...because if you don’t get involved in the LEI (Legal Entity Identifier) process, you’ll get what you’re given and you’ll pay the price. And that won’t just affect financial institutions and trading – it will affect every company in the world and all of
e-commerce, e-payments, and how much you have to pay for this and who you have to pay.
Today the identifier for a legal entity is a national issue and it’s defined by a national agency: for example, in the UK a unit within HM Government, Companies House, issues a unique UK identity number to every UK-registered company. One proposal today
for a new global standard for Legal Entity Identifiers is that it should be a unique code with no information in it – nothing to indicate the country that issued the identifier or the agency that issued it. Here’s maybe why.
The US Office of Financial Research (OFR) wants the US financial industry to propose a standard and process for issuing unique legal entity identifiers. That will help it to identify who is up to what in the market. Every US legal entity would need a new
and unique legal entity identifier. Let’s assume (based on previous US approaches to regulations around KYC and AML) that this would also apply to non-US firms that want to do business in the USA or that want to do business with a US firm anywhere in the
world. Each such non-US firm around the world would also have to apply for a US legal entity identifier. The US OFR wouldn’t need any information to exist within the legal entity identifier to know in which country or by which agency it had been issued –
it would be issued in the USA by the US agency for legal entity identifiers.
The US OFR solves its problem, and how the rest of the world solves its problems is not an issue for the US OFR. It’s a problem for YOU! Because the proposal for the rest of the world is that one single commercial company is to be given a global monopoly
to charge for issuing new ISO-standard Legal Entity Identifiers for every legal entity in the world. Is that what YOU want to see happen?