The Legal Entity Identifier (LEI) has passed the half million mark, the Global LEI Foundation (GLEIF) is encouraging the creation of registration agents that will help firms get LEIs, and plans are on the board for mapping services that will link SWIFT BICS and Association of National Numbering Agency (ANNA) ISINs to the identifier. Will this be enough to reach the next milestone of one million issued LEIs and, perhaps, the tipping point that will ultimately make the LEI a key identifier across the financial industry?
While there are no certain answers to these questions, we caught up with GLEIF CEO, Stephan Wolf, to find out how the organisation is promoting the LEI and encouraging take-up, particularly in the run up to the 3 January 2018 compliance deadline for the revised Markets in Financial Instruments Directive (MIFID II) and regulation (MiFIR), both of which require use of the identifier.
With over 503,000 LEIs issued and the half million mark passed early this month, Wolf says hundreds of thousands more LEIs will have to be issued before the end of the year to meet MiFID II and MiFIR requirements in Europe. In the US, all legal entities within the scope of the US Home Mortgage Disclosure Act (HMDA) must obtain an LEI before the regulation takes effect in January 2018.
To help firms get or renew LEIs in time for these forthcoming regulations, the GLEIF is promoting the concept of registration agents, which was initiated a couple of years ago and is now expected to gain traction. An early registration agent was Cusip, but large, global investment firms are now being encouraged to become agents and help their clients get or renew an LEI in time to meet compliance deadlines.
The agents sign contracts with one or many Local Operating Units (LOUs) – essentially LEI issuing organisations with the global LEI system – and funnel LEI information to their clients, perhaps publishing information on their websites to help a legal entity apply for an LEI with an LEI issuing organisation, or perhaps collecting and transmitting information required to verify the existence of an entity applying to an LEI issuer for an LEI.
While the agent scheme is designed to help firms obtain LEIs, Wolf cautions: “The LEI issuing organisations are standing ready to assist legal entities obtain an LEI as well as to collaborate with firms interested in acting as a registration agent. However, we cannot guarantee that LEIs will be issued in time for MiFID II and MiFIR if registration is delayed until the fourth quarter of 2017.”
Also with a view to easing the update and use of LEIs, the GLEIF is working with SWIFT and ANNA to develop standard links between the LEI and BIC codes and ISIN identifiers. Wolf says both BIC and ISIN mapping services are in pilot phase and if successful will be provided as services by SWIFT and ANNA. The GLEIF is also working with XBRL Global to include the LEI in XBRL taxonomy.