The Global Legal Entity Identitifier (LEI) index can now be considered a success with over one million registrations under its belt. Still in its early days of formation, the initiative has thus far taken a large step towards attaining its primary objective, with the Global Legal Entity Identifier Foundation (GLEIF) - the LEI ‘overlords’ playing a key role in it’s success.
As with any overarching regulation, early fears of disruption were put to bed once the January deadline rolled around and Banks and Brokers were granted an extra 6 moths to become compliant with the MifiD II regulation and possibly the industry’s biggest game changer in the last ten years.
The Financial Times reported that as many as 20% of banks clients had still not registered a few days before the deadline. As expected, this was the result of a long global queue to obtain the license, and a deadline day crush that was certainly felt by us here at Global LEI as we did our part to assist in the allocation of LEI’s to legal entities in over twenty five countries as we entered 2018.
However, the pragmatism, and sensibility shown by European Securities and Markets Authority (ESMA) in extending the LEI deadline for the regulation was welcomed by those who feared a “No LEI, No Trade” ruling. At this point in time, it is difficult to estimate how many entities are still to register, and whether or not there will be another high pressure lead in to July, 2018.
With roughly 1,002,900 legal entities currently registered, investors are finding solace in the extra security and transparency this comes with this welcome change. With markets now more competitive and legitimate legal data available at the touch of a keypad, it is easier to see who is owned by whom, and where they doing the owning from.
It is incremental that everybody buys into this. In order for the LEI to achieve its aim and manifest the benefits stated above, the rule must be adhered to as its success is completely dependent on the network of universal adoption. Thus, deadlines and penalties are necessary.
It is unclear what the ramifications for non-compliance will be, exactly, and whether or not they will be enforced. The common phrase being bandied about is “No LEI No Trade”, but it still remains to be seen whether the relevant authorities will cut off their nose to spite their face, and risk slowing down large arteries of international trade and finance, should non-compliancy be an genuine issue. Do not be the one to find out!
As it stands, January 2018 is the perfect time get your clients registered. You can avail of a 10% discount if you wish to make a bulk registration with Global LEI by clicking on the link below:
Global LEI Bulk Upload Form
For more information, or any other questions regarding LEI registration, please contact firstname.lastname@example.org.
The views expressed in this blog belong to LEI Worldwide.