EIOPA Proposes to Revise Guidelines on Use of Legal Entity Identifier
EIOPA is consulting on the revised guidelines on the use of Legal Entity Identifier (LEI), with the comment period open until June 30, 2021. EIOPA will consider the feedback received, publish a final report on the consultation and submit the revised guidelines for adoption by its Board of Supervisors. As per the current text, the guidelines are expected to apply from January 01, 2022 and shall repeal and replace the existing guidelines on the use of LEI (EIOPA-BoS-14-026).
The focus of this consultation is on the scope (and its clarity) of entities that should have a Legal Entity Identifier. The suggested scope is broader than before. Apart from Institutions for Occupational Retirement Provision (IORPs) and insurance and reinsurance undertakings, the context of branches and intermediaries is introduced. The revised guidelines consider the need for a better and wider identification of groups of entities as well as third-country branches. The revised guidelines also cover the necessity to use LEI code for identification purposes when competent authorities report to EIOPA. Following the introduction of LEI in 2012, EIOPA had issued its own guidelines on the use of the LEI in October 2014. EIOPA is reviewing and revising the current guidelines due to the following reasons:
- The EIOPA strategy on data and digitalization, including aim to increase data standardization, and ongoing implementation of cross-cutting projects within EIOPA where data quality and assessment of interconnectedness is key
- Reflection of the principle of proportionality
- 2020 ESRB Recommendations on identifying legal entities that are focusing on the LEI as a common identifier
- 2019 FSB Thematic Review on Implementation of the LEI which listed some remaining obstacles which prevented wider LEI adoption.
The guidelines state that the competent authorities should require legal entities within the scope of Solvency II (Directive 2009/138/EC), among others, should have an LEI code. As part of its involvement in data standardization initiatives, with these revised guidelines, EIOPA would continue to support the adoption of the LEI system proposed by FSB and endorsed by G20, aimed at achieving a unique, worldwide identification of parties to financial transactions. The revised guidelines would continue to establish consistent, efficient, and effective supervisory practices by harmonizing the identification of legal entities to ensure high-quality, reliable, and comparable data.
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Comment Due Date: June 30, 2021
Keywords: Europe, EU, Insurance, Solvency II, Data Collection, Reporting, LEI, Proportionality, FSB, EIOPA
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