In another step towards standardised global regulation, the ASIC (The Australian Securities and Investments Commission) extended its April deadline to September 30th 2019.
The deadline is aimed at financial service entities registered in Australia, pre-dominantly SMSF (Self Managed Superannuation Funds) traders and trustees, but can include other entities within the financial services realm.
Initially, the deadline was set for April 1st 2019, but this was later extended by ASIC. It has been stated that it is highly unlikely that the upcoming deadline set for October 1st will be extended again.
This is a right step in the direction of having one global standardised identifier. This will facilitate cross-border investing and trading and increased transparency across international markets.
The LEI has been a preferred identifier of ASIC since 2013 when they first introduced the ASIC Derivative Transaction (Reporting) Rules. In the rules it is mandated that counterparties to OTC derivatives are recognised by way of an LEI identifier.
Now, Australia follows in the footsteps of many other countries adopting a similar hard line and broader approach to the use of the LEI as its benefits become more apparent as the concept matures.
In the future, all businesses who trade internationally will move towards the LEI as it provides a centralised, reliable source of data improving not just security, but also speeding up current techniques of KYC and client onboarding.
What is an LEI?
An LEI is 20 digit alpha numerical code unique to each company that is registered on the global LEI database. The LEI listing will contain basic company information such as the registered address, and affiliations with other businesses such as parent companies or subsidiaries or branches.
How do I get an LEI quickly?
It is easy to apply for an LEI code if you have not already got one. Simply head to our registration page and fill in the LEI registration form. Contact firstname.lastname@example.org for any questions.
How much does an LEI Code cost?
There are a number of different pricing options. A new LEI for one year is €89, but if you subscribe to automatic renewals it is just €75 per annum.
What happens if I miss the ASIC October 1st deadline?
As soon as you receive your LEI you should contact your Trade Repository to inform them. Corporate clients who have not provided an LEI to their brokers before 1st October may no longer be able to trade with them.
Click here to Register an LEI
LEI Worldwide partners with RapidLEI to support the Financial Services Industry in the upcoming demand for Legal Entity Identifiers (LEIs)
If you are in the industry or have been following recent developments, you will know that it is being mandated in Australia and Hong Kong that Over The Counter Derivative transactions will soon need to be completed by including the use of an LEI. This comes into effect on October 1st, 2019 and as we have seen with previous deadlines, a sharp increase in the numbers of Legal Entity Identifiers is to be expected.
According to the Hong Kong Monetary Authority (HKMA), and the Securities and Futures Commission (SFC), reporting entities will have to produce an LEI in the recording of new transactions and daily valuations.
Reporting entities are expected to have a system in place by which they request LEIs from their clients. This means a large number of applications will be made, once again, at the eleventh hour.
In Australia, LEIs are not only requested, but will be required in order to identify counterparties that are legal entities within their ASIC transaction reports. Derivative Transaction Reporting exemptions in Australia will also require an LEI Code.
These changes were originally scheduled for April 2019, but the deadline has been extended to October 1st, on the condition that reasonable efforts be made to obtain the LEI in the interim.
As a Global Registration Agent, LEI Worldwide aims to support financial institutions in these regions, which is why we have partnered with RapidLEI. Using the RapidLEI automated platform, and through our strong relationship with the team, we can now deliver LEIs to our clients faster, and more cost effectively than ever.
To obtain an LEI for your organisation, client, or if you are responsible for obtaining Legal Entity Identifiers please contact our team of experienced professionals now at email@example.com
Need an LEI in a hurry?
Compliance can be tricky in todays financial ecosystem. There is a lot of boxes to be ticked, lines to be crossed and things can often get left to the last minute. At LEI Worldwide, we understand that. We understand the pressure companies are placed under to acquire LEI numbers in a hurry. That is why we are here. We have helped hundreds of individual firms, security traders, asset managers, law firms and investment brokers obtain LEIs on behalf of their clients, pretty much instantly.
Our experience and knowledge of the LEI system allows us to expedite LEI applications. Our system is powered by Rapid LEI, to streamline imports and new LEI applications on behalf of our clients. This means no more waiting hours or days for your LEIs to be published.
However, as quick as we would like to be, data quality is paramount to the success of the LEI. All data must be verified before being published to the global LEI index. This can sometimes cause delays.
So, if your team require LEIs urgently due to looming deadlines, below is a list of the 5 main things to look out for so you can avoid and prepare for delays.
1. Data Verification
Have a legal document ready in case requested, such as a Certificate of Incorporation / proof of address (in the rare case that the entity cannot be found on a public registry).
LEIs should be applied for on behalf of a director / CEO, so please be aware that you may be asked to provide authorisation by way of a 'Letter of Authorisation'. Just contact firstname.lastname@example.org for the template to save time and have it ready in advance.
3. Fast track
Use the Fast Track service. As we operate on a queue basis, 'Fast Track' ensures your application will be prioritised by our team. Just check the appropriate box on the transaction page.
4. Business Hours
Applying on weekends or outside business hours - expect delays. Despite the modern advancements in automation systems, LEI applications still need to have the data checked by an actual real life human before being published.
5. Be available!
Mistakes happen.. If you have input incorrect data in your application we may contact you to correct it. We may not be able to issue the LEI without hearing from you - so leave your best email address in the contact box!
This means manually confirming the data is accurate by cross checking with existing public records. We work on weekends, but not everybody does, so you may encounter set backs on Saturdays or Sundays. Try applying early on a Monday morning for instant replies (the team will thank me for that).
Other than that, LEIs are generally generated instantly.
Please get in touch if you have anything to add, have questions or comments. Feel free to share these tips with your team if you think they might find it helpful when applying for an LEI Code.
Contact sales for advice, which includes information about multi-year applications, or if you are ordering in bulk claim a discount email@example.com.
LEI Worldwide Support Team
That is the number of LEI’s that are now in existence. We are now well on our way to seeing the LEI become the most recognized and primary identifier for all legal entities, above all other security checks.
Previously the ISIN & CUSIP were the main ISO identifiers, and recently the Association of National Numbering Agencies (ANNA) have agreed to match ISIN’s to LEI’s which is a huge step forward towards mapping out the global financial system in real time and wider acceptance of the LEI, it’s more than just one foot in the door.
According to ANNA, the regulatory body for ISINs, “The new, global initiative will map new and legacy ISINs to their corresponding LEIs. By linking the two ISO standards together, firms will be able to aggregate the data required to gain a clear view of their securities exposure within a given issuer and its related entities. Once implemented, the ISIN-to-LEI mapping table will be made freely available to all without restriction”.
You can find out more about the mapping of ISINs and LEIs here.
The LEI is so important because the financial crisis exposed a number of critical faults in the global financial and banking systems. One of the faults exposed was the issue of identifying the huge number of funds, bonds, subsidiaries etc, and nobody could tell who owned who, and what resulted was a cataclysmic mess. This is why we have such faith in the LEI becoming the single identifier of all legal entities. One centralized source of information, that contains vast amounts of easily accessible, and high quality data which can prevent this from ever happening again.
Although the LEI has had a good start, I would be lying if I said that were no more challenges to overcome and milestones to reach before this digital transformation and its potential uses are fully realized. Primarily I am speaking of the slow rates of LEI renewals. Currently, 25% of all LEI’s are marked as ‘Lapsed’. Renewals are so important to the function of the LEI because it is imperative that the data remain up-to date and current. This needs to improve.
Secondly - trust. Still largely in its infancy, the LEI has potential to become recognized as the primary global identifier for all organisations, however time will be a key factor in fostering an attitude of trust towards the LEI. Trust, that it is an accurate, airtight system and does in fact contain important, meaningful and consistently accurate data. Data that is easily accessible, current, in real-time and is an important building block of the future of FinTech.
LEI adoption rates are still relatively low to what it can be. For example, China, the worlds second largest economy currently only has 2,300 LEI’s issued. Similarly, Brazil, Russia and India are huge economies that are yet to drive forward their LEI adoption rates. This indicates that there is still a long way to go to get to universal adherence to the system outside the European Union, even in the larger emerging economies worldwide. *rolls sleeves up*
The top 5 countries by number of registered LEI’s account for a disproportionate 46.7% of the worlds LEI’s.
*LEI Ownership Statistics
It is becoming more frequent for the LEI to be mandated by regulatory bodies especially in the US, which is also serving to drive up the LEI adoption rate. For example, 3 weeks ago, the US Treasury adopted new rules with regard to the Repurchasing market that require Central Counter Parties to report LEI codes. This further solidifies its adoption as a critical component of market infrastructure.
Currently, there are on average 4,000 LEI’s being issued per week. This has fluctuated since the beginning of 2019, with the peaks and troughs in the diagram below largely caused by legislation effecting LEI issuance.
*Weekly LEI registration rates
However, companies, that are not legally requiring the LEI are also transitioning due to it’s multiple advantages including enabling financial institutions to readily meet the requisite standards of KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance requirements. The LEI can also be used to clarify ownership structures and identities in large organisations and corporations. The analytical advantage gained by way of the LEI is truly signifigant.
It is the mission of LEI Worldwide to facilitate this global mass adoption to the Legal Entity Identifier, by making them as accessible as possible to entities all over the world.
To do a quick review of the year passed, the total number of LEI’s jumped 36% in 2018, and now stands at an impressive 1,361,624 in February 2019.
After ESMA granted a six-month extension to Europe’s trading firms prior to the introduction of MiFID II’s “No LEI, No Trade” regime last January, the 1 million LEI milestone was reached and another deadline scramble took place 6 months later further increasing the demand for LEI’s.
Throughout the year, there have been regular uplifts to the LEI adoption rate. Don’t hold your breath as I run through the main headlines… We welcomed some new LOU’s (Local Operating Units) on the scene including RapidLEI, GS1, and APJES of Slovenia. In June, international interest was stimulated as the Bank of England Chairman, Mark Carney described the LEI as “the best corporate identifier”, it was announced that LEIs will be mandatory when reporting OTC derivative transactions in Australia from April 2019 onwards, and in December a bill was passed in Wyoming, USA that new blockchain based banks will be using the LEI as the main identifier... Hurray!
The LEI adoption rate is good, however, the LEI market is dominated by a smaller number of large LEI issuing companies (LOU's). The top five organisations that issue LEIs have been fairly consistent in their performance for a long time now, but one new LOU in particular is making great headway in catching up, RapidLEI of Finland. The GMEI Utility remains far ahead of everybody with over 420,000 LEI’s issued, followed by The London Stock Exchange with around one third of that!
Over the past few weeks of 2019 there has been an average of 3,000 LEI’s issued per week with the lions share going to the GMEI Utility. The main concern at the moment is the rate at which entities are becoming lapsed. We are now looking at nearly 340,000 lapsed LEI’s. That’s near 25% of total LEI’s. LEI Worldwide are currently taking initiative to help resolve this and renew as many lapsed LEI’s as possible. If you have an LEI and you are not sure if it should or when it should be renewed, please contact us at firstname.lastname@example.org or complete a “Quick Renewal” here.
LEI Worldwide expect the LEI market share to level out over the coming months and years. As the market evolves and matures data quality and verification accuracy will become more important than sheer speed and volume, and some issuers will adapt better than others.
Positivity surrounding the potential use cases of the LEI is being explored such as determining how LEI's can be the primary accepted identity in all digital certifications and in Public Key Infrastructure (PKI). We can see already that steps have been taken to make it the primary identifier. Previously the ISIN & CUSIP were in the main ISO identifiers, and now Association of National Numbering Agencies (ANNA) have agreed to match ISIN’s to LEI’s which is a huge step forward towards mapping out the global financial system in real time.
This would provide market participants with a clear picture of their counterparty risk and simultaneously provide regulators with a quality of ownership data that has not been available before, and will conceivably prevent another relapse of the confusion and uncertainty we saw in 2008 with the collapse of the global markets which spurred this initiative in the first place.
Since the dawning of the Blockchain era in recent years, many use cases for the disruptive technology have been considered, some revolutionary and some not so much. It is clear however, that some industries can hugely benefit from the technology, which has it roots in cryptocurrencies such as Bitcoin. For example the introduction of smart contracts, distributed storage and data protection are proving to be invaluable use cases to companies in the global financial industry and beyond.
According to Investopedia, a blockchain is a digitized, decentralized ledger. Immutable by nature, and incorruptable, it was valued as an means of accounting for previously easily hacked digital assets.
Recently, a published an article stated "Integrating the LEI into other entity verification methods, including solutions based on digital certificates and blockchain technology, will allow anyone to easily connect all records associated with an organization, and identify who owns whom. By becoming the common link, the LEI will provide certainty of identity in any online interaction, making it easier for everyone to participate in the global digital marketplace." Anyone who is familiar with the technology will know that this is not merely a buzzword, but in fact a potentially applicable use case for the LEI in coming years, and it is one that has echoed around the community for a while now with a vision to making the LEI more efficient.
That being said, potential cases for the Blockchain to be incorporated in the LEI system globally are merely speculative at this stage, but nevertheless an interesting topic worth exploring. For example, there are several sources currently within which LEI data is stored. When an entity is registered with an LOU, there is often a short waiting period before it appears on various search tools online. Given that the very nature of the LEI is that it is a digital product, all of the data is stored online between separate entities, and the information may not match at times, and may be inconsistent across search tools. It may be the case that all data can now become decentralised by way of a Blockchain, and any changes made on one system will auto correct on the others in real time.
By uploading new registrations to a Blockchain, Local Operating Units can rest in the knowledge that reconcilement would be agreed between all participants. Any further updates to LE-RD (Legal Entity Reference Data) would have to be fully corroborated by all participants before validation was permitted. This would result in increased efficiency, congruency and speed, from which the consumer of the LEI would benefit, such as Banks, Investors and the regulators themselves.
This use case is merely an initial introduction into one of the more obvious applications, however this may never occur, or if it does it may take an entirely different approach.
If you are familiar with this topic, and would like to share your ideas, please feel free to like, share, leave a comment or get in touch with a member of our team at email@example.com.
With the passing of the original deadline in January, The European Securities & Markets Authority (ESMA) have granted a 6 month grace period to allow market participants another opportunity to become compliant with one of the most important aspects of the Mifid II regulation, to obtain a Legal Entity Identifier number.
The deadline extension allows banks to conduct reportable transactions without an LEI, however other legal forms have also been using this as a means of performing transactions. This of course, is a temporary fix. One thing we learned here at LEI Worldwide last January was the number of legal entities applying for an LEI number rose dramatically. In the ten days in the lead up to January 2018, Global LEI saw a 62% increase in orders, compared to the final ten days of November 2017.
Contracting authorities such as The London Stock Exchange, and Bloomberg notified entities applying that they were not guaranteed to make the deadline if they did not complete the application process from the 13th December 2017. Nevertheless, the number of applications continued to pile up. Contracting authorities such as GMEI Utility and EQS made a ‘SAME DAY’ registration option possible, which guaranteed you application would be complete within 24 hours.
With well over 1 million LEI Numbers now issued, and with Summer just around the corner, it is advised that if you require an LEI Number you register as soon as possible. It is not likely that the deadline will be extended again, and ESMA may not show the same grace to non-compliant entities, who will face a “no LEI, no trade” ruling. If you require an LEI number in a hurry, contact one of our experts for advice on a SAME DAY LEI, to receive you LEI number within 24 hours.
Alternatively, register your legal entity today and become MifiD II compliant by filling out our LEI registration form here. One of the benefits of registering with LEI Worldwide is that you can register an entity from any country in the world and your LEI number will be globally recognised, fully active and MifiD II compliant within 24 hours.
To find out more information, or if you require an LEI Number, please contact our registration team at firstname.lastname@example.org.
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 email@example.com.
LOU map of the world
The process of obtaining an LEI number has never been more complicated, but also has never been made more simple. With a lot of options, you may be wondering which LOU you should register your number with.
CEO of a prominent LEI authority, has said “we urge impacted market participants to get an LEI as soon as possible”. There is no guarantee that all entities affected will have procured an LEI number by January, which means some firms will be unable to execute trades.
LEI Worldwide provide a service by which we collate the required information on behalf of our clients, and act as their LEI partner. Working in collaboration with the LEI number issuers (LOU’s), and effectively streamlining the entire process.
Having your LEI number registered on the global database means your organisation is searchable and certain pertaining to your legal entity is visible to the public domain.
But what exactly can they see? For one, the Local Operating Unit from which you have obtained your number is visible. This means if you are a company based in Germany but have received an LEI from the London stock exchange, it will be visible.
“A legal entity is not limited to using an LEI issuer in its own country; instead it can use registration services of any LOU that is accredited and qualified to validate LEI regitrations”
This is in the interest of fair play, as there are only a small number of issuers in the world e.g South America has only one – in Argentina.
Worldwide competition means LOU’s must price competitively and there are no monopolies within any given jurisdictions.
But that prompts the question, is it better to get an LEI from a particular country? If so, which country is the best one?
To answer that question, we must first ask what benefits there are to the LEI system for the organisations n question. Firstly, increased transparency will provide more accurate identification. Risk management and operational efficiency will be increased by more simplified regulatory reporting, and the overall record keeping of trading will become more visible, to you, and the governing bodies.
One LEI does not provide more benefits than another, but reputation matters. If your organisation is trading under the issuance of an LOU that has been internationally red flagged, that stigma may be associated with you.
LEI Worldwide provide the option to receive an LEI number from all 30 LOU’s, but here are a few pointers to keep in mind when selecting yours, regardless of where in the world you may be.
Your first filter should be geographical location.
Yes, it is probably most common to register with your jurisdictional LOU, for example The London Stock exchange if you are based in the EU. By registering via LEI Worldwide, you can register your LEI with any of the LOU’s in the world and then port your LEI at any time. The benefit of this is that you may conduct business or dealings in another country – or continent, and having your LEI from that region helps you to leverage yourself as an entity within that region.
Other filter to consider before you choose an LOU, may be the reputation of the LOU in question.
Ask yourself, is this a stock exchange, or well known organisation that has been red flagged? Do you already have a working relationship with them? And are they the organisation you want to be associated with? Finally, each LOU may have their own pricing structure, and a small bit of research may be required to source the least expensive, or reasonably priced.
To get your LEI number and choose an LOU click here.
The views expressed in this blog belong to LEI Worldwide.