Financial Stability Board seeks feedback on LEI implementation

Maria Nikolova

The FSB invites comments from financial institutions, industry and consumer associations, as well as other stakeholders on implementation of the LEI.

The Financial Stability Board (FSB) has earlier today opened a consultation as a part of its recently launched review on the implementation of legal entity identifiers (LEIs), 20-character, alpha-numeric codes that uniquely identify legally distinct entities which engage in financial transactions.

The thematic review provides an opportunity to evaluate the progress made by FSB members in response to the G20 Leaders’ call at the June 2012 Los Cabos Summit for “global adoption of the LEI to support authorities and market participants in identifying and managing financial risks”. In particular, the objectives of the peer review will be to:

  • Appraise the approaches and strategies used by FSB members to implement the LEI, including its adoption for regulatory requirements by FSB member jurisdictions.
  • Assess whether current levels and rates of LEI adoption are sufficient to support the ongoing and anticipated needs (particularly financial stability objectives) of FSB member authorities.
  • Identify the challenges FSB members face in further advancing the implementation and use of the LEI, and make recommendations (as appropriate) to address common challenges.

The peer review will not examine the governance or technical functioning of the LEI system but will rather focus, across the FSB membership, on LEI implementation approaches and uses for financial stability purposes and on possible strategies to further global adoption.

Analysis conducted by the peer review team will also cover the extent to which LEI has affected, replaced or complemented proprietary, more costly or less comprehensive identifiers, and any obstacles members face in replacing or complementing existing identifiers, as well as the benefits achieved and obstacles faced in the uses of the LEI and examples of cost-benefit analyses of LEI use.

The peer review report is expected to be published in the first half of 2019. The report may draw lessons and make recommendations to address common implementation challenges. The document will not set new policies but could recommend actions for consideration by the relevant bodies (e.g. FSB or SSBs) to address these challenges.

The FSB invites feedback from financial institutions, industry and consumer associations plus other stakeholders on implementation of the LEI. This could include comments on:

  • identifiers used by financial institutions for legal entities established in their jurisdiction or in foreign jurisdictions, and the extent to which they are mapped to the LEI;
  • awareness and adoption of the LEI in their jurisdiction, especially the existence or prospect of any market-driven or voluntary adoption of the LEI by market participants;
  • types of private sector uses of the LEI (e.g. to implement risk management frameworks, support financial integrity, reduce operational risks, or support higher quality and more accurate financial data) as well as the benefits measured or anticipated from such uses (including any quantification of the benefits, to the extent possible);
  • challenges and costs faced in acquiring and maintaining LEIs;
  • main obstacles faced by market participants to adoption and implementation of the LEI; and
  • ways to promote further adoption of the LEI, including specific areas where increased LEI uses would be the most favourable from a cost-benefit perspective.

Feedback should be submitted by September 21, 2018 to [email protected] under the subject heading “FSB Thematic Peer Review on Implementation of the LEI.”

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