May 28, 2019

FSB published a report on thematic review on implementation of the Legal Entity Identifier (LEI). The review reveals that LEI coverage is too low outside the securities and derivatives markets and adoption remains uneven, with coverage concentrated in Canada, EU, and the United States. The report sets out four sets of recommendations to address the issues identified in the peer review and promote broader LEI adoption.

The report provides background on LEI, including its governance and key features. It also describes the approaches and strategies of FSB members in implementing the LEI, including regulatory and non-regulatory tools and areas of coverage. The report then examines LEI coverage in areas relevant for financial stability, describing the evolution of LEI issuance over time and the current rates of issuance by jurisdiction and across sectors. Finally, it highlights achievements and challenges in further advancing LEI adoption and identifies possible ways to address the challenges in advancing LEI adoption. The report notes that LEI has far to go to meet the objective of G20. The coverage of LEI is too low outside securities and derivatives markets to effectively support new industry or regulatory uses, or to reach a tipping point where voluntary take-up by market participants would suffice to propel further adoption. Additionally, LEI adoption remains uneven across jurisdictions, with coverage concentrated in Canada, EU, and the United States. 

FSB remains committed to a broader use of the LEI globally to meet the G20 objective. To accomplish this, and in light of the findings, the report details the following four sets of recommendations:

  • FSB jurisdictions should follow-up on CPMI-IOSCO guidance that strongly encourages authorities to require the use of the LEIs for identification of legal entities in the data reported to trade repositories, for the over-the-counter (OTC) derivatives. FSB jurisdictions should consider requiring the use and timely renewal of the LEI in reporting or disclosure frameworks. They should also explore ways to promote further LEI adoption.
  • FSB will explore the potential role of the LEI in its work—for instance, in the resolution of financial institutions and on financial innovation issues. FSB will also work with standard-setting and industry bodies to facilitate adoption of the LEI for all group entities and major counterparties of global systemically important financial institutions as well as for the clearing members of central counterparties (CCPs) and their ultimate parents. 
  • The relevant standard-setting bodies (BCBS, CPMI, IAIS, IOSCO) and international organizations (IMF, OECD, World Bank) should review and consider ways to embed or enhance references to the LEI in their work, to facilitate the implementation of relevant LEI uses for authorities and market participants. 
  • LEI ROC and GLEIF should consider enhancements to the LEI business model to lower the cost and administrative burden for entities acquiring and maintaining a LEI. LEI ROC and GLEIF should also consider data quality process enhancements to increase the reliability of the LEI data to improve its usability by market participants and regulators, including processes to encourage and monitor updates of LEI reference data. These authorities are also recommended to enhance the scope and usability of Level 2 (relationship) data by considering cost-effective and reliable ways to add relationship data and by expanding the coverage of such data.

 

Related Links

Keywords: International, Banking, Insurance, Securities, PMI, LEI, G20, Peer Review, FSB

Related Articles
News

EBA Consults on Guidelines for Loan Origination and Monitoring in EU

EBA launched a consultation on the guidelines on loan origination and monitoring in EU.

June 19, 2019 WebPage Regulatory News
News

OCC Bulletin on Risk Management Guidance for Home Mortgage Lending

OCC published Bulletin 2019-28 on risk management guidance for higher-loan-to-value (LTV) lending activities in communities targeted for revitalization.

June 19, 2019 WebPage Regulatory News
News

IFRS to Discuss Phase II of IBOR Reform at July Meeting of ASAF

IFRS published agenda papers for the Accounting Standards Advisory Forum (ASAF) meeting to be held on July 11–12, 2019.

June 19, 2019 WebPage Regulatory News
News

EC Amends Regulation Supplementing Solvency II Directive

EC published the Delegated Regulation (EU) 2019/981 that amends the Regulation (EU) 2015/35, which supplements Solvency II Directive (2009/138/EC) on the taking-up and pursuit of the business of insurance and reinsurance.

June 18, 2019 WebPage Regulatory News
News

IOSCO Report Examines Application of International Cyber Standards

IOSCO published a final report that examines the application of the three internationally recognized cyber standards and frameworks by IOSCO member jurisdictions.

June 18, 2019 WebPage Regulatory News
News

PRA Launches 2019 Stress Test Exercise for Life and General Insurers

PRA has launched the biennial insurance stress test and is asking the largest regulated life and general insurers to provide information about the impact of a range of stress tests on their business.

June 18, 2019 WebPage Regulatory News

SRB Outlines Upcoming Changes in Context of CRR2 and BRRD2

SRB published presentations made at the 8th Industry Dialogue in Brussels.

June 18, 2019 WebPage Regulatory News
News

EC Publishes Guidelines on Climate-Related Information Reporting

EC published the guidelines and associated frequently asked questions (FAQs) on corporate climate-related information reporting, as part of its sustainable finance action plan.

June 18, 2019 WebPage Regulatory News
News

PRA Finalizes Reporting Amendments to Pillar 2 Liquidity Framework

PRA published the final Policy Statement PS13/19 on regulatory reporting amendments and clarifications to the Pillar 2 liquidity framework for banks in UK.

June 17, 2019 WebPage Regulatory News
News

FSB Assesses Implementation of Compensation Standards and Principles

FSB published the sixth progress report on the implementation of its principles and standards for sound compensation practices in financial institutions.

June 17, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3276