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.
Adam Koursaris
Asset and liability management expert; capable modeler; risk and capital specialist
Related Articles
APRA Sets LAC for D-SIBs, Proposes to Enhance Crisis Preparedness
APRA issued a letter on the loss-absorbing capacity (LAC) requirements for domestic systemically important banks (D-SIBs) and published a discussion paper, along with the proposed the prudential standards on financial contingency planning (CPS 190) and resolution planning (CPS 900).
EC to Review Macro-Prudential Rules while ESRB Assesses Policy Stance
The European Commission (EC) launched a call for evidence, until March 18, 2022, as part of a comprehensive review of the macro-prudential rules for the banking sector under the Capital Requirements Regulation (CRR) and Directive (CRD IV).
FSB Sets Out Good Practices for Crisis Management Groups
The Financial Stability Board (FSB) published a report that sets out good practices for crisis management groups.
APRA Penalizes Heritage Bank for Incorrect Reporting of Capital
The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.
OSFI Releases Annual Report 2021-2022
The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.
OSFI Updates Timeline for Implementation of Certain Basel Rules
Through a letter addressed to the banking sector entities, the Office of the Superintendent of Financial Institutions (OSFI) announced deferral of the domestic implementation of the final Basel III reforms from the first to the second quarter of 2023.
EC Defers Adoption of Regulatory Standards for Disclosures Under SFDR
EIOPA recently published a letter in which EC is informing the European Parliament and Council that it could not adopt the set of draft regulatory technical standards for disclosures under the Sustainable Finance Disclosure Regulation (SFDR) within the stipulated three-month period, given their length and technical detail.
FCA Releases MIFIDPRU Application Forms and Third Set of Rules on IFPR
The Financial Conduct Authority (FCA) published the third in a series of policy statements that set out rules to introduce the UK Investment Firm Prudential Regime (IFPR), which will take effect on January 01, 2022.
APRA Finalizes Capital Adequacy Standards for Banks
The Australian Prudential Regulation Authority (APRA) published, along with a summary of its response to the consultation feedback, an information paper that summarizes the finalized capital framework that is in line with the internationally agreed Basel III requirements for banks.
CPMI-IOSCO Seek Comments on Access to Central Clearing and Portability
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a consultative report focusing on access to central counterparty (CCP) clearing and client-position portability.
