The Group of 20 and the Financial Stability Board were among the backers as the Global Legal Entity Identifier Foundation (GLEIF) was put up in the first decade of the 2000s. Each identifier, LEI, is a 20-character code that signifies who is who among financial-market participants, and potentially also who owns whom.
In a research note (here republished on FinReg Alert), Allan Grody of industry analyst firm Financial InterGroup takes a look at the current state of the initiative. The number of issued LEIs just passed the 2-million mark, and the monthly numbers of new entity registrations are about the highest ever. However, registrations of ownership relations between entities have slowed.
MATCHING WITH BIC AND ISIN
The original vision was that all financial-market participants should be registered for a Global LEI but for this to happen, the GLEIF estimates it would need to multiply its number of issued LEIs by ten times, to about 20 million.
Work has begun to map the LEI against SWIFT’s BIC codes as well as against ANNA’s ISIN numbers for securities issuers, and adaptation for distributed digital processes has been initiated.
“Looking forward GLEIF has yet to implement legal entity events that may change LEI’s relationships with their parents. We await fund family and government entity LEI registrations. We are still unaware of any path forward to resolve Provisional Node Identifiers, the place holder for known legal entities that are not required, under account consolidation rules, to register a parent LEI,” writes Allan Grody.
“We may also benefit from knowing the number of LEIs issued under the newly initiated Validation Agent and vLEI regimes. Finally, we have yet to see either the ROC or GLEIF reconcile account consolidation rules for parent hierarchies with risk management hierarchies.”