The GMEI utility, developed by DTCC and SWIFT in collaboration with the financial industry, creates and assigns globally accepted unique identifiers across multiple jurisdictions to companies involved in financial transactions, a critical requirement for compliance with current and future reporting requirements. The legal entity identifier is the international standard ISO 17442. LEIs are identification codes that allow consistent and accurate identification of all legal entities involved in financial transactions, including non-financial institutions. They make it possible to accurately identify a legal party to a financial transaction. It is linked to a record of critical information about the transaction unit, which can also include information about the final ownership of the entity. The identifier is formatted as a 20-digit alphanumeric code based on the ISO 17442 standard developed by the International Organization for Standardization (ISO). It connects to important information that allows clear and unambiguous identification of legal entities involved in financial transactions. Each LEI database record contains information about the ownership of a legal entity, answering the questions “who is who” and “who owns whom”. Therefore, the publicly available LEI database can be considered as a global directory of non-individual participants in the financial market.
Since August 2012, DTCC and SWIFT have been offering a preliminary global legal entity identifier solution known as the CFTC Interim Compliant Identifier (CICI). In October 2013, the pre-LEI or CICI of the public service CICI were approved by the ROC for use in global reporting across asset classes and for extended use of these identifiers beyond reporting to trade repositories. In December 2013, CICI Utility was renamed GMEI Utility to reflect its broad international reach. The Legal Entity Identifier (LEI) is a globally unique identifier for legal entities involved in financial transactions. [1] It is also known as the LEI code or LEI number and is used to identify legal entities in a globally accessible database. Legal entities are organizations such as companies or government agencies involved in financial transactions. One person cannot obtain an LEI. [2] The identifier is used in regulatory reporting to financial regulators and all financial companies and funds must have an LEI. The benefits generated by the Global LEI Index for the wider business community increase with the rate of LEI adoption. Therefore, in order to maximize the benefits of identifying companies in the capital markets and beyond, companies are encouraged to participate in the process and obtain their own LEI. Getting an LEI is easy. Registrants simply contact their preferred trading partner from the list of LEI issuing organizations available on the GLEIF website.
The working groups made proposals and recommendations regarding global governance and oversight, a funding model, a revenue model for self-registration and self-validation, and an operating model that is evolving towards a fully federated architecture and a corporate and legal structure for the LEI system itself. The private sector has made several attempts over the past 20 years to establish a global legal entity identification system, but it is not in a position to achieve the coordination necessary to implement a single global solution. In the aftermath of the 2007-2009 financial crisis, the leaders of the world`s largest economies, through the G-20 and the Financial Stability Board (FSB), agreed to develop a coordinated solution to overcome these challenges. These efforts resulted in a public interest initiative that is now the Global LEI System. In response, the LEI system was developed by the G20 in 2011[4] in response to the inability of financial institutions to clearly identify organizations so that their financial transactions can be fully tracked in different national jurisdictions. [5] Currently, the Legal Entity Identifier Regulatory Oversight Committee (LEI ROC), a coalition of financial regulators and central banks from around the world, promotes the expansion of the LEI. The United States and European countries require companies to use the legal entity identifier when reporting details of OTC derivatives transactions to tax authorities. [ref. needed] Today, authorities in 45 jurisdictions require the use of the LEI code to identify legal entities involved in various financial transactions. [ref. Some of the largest multinational banks have thousands of legal entities, many with similar names, operating around the world.
