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LEIs - a major change for global commerce

LEIs don’t just impact the financial markets sector – they impact the whole of global commerce.  A company’s LEI will become a key element of accounts receivable, accounts payable, invoicing and e-invoicing, payments and e-payments.  An LEI is intended to be a unique identifier of a legal entity.  It doesn’t just identify a legal entity uniquely from any other legal entity – it will ultimately be the unique, one-and-only identifier that a company will need to use for doing business anywhere in the world.

The US Office of Financial Research (OFR) now wants an industry proposal for a Legal Entity Identifier system, and fast, to support financial regulation and risk management in the USA.  ISO has proposed a new Legal Entity Identifier standard.  Hopefully the US OFR will commit to mandating an ISO standard for legal entity identifiers, rather than a US-specific domestic approach.  And hopefully, as a result, the EU and the rest of the world will adopt the ISO LEI standard.

ISO is due to decide in the next few weeks what approach the world will take to the issuing of LEIs.  One approach can be to have a single, global registrar of Legal Entity Identifiers for every legal entity in the world.  Another approach is to have a registrar for each country or region.  So far, it looks like only two organisations have put forward proposals to be responsible for LEI registration.

When ISO decides which organisation will be the Registration Authority for LEIs, whether that’s on a global or a national basis, some organisation or organisations are going to be given a monopoly.  And that will have an impact on every company in the world.

So calling this a “major change” is not over-statement.  Will you be having a say in any of this?


Comments: (1)

Gary Wright
Gary Wright 07 April, 2011, 20:42Be the first to give this comment the thumbs up 0 likes

Hi Chris


I have been worried about LEI and who operates it for years. The worry is if ISO get involved and use SWIFT. SWIFT of course would love this role but it then makes them even more of a monopoly than now.

As much as SWIFT has done for FS we have to accept that SWIFT is a very small player on the global stage. Even more so if LEI are expected to cover everything outside FS

I believe strongly that LEI should be operated by a new global utility company that is funded by a license of use of LEI by each entity. Global this would ammount to a very low annual cost .Less than a few pounds or dollars. The operation would be very highlu automated to be effective and need some decent modern technology. Another reason to keep SWIFT and its old style technology out

The new utility could be run by a Global council made up leading players who have a stake in maintaining their respective industry LEI

At all costs this should not be run by FS and certainly not SWIFT   

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