Swift was selected by the International Organisation for Standardisation (ISO) last spring to act as a global registration authority for the new alphanumerical codes that are designed to unambiguously identify the counterparties to a financial transaction. The creation of the new global ID is seen as a critical element in removing the systemic risks facing the industry when unwinding outstanding transactions in the event of a major counterparty defualt.

The Financial Stability Board, which is co-ordinating the global effort to define the new standard, has taken advice from industry working groups who were concerned about the potential for monopolistic abuse in the creation of a central registration authority. It has asked the ISO to remove the role of Registration Authority (RA) from the ISO standard 17442, preferring instead a federated system in which national authorities determine the allocation and distribution of identifier codes.

The FSB proposals would still require the creation of a central utility to oversee the ongoing management of the standard, providing a ray of hope for Swift in salvaging something from its efforts through its ongoing collaboration with the Depository Trust and Clearing Corporation (DTCC).

Paul Janssens, LEI programme director at Sswift, says: "This is a change in terminology rather than functionality and not a reflection on Swift or its capabilities. Swift has confirmed its commitment to play a role in the allocation of LEIs. We continue the development of our proposed solution in full collaboration with the DTCC."

But with the Commodity Futures Trading Commission in the US set to select an LEI issuer and authority for the roll-out of the first batch of codes covering OTC derivatives and swaps transactions in July, Swift may well find itself stuck at the starting gates as the DTCC decides to go it alone on its own turf.