June 07, 2019

GLEIF published the monthly Global Legal Entity Identifier (LEI) data quality report for June 2019, which analyzes the overall data quality in the Global LEI System. Additionally, GLEIF published the latest quarterly Global LEI System Business Report, which highlights main trends relevant to the adoption of LEI and provides in-depth analysis of the LEI data pool. The report analyzes developments observed in the first quarter of 2019.

  • The information to be provided by a third party seeking authorization to assess the compliance of securitizations with the STS criteria provided for in Securitization Regulation should enable a competent authority to evaluate whether and, to what extent, the applicant meets the conditions of Article 28(1) of the Securitization Regulation. An authorized third party will be able to provide STS assessment services across EU. The application for authorization should, therefore, comprehensively identify that third party, any group to which this third party belongs, and the scope of its activities. With regard to the STS assessment services to be provided, the application should include the envisaged scope of the services to be provided as well as their geographical scope, particularly the following:

    • To facilitate effective use of the authorization resources of a competent authority, each application for authorization should include a table clearly identifying each submitted document and its relevance to the conditions that must be met for authorization.
    • To enable the competent authority to assess whether the fees charged by the third party are non-discriminatory and are sufficient and appropriate to cover the costs for the provision of the STS assessment services, as required by Article 28(1)(a) of Securitization Regulation, the third party should provide comprehensive information on pricing policies, pricing criteria, fee structures, and fee schedules.
    • To enable the competent authority to assess whether the third party is able to ensure the integrity and independence of the STS assessment process, that third party should provide information on the structure of those internal controls. Furthermore, the third party should provide comprehensive information on the composition of the management body and on the qualifications and repute of each of its members.
    • To enable the competent authority to assess whether the third party has sufficient operational safeguards and internal processes to assess STS compliance, the third party should provide information on its procedures relating to the required qualification of its staff. The third party should also demonstrate that its STS assessment methodology is sensitive to the type of securitization and that specifies separate procedures and safeguards for asset-backed commercial paper (ABCP) transactions/programs and non-ABCP securitizations.

    The use of outsourcing arrangements and a reliance on the use of external experts can raise concerns about the robustness of operational safeguards and internal processes. The application should, therefore, contain specific information about the nature and scope of any such outsourcing arrangements or use of external experts as well as the third party's governance over those arrangements. Regulation (EU) 2019/885 is based on the draft regulatory technical standards submitted by ESMA to EC.

     

    Related Links

    Effective Date: June 18, 2019

    Press Release
  • Proposed Rule 1
  • Proposed Rule 2
  • Proposed Rule 3
  • Presentation on Regulatory Framework (PDF)
  • Presentation on Resolution Plan Rules (PDF)
  • Global LEI data quality report. The report for this month highlights that the assessment performed on May 31, 2019 shows that 24 out of the total of 33 LEI issuers (72%) achieve the required data quality. Five LEI issuers (15%) demonstrate excellent data quality. Overall performance improved, in particular, with regard to the quality criteria "provenance" and "consistency." The Total Data Quality Score remains stable above 99%. 

    Global LEI system business report. The report assesses annual growth and renewal expectations, evaluates the level of competition among the LEI-issuing organizations operating in the Global LEI System, and analyzes LEI renewal rates and reference data corroboration. Since July 2017, as part of this report, GLEIF also delivers statistics on direct and ultimate parent information provided by legal entities. At the end of the first quarter of 2019, the total LEI population neared 1.36 million. Approximately 53,000 LEIs were issued in the first quarter of 2019 compared to approximately 55,000 in the fourth quarter of 2018. This represents a quarterly growth rate of 4.1% in the first quarter (previous quarter: 4.4%). The report identifies the least and most competitive markets of those with more than 1,000 LEIs, based on the number of LEI issuers providing services in the jurisdiction. In the first quarter of 2019, Italy, Netherlands, Spain, Finland, and Czech Republic were the five least competitive markets in descending order. Romania, Lithuania, Portugal, Malta, and Bulgaria were the five most competitive markets in descending order. Additionally, during the reporting period, the highest renewal rates were demonstrated by India (95.5%), Finland (93.5%), Japan (91.9%), Liechtenstein (91.1%), and Norway (85.7%). Brazil (54.9%), the United States (53.9%), South Africa (48.3%), the United Kingdom (46.6%), and the Russian Federation (46.3%) were the top five jurisdictions demonstrating the highest non-renewal rates.

     

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    Keywords: International, Banking, Securities, GLEIS, Data Quality, Reporting, LEI, GLEIF

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