Plans to create a new legal entity identifier (LEI) system to help regulators and industry participants monitor systemic risk are gathering momentum, with Swift winning a vote to act as the registration authority for the ISO standard and a group of trade associations setting out their framework.
The US Office of Financial Research – established under the Dodd-Frank act – called for the LEI system last year and wants it ready for mandatory adoption by July.
The ISO (International Organisation for Standardisation) has been working to develop a standard and has now reached a milestone in the process with Swift beating off competition from the Association of National Numbering Agencies (Anna) to act as the registration authority. Work is underway on finalising a draft standard by the end of next month.
Meanwhile, a group of financial services trade associations – including Sifma and the British Bankers Association – have set out their requirements for a new LEI system as part of a request for proposal process.
It’s now calling for more talks with participants in the financial markets and regulators around the world as well as with players developing offerings and wants “immediate engagement” with potential providers “to help them understand these requirements”.
Says the coalition: “A global standardised Legal Entity Identifier will help enable organisations to more effectively measure and manage counterparty exposure, while providing substantial operational efficiencies and customer-service improvements to the industry.”