An LEI is a 20-character alpha-numeric code that connects to key reference information that enables clear and unique identification of companies participating in global financial markets. (By our reckoning, that allows for 13 quadrillion quadrillion (1.3 x 10^31) possible codes.)
In 2012, the Depository Trust & Clearing Corporation (DTCC) and Swift were named by the CFTC as the providers of an interim LEI solution, known as CICIs – CFTC Interim Compliant Identifiers. The two organisations then developed a CICI Utility, a portal that issues LEIs to any financial organisation.
Now, the Financial Stability Board’s Regulatory Oversight Committee (ROC) has endorsed this CICI Utility, as well as two others provided by other regulators. The significance of this step is that the CICIs issued by the utility can be used for reporting to any regulator that has assented to the ROC charter.
“The value of the CICI Utility goes well beyond the ability to ensure compliance with regulations,” said Ron Jordon, DTCC managing director and chief data officer. “To improve risk management practices, market participants need to make sure the information they hold about themselves and their counterparties or clients is accurate and well-maintained over time. The evolving GLEIS [global LEI system], and the role of the CICI Utility, adds significant value to this, serving as a vital first step in improving transparency, efficiency and risk mitigation in the global marketplace.”
His colleague, William Hodash, DTCC managing director and chairman of the CICI Utility, added: “The progress that’s been made in establishing a standard unique global identifier and requiring it on mandatory reporting for all counterparties to derivatives transactions paves the way for other asset classes to be brought under the fold, giving global regulators and market participants alike greater insight on potential risk exposures.”
As well as the CFTC-sponsored CICI Utility, the ROC also endorsed WM Datenservice, sponsored by German regulator BaFin, and INSEE, which is sponsored by the French Treasury.
The ROC’s endorsement letter is available by clicking here.
DTCC’s statement is available here.
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