Upcoming regulatory mandates requiring the use of Legal Entity Identifiers (LEIs) are expected to drive continued growth of The Depository Trust & Clearing Corporation’s (DTCC) Global Markets Entity Identifier (GMEI) utility in the years ahead.
In 2015, new EU regulations, including European Market Infrastructure Regulation (EMIR), Markets in Financial Instruments Directive II (MiFID) and Central Securities Depositories Regulation (CSDR), will require the use of LEIs in their reporting architecture. This is expected to drive greater demand for LEIs as financial firms begin complying with these new mandates.
As of February 2015, the GMEI utility has issued over 165,000 legal entity identifiers (LEIs) to entities from over 140 jurisdictions, representing approximately 50% share of the LEIs issued worldwide.
When the solution went live in August 2012, it had more than 24,000 legal entities preloaded into the database with their reference data validated. As of May 2014, the service had registered and maintained more than 130,000 globally endorsed pre-LEIs.
The GMEI utility (http://www.gmeiutility.org/), offered in collaboration with SWIFT, is designed to create and apply a single, universal standard identifier to any organization or firm involved in a financial transaction globally. The LEI is a critical tool for helping regulators and market participants aggregate and better understand exposures, enhance market transparency and significantly improve the analysis of global systemic risk.
“The industry, DTCC and SWIFT, other Local Operating Units (LOUs) and the Global LEI Foundation GLEIF are all working together to implement the LEI fully since it is so critical to increasing transparency and improving counterparty and global systemic risk analysis,” said Bill Hodash, DTCC Managing Director of Business Development. “The LEI is being mandated first in OTC Derivatives recordkeeping and reporting but it is now beginning to be leveraged by regulators globally and market participants in other asset classes to better manage risk and exposures on a larger scale.”
In 2014, the GMEI utility achieved several key milestones, including:
- Developing strategic partnerships with NordLEI in Sweden, LuxCSD – the LOU in Luxembourg, and CDS Clearing and Depository Services – sponsored to be an LOU in Canada, to increase geographical LEI coverage. These collaborations leverage the GMEI utility’s infrastructure and capabilities and complement a collaboration formed back in 2013 with CUSIP Global Services (CGS), the largest National Numbering Agency in the world.
- Being ranked #1 for data consistency and uniformity by TABB Group and Alacra’s LEI Comprehensiveness Ranking in initial two quarterly evaluations of the LOUs. (read story).
“Our collaborations with CGS, NordLEI, CDS and LuxCSD are vital to the success of the federated operating model of the GLEIS,” said Ron Jordan, DTCC Chief Data Officer. “DTCC and SWIFT are working seamlessly with our partners to provide best-in-class LEI assignment and reference data quality and we are gratified that the GMEI utility has been recognized as the leader in both areas.”
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Global Markets Entity Identifier Utility
DTCC's Legal Entity Identifier Service, the GMEI Utility, Gathers Significant Momentum in 2014