A temporary legal entity identifier (LEI) service provided by the Depository Trust & Clearing Corporation (DTCC) and interbank payments provider SWIFT has had its approval extended by regulators to ensure a smooth transition to a permanent system.
The DTCC-SWIFT utility was given a designation as an LEI provider for two years on 23 July 2012 by the Commodity Futures Trading Commission (CFTC) in order to enable market participants to meet trade reporting obligations as part of the US Dodd-Frank Act.
Though the CFTC has been working with other regulators to develop a global LEI system, the US has been far more advanced in its application of derivatives regulation than other jurisdictions, requiring a temporary system.
The global LEI system is yet to begin operation, leading to the CFTC extending the DTCC-SWIFT designation for one year. The system is known as the Global Market Entity Identifier utility.
DTCC-SWIFT will be able to continue issuing LEIs to market participants and their counterparties to enable them to meet their regulatory obligations. Additionally, the identifiers provided will now be known as LEIs, rather than pre-LEIs. Existing pre-LEIs will become full LEIs and will not need to be reissued.