The Global Legal Entity Identifier Foundation (GLEIF) has today pioneered the inclusion of a Legal Entity Identifier (LEI) within digital, machine-readable financial documentation.
In partnership with XBRL International, GLEIF has published its 2018 annual report in human and machine-readable Inline XBRL and HTML format, with GLEIF’s LEI embedded into the financial information for the first time. It becomes the first official business report globally which automatically links the filing entity to its verified LEI reference data held within the Global LEI Index.
The Global LEI Index is the only global online source that provides standardized, high-quality and free-to-access legal entity reference data on entities with an LEI. Reference data includes business card information on an entity, including name and registered address, together with relationship data which confirms if the entity owns, or is owned by, other entities. Verified annually by GLEIF accredited LEI issuers, reference data is accurate and up-to-date.
The process of embedding an organization’s LEI - or that of its affiliates, subsidiaries and parent companies - within digital financial reports, allows market participants who rely on official documents to inform strategic decisions (e.g. traders, investors, regulators) to quickly and easily consolidate and verify information on a filing entity.
Significant advantages of this approach to financial market participants include:
• Easy verification of the filing entity’s identity based on its LEI, resulting in greater end-user trust in the authenticity and integrity of the documents.
• Automated access to aggregated data on the filing entity. This will create multiple benefits including: enhanced visibility of the entity’s reference data available within the Global LEI Index; opportunities to create new online databases that collate key data assets of entities with an LEI; and easy aggregation of information on companies obtained from multiple sources supporting comparability of standardized financial information.
• Increased transparency for end users on an entity’s ownership structure. Relationship networks between LEIs can be quickly and automatically established when the LEIs of the filing entity, its affiliates, subsidiaries and parent companies are provided in machine-readable financial reports.
• Improved ability for regulators to minimize market abuse.
• The GLEIF annual report 2018 has been signed with eIDAS (electronic IDentification, Authentication and trust Services, an EU regulation) compliant certificates. It represents the use of an LEI embedded in a certificate to provide lifetime trust and (technically) non-repudiation.
Stephan Wolf, GLEIF CEO, comments: “Today, GLEIF and XBRL International have taken the first step in revolutionizing the process of publishing, accessing and aggregating trusted digital financial information. Filing financial statements in Inline XBRL format has already become a compliance requirement across many jurisdictions. We encourage companies preparing for this scenario to consider not only the advantages of making paper or PDF-based reporting a thing of the past, but of also integrating the LEI of the filing entity, its affiliates and parent companies in their machine-readable reports. Such a simple action can generate significant industry-wide benefits, including increased trust, enhanced data check methods, and reduced fraud. We are very excited to demonstrate another tangible way in which LEIs support the global digital economy.”
John Turner, XBRL International CEO, comments: “This important first step towards integrating the LEI with the XBRL standard demonstrates the global benefits that are possible with unique identification and digitized, structured reporting. This is a clear example of the efficiencies to be gained when tagging and structuring data and the potential of structured data for analysis, innovation and collaboration. The natural collaboration between the LEI and XBRL will offer new, heightened transparency, enhanced trust and clarity, providing significant assistance to regulators and financial markets.”
Within GLEIF’s 2018 annual report, GLEIF’s LEI is also embedded within the digital certificates of GLEIF’s signing executive officers. These certificates, for the first time, connect the role of the signatory to an organization through the LEI and can therefore be used to verify - automatically, through the shared LEI - that the filed document and the signatories represent the same organization. Incorporating a company’s LEI within digital certificates of its executive officers used to sign financial statements provides reassurance on the data’s reliability and that the information has not been tampered with, despite permitted access to the filed document via any public server globally. Deploying digital signatures, including that of the auditor, also enables efficient report production and distribution processes, the elimination of paper and increased certainty and trust.
GLEIF aims to make standardized digital signing with the LEI available to all. A standard way to embed the LEI in digital certificates as a new separate part of the LEI standard (ISO 17442) has been proposed and is currently under development by the International Organization for Standardization.