-Pacific Financial Information Conference, the need for an LEI is also catching on in the Asia-Pacific region. Yet, market participants there still seem to have the same uncertainty about specifics—even more so than in other regions.

Not everything about LEI standard plans is amorphous, however. The International Organization for Standardization (ISO) is about to ratify ISO 17442 as a standard for LEI. ISO’s Technical Committee 68 (TC68) plans to publish a manual about LEI that will explain the roles of an applicant for an LEI and the registration authorities, as Cynthia Fuller, secretary of the financial services working group at ISO, relates in this month’s “Interview With.” So that may be one signpost for all the industry parties looking for direction on what to do about LEIs, and a hopeful sign for progress in the next six months.

Also next year, corporate actions professionals can expect a lot of progress—or rather, doing a lot of work to ensure continued progress—as listeners to our November 16 webcast heard. The push is on for greater accuracy in corporate actions data—all closer to market deadlines than ever. Sentiment among respondents to a poll question during the webcast was that there is a lot of room for more automation of corporate actions, with 65% saying there is room for significantly more, and another 27% saying partly so—or at least some room. ISO also has its hand in this area, as webcast panelists pointed out, noting that ISO’s 20022 standard is intended to address the greater complexity in corporate actions.

Having seen the LEI and corporate actions issues develop this much, undoubtedly 2012 holds a full agenda for reference data professionals. As this year nears its end, and holidays arrive, please stay tuned here for continued perspective on matters of concern with reference data.