The Depository Trust and Clearing Corporation (DTCC), the US post-trade utility, says its interim legal entity identifier (LEI) utility has been approved by global regulators.
The DTCC developed the CICI Utility in collaboration with financial message provider SWIFT, issuing about 87,000 Commodity Futures Trading Commission interim compliant identifiers (CICIs) to corporate and financial entities in about 140 countries since inception in 2012.
The regulatory oversight committee (ROC) of the Financial Stability Board, which is comprised of global regulators and is responsible for the direction of the global LEI initiative, has now endorsed and recognised the CICI Utility as a pre-local operating unit (LOU).
“The ROC’s endorsement underscores the importance of industry-wide collaboration to develop the necessary principles and requirements for establishing an efficient operating framework for a GLEIS (Global legal Entity Identifier System),” William Hodash, DTCC managing director and chairman of the CICI Utility, said.
“The progress that’s been made in establishing a standard unique global identifier and requiring it on mandatory reporting for all counterparties to derivatives transactions paves the way for other asset classes to be brought under the fold, giving global regulators and market participants alike greater insight on potential risk exposures.”
The ROC also endorsed two other pre-LOUs: Germany’s WM Datenservice and France’s National Institute for Statistics and Economic Studies.
In July, the committee released guidelines for acceptance of pre-LEI. The new principles led to about 18,000 uncertified CICIs that have never been used in regulatory reporting being deleted.
The LEI is one of many initiatives that resulted from the financial crisis, aimed at allowing regulators to track counterparty entities and their activities with a unique 20-character code.
The LEI will be one of about 85 data fields required for the reporting of OTC derivatives trades under the Dodd-Frank Act, the European market infrastructure regulation, and other legislation in Australia, Canada, Singapore and Hong Kong.