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?