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LEI Revolution

Authored by: Silvano Stagni, Global Head of Research at Hatstand, a Synechron Company

1. Introduction
The Legal Entity Identifier (LEI) is a globally managed standard system to identify a legal entity. Local agencies, known as Local Operating Units (LOU), can issue an LEI. There is an infrastructure in place to ensure that each LEI issued is unique and there are no duplicates globally. Current regulations limit the compulsory use of the LEI to a few applications such as EMIR post-trade reporting to Trade Repositories and EBA guidelines on Large Exposure Reporting. The LEI is used to identify a legal entity in less than a dozen felds in two reports.

The new regulatory environment will take effect between the summer of 2017 and the summer of 2018. It will lead to an extended use of the LEI. With the requirements of MiFID II/MiFIR, EMIR, SFTR and MAR for both reporting and record keeping merged, there will be over seventy felds where the LEI is either the main identifier or the alternative identiffier when the main one is not available. This represents a six-fold increase on the current regime.

2. Brief History
The LEI and the structure that has managed it have been effective since 2013. It is the first of the three Unique Identifier codes (Unique Entity Identifier, Unique Product Identifier and Unique Transaction Identifier) that have been discussed by the International Standard offices (ISO) and numeric agencies such as ANNA for over a decade.


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