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.
Related Links
Comment Due Date: June 30, 2021
Keywords: Europe, EU, Insurance, Solvency II, Data Collection, Reporting, LEI, Proportionality, FSB, EIOPA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Related Articles
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
