National Settlement Depository (NSD) has become a candidate to receive permanent accreditation to assign Legal Entity Identifiers (LEIs) to companies operating on financial markets.
NSD has been assigning these 20-digit international codes since 2013; however, this was done on the basis of a temporary status as a preliminary Local Operating Unit (pre-LOU).
According to the central securities depository’s press release, to become a LOU Candidate, NSD signed a master agreement with the Global Legal Entity Identifier Foundation (GLEIF).
NSD is the first company in Russia and the entire CIS to obtain this status. According to the GLEIF website, there are 23 organizations worldwide which have applied for LOU status. Six LOUs have been accredited to date.
As a rule, in different countries, LOU functions are performed by various organizations: exchanges, information companies and news agencies, depositories, and credit bureaux.
In 2016, NSD assigned 136 new LEIs; thus, the number of companies with LEIs increased by 20% (to 835 firms).
As the GLEIF website explains, more than 500,000 LEIs have already been assigned globally. The sphere that uses these codes continues to expand. For example, beginning next year, all organizations that are obliged to observe the Markets in Financial Instruments Directive (MiFIS) requirements in the EU shall have LEIs. GLEIF plans to expand the LEI database by adding data on legal entities’ parent and subsidiary companies to it.
NSD has been functioning as a pre-LOU since 2013. In 2016, NSD assigned 136 new LEIs; thus, the number of serviced codes increased by 20% (to 835 LEIs). During this period, 407 LEIs were verified.
GLEIF began its work in 2014. It is responsible for supporting the LEI system and accrediting LOUs all over the world. A decision to create the global legal entity identifier system for participants of financial transactions was made by the G20 in response to the global financial crisis to increase financial market transparency and to strengthen control over systemic risks.
In Russia, LEIs are used to identify the holders of depositary receipts (DRs) issued by Russian companies.
The DUNS number is an identifier for all legal entities in the world; it has been assigned since 1963 by Dun & Bradstreet, a private corporation which owns the largest database. The Dun & Bradstreet database contains information on more than 260 million legal entities.