The Federal Reserve Board on Monday announced a proposal that would require banking organizations to include their existing Legal Entity Identifiers (LEIs) on certain regulatory reporting forms. The LEI is a unique reference code to enable easier identification of a firm’s legal entities.
During the financial crisis, regulators and the public were often unable to fully assess the extent of a firm’s exposures across all of its legal entities. The LEI is a 20-character alphanumeric code assigned to a legal entity of a financial or non-financial firm, allowing more effective measurement and monitoring of the exposures of a firm’s legal entities, especially in times of stress.
The Federal Reserve’s proposal builds on the framework introduced by the Financial Stability Board–an international body of financial regulators that monitors and makes recommendations about the global financial system–to implement a global identifier system that would uniquely identify parties to financial transactions. LEIs are assigned by Local Operating Units of the Global LEI System, which are responsible for registering legal entities and assigning LEIs to institutions in local jurisdictions. The Global LEI System was initiated by the Financial Stability Board.
The proposal would require banking organizations to include LEIs for its relevant units on certain reporting forms as of June 30, 2015. Comments on the proposal are requested within 60 days of publication in the Federal Register.