ESRB Recommends Framework for Identification of Legal Entities in EU
ESRB published a recommendation regarding identification of legal entities (ESRB/2020/12). The recommendation seeks the introduction of an EU legal framework to uniquely identify legal entities engaged in financial transactions by legal entity identifiers (LEIs) and to make the use of the LEI more systematic in respect of supervisory reporting and public disclosure. Taking into account the timeframe for the adoption of such a framework, ESRB recommends that relevant authorities pursue and systematize their efforts to promote the adoption and use of the LEI by making use of the various regulatory or supervisory powers that they have been granted by national or EU law.
The recommendation is intended to contribute to the prevention and mitigation of systemic risks to financial stability through the establishment of systematic use of the LEI by entities engaged in financial transactions. Toward the introduction of a framework on the use of the legal entity identifier, EC is recommended to propose that EU legislation:
- Incorporate a common Union legal framework governing the identification of legal entities established in the Union that are involved in financial transactions by way of a LEI, paying due regard to the principle of proportionality
- Impose an obligation on legal entities to report financial information include the obligation to identify by way of an LEI the legal entity subject to the reporting obligation and any other legal entity about which information must be reported and which has an LEI.
- Incorporate an obligation on authorities to identify by way of its LEI any legal entity about which they publicly disclose information and which has an LEI, paying due regard to the principle of proportionality
For the use of LEI until the possible introduction of EU legislation, the recommendation is for the relevant authorities to:
- Require or, where applicable, continue to require, all legal entities involved in financial transactions under their supervisory remit to have an LEI
- Continue to include, an obligation (when drafting, imposing, or amending financial reporting obligations, or where applicable) to identify by way of a LEI the legal entity subject to the reporting obligation and any other legal entity about which information must be reported and which has an LEI
- Identify or, where applicable, continue to identify, by way of its LEI, any legal entity about which they publicly disclose information and which has an LEI
Related Link: Recommendation (PDF)
Keywords: Europe, EU, Banking, Insurance, Securities, PMI, LEI, Legal Framework, Reporting Disclosure, Systemic Risk, ESRB
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
Previous ArticleHM Treasury Updates Statutory Instruments Under EU Withdrawal Act
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.
DNB Publishes Multiple Reporting Updates for Banks
DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.
NBB Sets Out Climate Risk Expectations, Issues Reporting Updates
The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting
EBA Updates Address Securitization Standards and DGS Guidelines
The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.
FSB Publishes Letter to G20, Sets Out Work Priorities for 2023
The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023