Journal of Securities Operations & Custody Volume 12 Number 1

The value of the for the participants of the securities industry Received (in revised form): 6th September, 2019 Gerard Hartsink Chairman, Board of Directors, Global Legal Entity Identifier Foundation

Gerard Hartsink has been appointed by children of a legal entity. Several mapping ser- the Financial Stability Board in June 2014 vices relevant for the securities industry are as the first chairman of the GLEIF Board of available. The FSB published in May 2019 its Directors. He serves as member of the World Peer Review Report with four sets of recommen- Trade Board that has as objective to enable dations to increase the number of issued LEIs. global trade with support of digital technol- The securities industry is an important segment ogies. He is active in organisations promoting of the private sector for the global LEI pro- e-commerce (member of the Digital Economy gramme. In this paper, market participants are Commission of the International Chamber of informed about the progress made in the imple- Gerard Hartsink Commerce [ICC]) and e-governance (mem- mentation of the LEI programme and on the ber of the Forum Standaardisatie of the Dutch way toward global adoption — by self-regulation government) and is Head of the Dutch dele- and/or regulation — for the benefit of investors gation of ISO TC 307 Blockchain and DLT. and issuers. He has broad experience in the payments, securities and forex industry. He has served Keywords: FSB, GLEIF, LEI ROC, ISO as Chairman of CLS Bank International, the 17442 LEI, ISO 9362 BIC, ISO ISIN European Payments Council and the RMG of 6166, ISO 20275 ELF ISO 20022 and as Board member of SWIFT, LCH.Clearnet Group, Euroclear Netherlands and the Euro Banking Association (EBA). As INTRODUCTION former Senior Executive Vice President of Large and small investors are increasingly ABN AMRO, he has over 30 years’ experi- investing in asset classes issued by private ence in sales, product development, regu- and public issuers of multiple jurisdictions. latory affairs, information management and Investors communicate with their banks or operations. brokers electronically with dematerialised (digitalised) instruments of their invest- AbstrAct ment portfolios. Private and public issuers The G20 initiated the Legal Entity Identi- of those instruments are, for corporate fier (LEI) programme and endorsed in 2012 governance and regulatory, strategic and the Financial Stability Board (FSB) recom- investor relations reasons, interested in Chairman, Board of Directors, mendations for the development of the global the owners of their issued instruments. Global Legal Entity Identifier LEI system to uniquely identify parties that Banks and brokers have a duty to inform Foundation, are engaged in financial transactions. The LEI and serve their issuers and their investors St. Alban-Vorstadt 5, 4002 Basel, Switzerland is based on the ISO 17442 LEI standard. The with high-quality securities services with E-mail: [email protected] LEI data is available free of charge for any user correct and transparent data. A growing Journal of Securities Operations of the public and private sectors on www.gleif. number of the investors are interested in & Custody Vol. 12, No. 1, pp. 29–40 org. GLEIF delivers also free-of-charge services the issuers of their instruments increasingly Henry Stewart Publications, about the direct and ultimate parent and/or from multiple jurisdictions. 1753-1802

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The trading (on exchange and off b. GLEIF, a Swiss not-for-profit foun- exchange), clearing and settlement func- dation,3 established in June 2014. The tions have a prominent role to ensure that GLEIF Board has 18 members from 16 the capital and money markets operate effi- jurisdictions and of multiple industries. ciently with a low operational risk profile. GLEIF cooperates with LEI issuers as All market participants should understand partner to realise its mandate. who is who, who owns whom and who owns what at any time of the day. An LEI is a high-quality identifier of The Heads of State and the govern- legal entities (based on the ISO 17442 ments of the Group of Twenty countries LEI standard4), inclusive of the reference called on the Financial Stability Board data of that legal entity. It is a 20-character (FSB) to take the lead for the appropri- alphanumeric code to uniquely identify ate framework, representing the public legally distinct entities that engage in interest, for a global Legal Entity Iden- financial transactions. tifier (LEI) to uniquely identify legally The public sector has multiple roles and distinct entities that engage in financial interests in identity management of mar- transactions, and endorsed at the 2012 ket participants in the capital and money Los Cabos Summit the FSB recommen- markets, such as issuer of public debt, dations for the development of the global promoter of regional integration of cap- LEI system (GLEIS) for parties to financial ital markets, supervisor and/or overseer transactions.1 of licensed firms, protector of the pub- In this paper, a report is given on the lic interest for money laundering and progress made by the LEI programme protector of consumer interests. See the and how all market participants of the published LEI ROC overview of the securities industry can benefit from the current regulatory uses of the LEI.5 programme. Market participants of the securities industry ‘from issuer to investor’ and all their service providers such as exchanges, central THE GLOBAL LEGAL ENTITY counterparties (CCPs), central securities IDENTIFIER SYSTEM depositories (CSDs), securities settlement The GLEIS has been designed as a broad systems (SSSs), trade repositories (TRs), rat- public good for the benefit of the users of ing agencies, data vendors, tech firms, etc. the public and private sectors. To realise will benefit from the adoption of the LEI in this G20 objective, the FSB established their business processes in order to deliver two organisations: and/or receive higher quality data of their counterparties in the securities process chain a. The LEI Regulatory Oversight Com- and/or lower their operational risks. mittee (LEI ROC)2 established in Jan- uary 2013 to oversee the worldwide framework of identification of legal Global Legal Entity Identifier entities. The LEI ROC has 71 members Foundation mandate and services and several observers from 50 coun- GLEIF has the mandate to deliver the LEI tries. Its main tasks are oversight of the data services for the benefit of the users of Global Legal Entity Identifier Foun- the private and public sectors. The founda- dation (GLEIF) and policy-making for tion delivers these services on its website6 legal entities for public purposes for the that is available in 14 languages of the G20. GLEIS. GLEIF operates by its statutes, agnostic

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to any particular commercial or political b. Monthly Data Quality Reports of each interest. LEI issuer GLEIF is responsible for three main functions to execute its tasks: d. Registers a. Overview of LEI issuers: LEI issuers a. Rulemaking functions: maintain the legal are accredited partners of GLEIF that and technical standards of the published signed the Master Agreement with Master Agreement7 with the LEI issuers GLEIF b. Operational functions: deliver — together b. GLEIF Registration Authorities list with the LEI issuers — the LEI and LEI with over 700 business and other reference data services and other services registers c. Monitoring functions: monitor the com- c. ELF (Entity Legal Form) Register pliance of the LEI issuers with the legal of the ISO 20275 ELF standard with and technical requirements of the Master over 2,300 legal forms (planned to Agreement be completed for all jurisdictions in December 2019) GLEIF delivers on www.gleif.org the following services in 14 languages of the G20 that are free of charge with registra- Global Legal Entity Identifier tion available for any user: Foundation mapping programmes8 GLEIF has established a free-of-charge a. Data of legal entities certification process to ensure that organi- a. Who is who: The Global LEI Index sations are able to map their own identifier makes the LEI and the LEI reference to the LEI with the use of state-of-the-art data of over 1.4 million legal entities of methodologies and/or processes to do so over 200 jurisdictions available. accurately. GLEIF cooperates with mar- b. Who owns whom: GLEIF delivers clar- ket participants of any industry and public ity on the direct and ultimate parent organisations (such as central banks) to and/or children of a legal entity with an develop mapping of their identifiers of LEI based on the International Finan- organisations (legal entities) or of the own- cial Reporting Standards (IFRS) or US ers of their object identifiers. Generally Accepted Accounting Princi- Market participants of the securities ples (GAAP) accounting standard. industry can benefit substantially from mapping the identifier of their customers to b. Tech support the LEI. Data vendors are already mapping a. Search options are available for export the LEI to their identifier and including the of data in various formats (Excel, CSV, LEI into their services, which is encour- XML, JSON) aged by GLEIF. The inclusion of the LEI b. Look-up API (application program- data in their services is possible on the con- ming interface) provides users direct dition that their customers are not charged access in real time to the Global LEI with additional fees for the LEI data because Index to perform on-demand checks the LEI data is a public good made free of for changes to specific LEI records. charge available to any user. GLEIF created a GLEIF Vendor Relationship Group9 c. Statistics with a charter and granted freedom to the a. LEI statistics with key facts of the global participants of this group to publish their LEI population brand name on the GLEIF website.

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a. Business Identifier Code (BIC)- REPORTS AND POLICIES OF THE to-LEI mapping: In February 2018, FINANCIAL STABILITY BOARD AND GLEIF and SWIFT (as the Registration LEI REGULATORY OVERSIGHT Author ity of the ISO 9362 Business COMMITTEE Identifier Code standard10) launched The LEI ROC has published so far two their cooperation for the mapping of progress reports. Its progress report of BIC-to-LEI files. As of end of June 30th April, 2018, gives a comprehen- 2019, there were about 21,000 mapped sive overview of use cases in which the identifier pairs available for users. The LEI ROC also communicated that ‘there remaining mappings will be delivered could be between 200 and 400 million of as soon as possible. eligible entities’ for an LEI.12 b. International Securities Identi- The FSB published on 28th May, 2019, fication Number (ISIN)-to-LEI its Peer Review Report on the implemen- mapping: In April 2019, GLEIF, the tation of the LEI, which expressed that it Association of National Numbering remains committed to a broader use of the Agencies (ANNA) as the Registration LEI globally.13 The FSB formulated the Authority of the ISO 6166 International following four sets of recommendations to Securities Identification Number stan- accomplish the G20’s objective of a broader dard launched the cooperation for the LEI adoption and included a reference to mapping of ISIN-to-LEI files. This initia- those recommendations in their FSB chair- tive has been created to help improve the man’s letter to the G20 leaders of 24th June, transparency of exposure by linking the 2019.14 The FSB chair remarks that ‘the issuer and its issued securities. By linking regulatory uses of the LEI are multiple and these two, ISO (International Organiza- the benefits can be substantial’ and also that tion for Standardization) standards users ‘the LEI has far to go to meet the G20’s will be able to aggregate the data to get objective of truly global LEI adoption’. a clear view of the data for the securities The four sets of FSB recommendations exposure with an issuer and its related (summarised here) include several refer- entities. Each ANNA member has to opt ences to the securities industry: in with ANNA for the mapping pro- gramme. By end-June 2019, ANNA pub- a. The FSB jurisdictions (the G20 juris- lished that 12 of their members had opted dictions plus Hong Kong, Singapore, the in, which have issued together about 3.2 Netherlands and Switzerland) should million ISIN numbers. This mapping ser- follow up on the relevant Committee on vice is also relevant for large and retail Payment and Market Infrastructures and investors that are keen to understand the the International Organization of Secu- data of the legal entity of their invest- rities Commissions (CPMI-IOSCO) ments having an ISO 6166 ISIN code. guidance for the use of the LEI for TRs, c. Market Identifier Codes (MIC)-to- should consider requiring the use by LEI mapping: GLEIF and SWIFT, as ‘infrastructures’ and should explore ways of the ISO 10383 to communicate on LEI benefits through Market Identifier Codes,11 are reviewing public outreach initiatives and, leading by the delivery of the mapping of the MIC- example, especially issuers of public debt. to-LEI standard at the latest in 2020. b. The FSB will work with standard- There are over 1,850 exchanges, trading setting bodies to facilitate the adoption platforms and trade reporting facilities of the LEI for all group entities and major in the MIC register. counterparties of global systemically

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important financial institutions, as well as The LEI ROC published on 5th July, 2019, for the clearing members of CCPs and a list of 103 regulatory uses as of the end of their ultimate parents. June 2019.16 c. The relevant standard-setting bodies (Basel Committee on Banking Super- vision [BCBS], CPMI, IOSCO) should IMPLEMENTATION OF THE LEGAL review and consider to embed or ENTITY IDENTIFIER PROGRAMME IN enhance references to the LEI uses in THE SECURITIES INDUSTRY their work. This could involve guidance The FSB concluded in its Peer Review on the inclusion of data on entities as well Report that notwithstanding the progress as promoting LEI use in securities trans- made by over 1.4 million entities uniquely actions and cross-border payments. identified by an LEI in more than 200 d. The LEI ROC and GLEIF should con- countries, the LEI has far to go to meet the sider enhancements of the business model G20’s objective.17 The FSB summarised to lower the costs and administrative bur- that to capture the positive externalities den for registrants, raise awareness of the and maximise the network effects for the LEI and encourage voluntary adoption, market, more efforts should be made to and enhance the scope and usability of promote LEI adoption and enhance the the relationship data (such as beneficial benefits to authorities and market partici- owners), including targeted LEI adoption pants from its use. campaigns for large multi-national firms. The LEI ROC chair persons published in February 2017 a paper ‘Collective actions: The LEI ROC published several public Toward solving a vexing problem to build policies for the GLEIS that have an impact a global infrastructure for financial infor- for the securities industry:15 mation’,18 with the following three key elements of the LEI programme’s success: a. Policy of 10th March, 2016, for the registration of relationship data of legal a. Top-level support in governments and entities where the IFRS and US GAAP industry accounting principles have been chosen b. Close collaboration between the public for the registration of ultimate parents, and the private sectors parents, children and ultimate children c. Mix of legal tools: ie ‘soft law’ and moral of legal entities in the GLEIS suasion, local regimes, domestic regula- b. Policy of 30th October, 2018, for the tion and private contracts registration of legal entity events (specific corporate actions) and of the data history The implementation of the LEI pro- in the GLEIS gramme will for any industry be a mixture c. Policy of 20th May, 2019, with the def- of regulation and self-regulation to realise initions of relationships for investment the benefits of the LEI programme for all funds and collective investment schemes participants of the securities industry and and the registration in the GLEIS other industries. In the securities industry, all market The FSB published in its Peer Review participants will need to review if the LEI Report of 28th May, 2019, a detailed over- has value for their own organisation. Will view, with 12 areas covered by published the implementation of the LEI programme rules and regulations (of which six of the result in less operational risks, less opera- securities industry), of the FSB jurisdictions. tional costs and better service and data for

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their customers? Industry associations tend securities financing transactions as to review also the impact for their function published in an overview of the LEI of the securities ecosystem but are mostly ROC. 20 With the collecting of LEI data reacting on public consultations of the pub- of market participants and other data of lic sector on the LEI for regulatory purposes. the securities that are traded or cleared The relevant industry associations have not or included in TRs, supervisors and yet developed a holistic view on how all overseers are able to assess the market market participants globally could bene- participants and the systemic risks in fit from the LEI programme in the interest the securities ecosystem involved. of the issuers and investors. Such a holistic d. Bank for International Settlements (BIS) view should cover the end-to-end ‘supply BCBS Guidelines on the sound manage- chain of securities’ from issuer to investor. ment of risks related to money launder- ing and financing of terrorism of June 2017 with a recommendation for the LEI Implementation actions for Legal for account opening and for correspon- Entity Identifier adoption by dent banking.21 The Wolfsberg Group the public sector responded to it by publishing their Cor- The public sector participants have multiple respondent Banking Due Diligence roles and requirements for the LEI in the Questionnaire, where the LEI is included securities ecosystems, including as market in Article 10 of their questionnaire.22 participant, such as issuer of government The International Securities Services bonds, and as supervisor or overseer. Association (ISSA) takes care of securi- ties transaction processes including the a. Issuer of government bonds. The FSB LEI in their Financial Crime Compli- recommends that the FSB jurisdic- ance Sample Questionnaire.23 tions’ issuers of public debt should lead e. Statistical research. Central banks and by example to use the LEI.19 The first securities regulators are using the LEI FSB jurisdictions started to do so, such as data also for research purposes. The De Staat der Nederlanden (Dutch State Committee on Monetary, Financial Treasury Agency), which issues Dutch and Balance of Payments Statistics has government bonds. Investors in these regular meetings with GLEIF and gives bonds have free-of-charge access to the valuable feedback for the use of the LEI data of the issuer. LEI for statistical purposes.24 b. Central Banks and their RTGS (Real f. Consumer protection. The LEI is Time Gross Settlement System), such as required for ‘issuers of securities to the the Bank of England, that made the LEI public or admitted on a regulated market mandatory for the participants of and for situated or operating within a EU mem- the messages to their new RTGS (such as ber state’.25 for the settlement of the LCH payment leg transactions). Central banks have In the FSB Peer Review Report, an also started to use the LEI (and ISIN) overview of strategies for the LEI imple- for the collateral they receive from their mentation per jurisdiction is presented with licensed firms and are very keen that the examples from the securities industry of ISIN-to-LEI mapping programme is FSB jurisdictions.26 completed as soon as possible. GLEIF has no mandate in its Stat- c. Legislation for regulatory reporting utes article 10 to influence legislation or purposes for derivatives, securities and rulemaking of the public sector. GLEIF is

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allowed to respond to public consultations a. Issuers of shares and corporate to promote the LEI and publishes all its bonds: The World Federation of responses on the GLEIF website.27 Exchanges (WFE)35 reports that there are 48,000 listed companies among the 250 WFE members. Many of the listed com- Implementation actions for Legal panies already have registered for an LEI Entity Identifier adoption by the for their listed legal entity and did also private sector register several of their subsidiaries. These The focus of GLEIF’s promotion of the listed companies,36 like Citigroup Inc. LEI is on four parts of the private sector in (United States), Nestlé S.A. (Switzerland), cooperation with relevant industry organ- Total SA (France) and A.P. Møller-Mærsk isations: (a) capital and money markets, (b) A/S (), also registered many of banking (trade finance, know your customer their subsidiaries because they see the [KYC] and on-boarding customers), (c) sup- value of the LEI programme for the ply chain with partners like GS128 and the business processes of their subsidiaries. International Chamber of Commerce,29 and b. Large Investors: Large investors appre- (d) digital economy (blockchain applica- ciate the LEI data that is free of charge tions, certification authorities using the LEI included in the services of the data ven- in their certificates with the Certification dor(s) they selected. Some large investors Authority/Browser Forum30 as partner, the have given the feedback that they import LEI in machine-readable annual reports in also the LEI data directly from GLEIF iXBRL format including the LEI and digi- for their business processes. In the FSB tal signatures like the GLEIF Annual Report Peer Review Report, it is reported that 2018;31 the iXBRL format was created in the LEI will ‘support transparency for the cooperation with XBRL International32). benefit of investors’.37 The GLEIF Board approved a research c. Investment Banks: Investment banks project with the support of a global man- are active in several roles in the capital and agement consulting firm in order to increase money markets. They are very interested the number of issued LEIs substantially in the LEI programme not only because (from current 1.4 million issued LEIs to of regulatory reporting requirements but 40 million issued LEIs) so that a network also because the LEI has value for their effect will be created in several industries. business processes with customers or with The research project is aligned with the FSB financial market infrastructures. GLEIF recommendation in that the LEI ROC and decided to create a GIFI Relationship GLEIF should ‘consider enhancements to Group to have a quarterly dialogue with the business model to lower the cost and the Global Systemically Important Banks administrative burden for entities acquir- (GSIBs) and Global Systemically Import- ing and maintaining an LEI’.33 One of ant Insurers (GSIIs) to understand the the challenges is to engage more small- or requirements for the GLEIF services.38 medium-sized enterprises (SMEs). The Large investment banks are not only act- research also takes into account the positive ive in the capital and money markets but experiences of the Asian Development Bank mention that the LEI is not only relevant regarding how the LEI enables Asian SMEs for their securities transactions but also to join supply chains and access credit.34 for their KYC duties, trade finance and In this paper, only some relevant cross-border payment business and for developments of market participants of their correspondent banking services. the securities industry are reported. They are connected to many Financial

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Market Infrastructures (FMIs). Inclusion and standards, an FMI should use, or of the LEI in the messages they receive at minimum, accommodate, relevant from their counterparties for all their internationally accepted communication business operations will facilitate their procedures and standards in order to liquidity, collateral and . facilitate efficient payments, clearing, set- d. Retail Investors: Retail investor asso- tlement and recording. Each FMI is rec- ciations, such as the European Investors’ ommended to review how the LEI could Association,39 appreciate the LEI pro- be included in their rule book and ser- gramme and the free-of-charge LEI data vices for the benefit of their customers for creating greater transparency for retail (of which some are connected to many investors. In addition, the Shareholder FMIs). GLEIF has approached all trade Rights Directive II, with obligations associations of the FMIs and offered to for European Union (EU) issuers (with create an FMI stakeholder group. an LEI) for the annual general meeting g. Securities Transactions: The FSB (AGM) processes and for the intermedi- recommended standard bodies such as aries to collect the votes of shareholders, IOSCO and CPMI to embed references has as objective to encourage also long- to the LEI in their work and to give term shareholders engagement of retail guidance on the inclusion of the LEI use investors in the EU.40 The LEI data of in securities transactions and cross-border the EU issuers (inclusive of the ISIN payments.44 The SWIFT community has number) is publicly available and will decided for a migration of the Message increase transparency of the investments Transfer (MT) payment messages to to consumers. ISO 20022 messages with a migration e. Exchanges: The majority of the deadline of ultimo 2024.45 Such a deci- exchanges are interested in the LEI pro- sion is not (yet) taken for the securities gramme, but GLEIF did not receive any messages (category 5 messages). The request so far to include the LEI for migration to ISO 20022 will support the use of their trading services. Some the inclusion of the LEI in the SWIFT exchanges are interested in the LEI for messages. It will support the SWIFT their data services, and some have also members to manage their operational decided to become an LEI issuer.41 risks for anti-money laundering (AML) f. Financial Market Infrastructures and combating the financing of terror- (CSDs, CCPs, SSSs, TRs): The FSB ism (CFT) more effectively. The Associ- Peer Review Report recommends that ation of Global Custodians has not yet FSB jurisdictions should consider the taken a position on the migration of the use and timely renewal of the LEI for SWIFT securities messages to ISO 20022 the identification of among more ‘infra- messages to be able to include the LEI.46 structures’.42 The FSB already clarified to the LEI ROC and GLEIF that the word ‘infrastructures’ means Financial Market CONCLUSION Infrastructures. Several FSB jurisdictions The G20 has taken the initiative to cre- started to legislate the use of the LEI for ate the GLEIS in the public interest for FMIs. The CPMI-IOSCO Principles of parties engaged in financial transactions Financial Market Infrastructures (PFMIs) and mandated the FSB to take the lead in of April 2012 are used by the overseers coordinating the work. The FSB established of FMIs.43 According to the PFMI Prin- the LEI ROC and the GLEIF to make the ciple 22 Communication procedures LEI programme a reality.

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The LEI data of legal entities is free of the ‘Charter of the regulatory oversight charge and registration available for any committee for the Global Legal Entity user of the public sector and of any industry Identifier (LEI) System’ of 5th November, of the private sector. 2012, available at: https://www.leiroc.org The securities industry is a promi- (accessed 15th June, 2019). nent industry for the use of the LEI for all (3) The GLEIF mandate, given by the Financial Stability Board, is described in securities transactions by all market partic- the ‘Statutes of the Global Legal Entity ipants. Since June 2014 many issuers have Identifier Foundation (GLEIF)’ of 7th already registered for an LEI and doing so August, 2018 (second version of the 2014 more and more also for business processes Statutes), available at: https://www.gleif. of their subsidiaries that are not traded on org/en/about/governance (accessed 15th exchanges. Investors (large and retail) have June, 2019). communicated to be very interested in the (4) The ISO 17442: 2012 Legal Entity value of the LEI and in the mapping of the Identifier (LEI) standard specifies the ISIN-to-LEI services of their investments. elements of an unambiguous legal entity The FSB Peer Review Report recom- identifier scheme to identify the legal mendations indicate what the next steps entities for any financial transaction. The the securities industry in the 24 FSB juris- ISO 17442 standard has been revised in 2019. ISO standards are available via dictions and the standard-setting public the ISO National Member. See more organisations, such as the BCBS and IOSCO, information at: https://www.iso.org/ that have a global reach, may expect. standard/59771. (accessed 29th The securities industry has a long his- September, 2019). tory of self-regulation and has the potential (5) An overview of regulatory uses of the LEI to do so for the implementation of the LEI was published on 5th July, 2019, available programme. This requires top-level support at: https://www.leiroc.org/lei/uses.html of all market participants. The inclusion (accessed 15th June, 2019). of the LEI in the business processes of the (6) GLEIF makes free-of-charge LEI data securities industry is a logical choice for the services available at: https://www.gleif.org/ future. The securities industry’s approach en (accessed 15th June, 2019). for the LEI implementation could become (7) The Master Agreement and its appendices define the contractual relation between that each FMI discloses if and when it the GLEIF and the LOU (LEI issuer) will comply with the LEI programme or based on Swiss private law. Available at: explain why it is not interested to do so. So https://www.gleif.org/en/about-lei/ far only the TRs have taken an active role gleif-accreditation-of-lei-issuers/required- in implementing the LEI as a follow up of documents (accessed 15th June, 2019). regulatory requirements. (8) GLEIF has a free-of-charge certification process for (public and pirvate) © Gerard Hartsink, 2019 organisations that want to map their identifier to the LEI. The mapped data could be published free of charge on references And notes www.gleif.org. The mapping programme (1) Point 44 of the G20 Leaders Declaration, is available at: https://www.gleif.org/en/ Los Cabos, Mexico, 19th June, 2012, lei-data/lei-mapping (accessed 15th June, available at: http://www.g20.utoronto. 2019). ca/2012/2012-0619-loscabos.html (9) GLEIF has establised several stakeholder (accessed 15th June, 2019). groups to facilitate a regular exchange of (2) The LEI ROC mandate, given by the information to specific market segments Financial Stability Board, is described in such as with vendors of data. An overview

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is available at: https://www.gleif.org/en/ (18) The ROC Chair Matt Reed’s (and others) lei-solutions/gleif-stakeholder-groups/ paper was published in the Office of gleif-vendor-relationship-group (accessed Financial Research Brief Series on 2nd 15th June, 2019). February, 2017, and is available at: https:// (10) ISO Technical Committee 68 maintains www.financialresearch.gov/briefs/files/ the ISO 9362 Business Identifier Standard. OFRbr_2017_01_LEI. (accessed 15th More information is available at: https:// June, 2019). www.iso9362.org (accessed 15th June, (19) See Recommendation 1c on p. 4 on 2019). https://www.fsb.org/2019/05/thematic- (11) ISO Technical Committee 68 maintains review-on-implementation-of-the-legal- the ISO 10838 Market Identifier Standard. entity-identifier (accessed 15th June, More information is available at: https:// 2019). www.iso20022.org/10383/iso-10383- (20) GLEIF publishes an overview of all market-identifier-codes (accessed 15th ‘regulatory use of the LEI’ and the status of June, 2019). the rule inclusive a link to documentation (12) The LEI ROC published a progress report of the issuer of the rule. The overview is ‘The Global LEI System and regulatory available at: https://www.leiroc.org/lei/ uses of the LEI’ on 30th April, 2018, uses.htm (accessed 15th June, 2019). available at: https://www.leiroc.org/ (21) See Annex 2: Correspondent banking publications/gls/roc_20180502-1.pdf and Annex 4: General guide to account (accessed 15th June, 2019). opening on https://www.bis.org/bcbs/ (13) The Financial Stability Board published on publ/d405.pdf (accessed 15th June, 28th May, 2019, its Peer Review Report 2019). ‘Thematic review on implementation of (22) See the Wolfsberg Group CBDDQ on the Legal Entity Identifier’. It is available at: http://www.wolfsberg-principles.com https://www.fsb.org/2019/05/thematic- (accessed 15th June, 2019). review-on-implementation-of-the-legal- (23) See the ISSA FCCSQ on http://www. entity-identifier (accessed 29th Spetember, issanet.org (accessed 15th June, 2019) 2019). (24) The Committee on Monetary, Financial (14) The Financial Stability Board Chair’s and Balance of Payments Statistics (CMFB) letter to the G20 leaders meeting in Osaka has meetings with GLEIF, and the CMFB was published on 25th June, 2019, and is members are users of the LEI data for available at: https://www.fsb.org/2019/06/ their statistical research. More information fsb-chairs-letter-to-g20-leaders-meeting- is available at: https://www.cmfb.org/ in-osaka/ (accessed 29th September, 2019). (accessed 15th June, 2019). (15) The LEI ROC published several policies (25) The European Securities and Market for the gloabl LEI system, such as its ‘final Authority (ESMA) published on 9th policy on fund relationships in the Global October, 2017, a briefing on the Legal LEI system’. All the LEI ROC policies Entity Identifier with reference to several are available at: https://www.leiroc.org/ EU regulations and directives. The briefing publications/gls/roc_20180502-1.pdf is available at: https://www.esma.europa. (accessed 15th June, 2019). eu/sites/default/files/library/esma70-145- (16) The LEI ROC’s updated list of regulator 238_lei_briefing_note.pdf (accessed 15th uses of the LEI as of end-June 2019 is June, 2019). available (also in Excel format) at: https:// (26) See Annex 3 of the FSB Thematic Review www.leiroc.org/lei/uses.htm (accessed on The Implementation of the Legal Entity 29th September, 2019). Identifier of 28th May 2019, available (17) See Executive Summary on p. 1 on at: https://www.fsb.org/2019/05/fsb- https://www.fsb.org/2019/05/thematic- publishes-peer-review-of-implementation- review-on-implementation-of-the-legal- of-the-legal-entity-identifier/ (accessed 9th entity-identifier (accessed 15th June, 2019). October, 2019).

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(27) GLEIF publishes all its responses on findings are publised in the blog ‘How consultations to public consultations with a Legal Enity Identifiers will transform small reference to the organisation of the public businesses’, available at: https://blogs.adb. consultation. All documentation is available org/blog/how-legal-entity-identifiers-will- at: https://www.gleif.org/en/about/ transform-small-business-asia (accessed consultation-responses (accessed 15th June, 29th September, 2019). 2019). (35) The World Federation of Exchanges is (28) GS1 it the global organisation that delivers the global association of exchanges and standards for the retail, healthcare, transport clearing houses. More information is and logistics sectors, including among available at: http://www.world-exchanges. more the barcode and the Global Location org (accessed 15th June, 2019). Number (GLN) code. More information (36) Since the end of July 2019, the following is available at: https://www.gs1.org/ LEI registrations have been available on (accessed 15th June, 2019). www.gleif.org: (29) ICC is a global business organisation of A. Citigroup Inc with 18 direct children about 45 million companies (of which the and 867 ultimate children majority are also exporters and importers) B. Nestlé S.A. with 70 direct children and in more that 100 countries. More 110 ultimate children information is available at: https://iccwbo. C. Total SA with 23 children and 128 org/ (accessed 15th June, 2019). ultimate children (30) The Certification Authority/Browser D. A.P. Møller-Mærsk A/S with 58 Forum is a global forum of certification children and 61 ultimate children authorities and browser companies. (37) See p. 28, point vii, of the FSB Thematic More information is available at: https:// Review on The Implementation of cabforum.org/ (accessed 15th June, 2019). the Legal Entity Identifier of 28th May (31) The GLEIF Annual Report 2018 has been 2019, available at: https://www.fsb. published in three formats: PDF, XBRL org/2019/05/fsb-publishes-peer-review- and iXBRL. See the iXBRL machine- of-implementation-of-the-legal-entity- readable report available at: https://www. identifier/ (accessed 9th October, 2019). gleif.org/en/newsroom/blog/gleif- (38) See the charter of the GLEIF GIFI pioneers-the-inclusion-of-leis-in-machine- Relationship Group on https://www.gleif. readable-financial-reports-to-enhance- org/en/lei-solutions/gleif-stakeholder- trust-through-identity-verification-and- groups/gleif-gifi-relationship-group easy-online-data-aggregation (accessed (accessed 15th June, 2019). 15th June, 2019). (39) The European Investors Association is (32) XBRL Iternational is the global an European association representing the organisation that provided the open data interest of (retail) investors in Europe. exchange standard for business reporting. More information is available at: https:// More information is available at: https:// european-investors.eu (accessed 15th June, www.xbrl.org/ (accessed 15th June, 2019). 2019). (33) See Recommendation 4 on p. 4 and (40) The Shareholder Rights Directive for the p. 5 of the FSB Thematic Review on European Union is available at: https:// The Implementation of the Legal Entity eur-lex.europa.eu/legal-content/EN/ Identifier of 28th May 2019, available TXT/?uri=CELEX%3A32017L0828 at: https://www.fsb.org/2019/05/fsb- (accessed 15th June, 2019). publishes-peer-review-of-implementation- (41) Some of the LEI issuers are a function of of-the-legal-entity-identifier/ (accessed 9th an exchange. The complete overview of October, 2019). LEI issuers is available at: https://www. (34) The Asian Development Banks (ADB) gleif.org/en/about-lei/get-an-lei-find-lei- tested the value of the LEI for SME issuing-organizations (accessed 15th June, exporters in Far East countries. The ADB 2019).

Page 39 The value of the Legal Entity Identifier for the securities industry

(42) See Recommendation 1b on p. 4 of able to include the LEI in the payment the FSB Thematic Review on The messages. This position is supported by Implementation of the Legal Entity the PMPG (Payment Market Practice Identifier of 28th May 2019, available Group) of SWIFT. The SMPG (Securities at: https://www.fsb.org/2019/05/fsb- Market Practice Group) did not take a publishes-peer-review-of-implementation- position for the Cat 5 securities messages of-the-legal-entity-identifier/ (accessed 9th so that the LEI could be included in October, 2019). ISO 20022 securities messages like (43) The Principles for Financial Market what will take place for payment Infrastructures of April 2012 are used by messages before 2015. More information overseers of FMIs of the securities industry on the LEI in payment messages is and available at: https://www.bis.org/ available at www.pmpg.info and for the cpmi/publ/d101a.pdf (accessed 15th June, migration to ISO 20022 messages at: 2019). https://www.swift.com/standards/iso- (44) See Recommendation 3 on p. 5 of the FSB 20022-migration-study/timeline (accessed Thematic Review on The Implementation 15th June, 2015). of the Legal Entity Identifier of 28th (46) The AGC is a group of the leading May 2019, available at: https://www.fsb. financial institutions that provide org/2019/05/fsb-publishes-peer-review- securities safekeeing services and of-implementation-of-the-legal-entity- asset servicing functions to primarily identifier/ (accessed 9th October, 2019). institutional cross-border investors world- (45) SWIFT has decided to migrate the Cat 1, wide. More information is available at: Cat 2 and Cat 9 payment messages to http://www.theagc.com/ (accessed 15th ISO 20022 messages among more to be June, 2019).

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