Tine Thoresen: The VIP Treatment

It seems that every time I enter a department store or check out of a hotel, I’m now being offered the chance to sign up for some sort of loyalty scheme or awards program by filling in a form with my personal details.
The reference data industry is, as always, very much in tune with what’s hot, and it looks like this market is now moving in the same direction. The VIP benefit will be to have a unique universal legal entity identifier.
The 2 million or so entities that will be subject to this legal entity identifier are likely to have to go through the same self-registration process as any cash-savvy shopper or tourist has become used to.
In May, a coalition of financial services trade associations published recommendations for global legal entity identifier requirements, as requested by regulators and market participants.
It was perhaps not a big surprise that the coalition recommended the new identifiers be assigned via a self-registration process, meaning it would not be up to the financial services firm to register all the entities it deals with, but for the entity itself to register.
So does it make sense? Yes. Self-registration is a tried-and-tested model. In the retail industry, barcodes are assigned like this. And even without much prior knowledge of the barcode system, most people would easily guess that a company that wants to sell a product in retail outlets would be the organization responsible for registering its products and getting the barcode. The same is true for Bank Identifier Codes (BICs), which identify international financial institutions. The institution would have to fill in a form to request a code, verify and accept the information. When registering for either of these codes, there would also be cost involved that covers the expense associated with processing the request.
The Barcode Case
The interesting point, though, is that both these examples are relevant to today’s legal entity identification discussion. Barcodes are issued by the standards body GS1, and BIC codes are assigned by interbank utility Swift—both candidates for becoming a registration authority for the new legal entity identifier.
This means the self-registration process firms have now said they want is already the process used by these two contenders, presumably benefiting any future implementation process.
It may sound as though this is not particularly groundbreaking, but the statement from the coalition provides further backing for a process that is perhaps more challenging than it sounds. The reason is that even though the fill-in-a-form-to-register approach is pretty straightforward, it is less so when it comes to forcing entities to register for a code. The VIP benefit of assigning a number may not be as appealing as a free perfume sample or a complimentary suite upgrade to the average consumer.
In fact, introducing the self-registration process for legal entity identifiers is believed to require regulatory involvement—and not just in the US and Europe if this is to become a truly international identifier. International regulators may have to incorporate this into law to ensure legal entities are forced to register. It would not work if it was optional to register and entities failed to see the benefits. VIP treatment from pleased financial institutions could be a bonus, but the financial industry would then have to pay serious attention to the VIP benefits offered by the program. It is clear that self-registration is a model that works—now it is just about making it work for the LEI Insider scheme.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: https://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
DORA delay leaves EU banks fighting for their audit rights
The regulation requires firms to expand scrutiny of critical vendors that haven’t yet been identified.
Citi gears up for EU T+1 climb
The bank has a dedicated team examining what it needs to do to ensure a successful transition to T+1 in Europe.
The great disappearing internet—and what it could mean for your LLM
AI-generated content, bots, disinfo, ads, and censorship are killing the internet. As more of life continues to happen online, we might consider whether we’re building castles atop a rotting foundation.
AI’s next gig: The rising cost of off-channel communications compliance
As the cost of analyzing communications increases, what tools can firms deploy to save time and money while avoiding penalties?
CAT on life support after appeals court ruling
Ahead of a comprehensive review promised by the SEC, lawyers believe that the recent overturn of the Consolidated Audit Trail’s funding order could herald its demise.
Euroclear readies upgrade to settlement efficiency platform
Euroclear, Taskize, and Meritsoft are working together to deliver real-time insights and resolution capabilities to users settling with any of Euroclear’s CSDs.
Messaging’s chameleon: The changing faces and use cases of ISO 20022
The standard is being enhanced beyond its core payments messaging function to be adopted for new business needs.
TT partners Thoma Bravo, Fitch launches GenAI solution, AI infrastructure woes, and more
The Waters Cooler: EquiLend acquires Trading Apps, Ultumus and BMLL partner for ETF data and analytics, and more in this week’s roundup.