Feedback to FSB on LEI Implementation

Created: 24 September 2018

Following the financial crisis, improvements to the reporting and supervision of financial transactions were necessary and the G20 endorsement of the LEI system was part of measures taken with this objective in mind.  FESE fully supports the idea of the global LEI system and its members are committed to encourage firms to obtain LEIs, to promote transparency of the global financial system and facilitate regulatory supervision.

FESE welcomes the FSB’s review on the implementation of the LEI as we believe regulators and policymakers should always keep the international dimension in mind when producing and evaluating new regulation. It should be noted that, despite the G20 endorsement, many jurisdictions have not yet implemented requirements in relation to LEI.

Requirements for FESE members in relation to LEI were introduced with the application of MiFID II/MiFIR on 3 January 2018, as European trading venues are required to identify each issuer of financial instruments traded on their system with an LEI and provide this information to ESMA and/or their national competent authority. In this context, FESE would like to bring to the FSB’s attention that for non-EU issuers, FESE members have encountered some difficulties in reporting LEIs, as there is no obligation for issuers to obtain LEIs. As a consequence, not all non-EU issuers have LEIs but trading venues are nonetheless required to report these for all tradable instruments. Trading venues have been reaching out to non-EU issuers to encourage these to adopt LEIs. However, these efforts have not always been successful as, in the absence of a legal obligation in their jurisdiction, they may not see the added value.

Therefore, FESE supports FSB’s efforts to promote exchange of best practices on LEI implementation, through collaboration and dialogue. Moreover, FESE would support FSB action to further encourage their members to take measures to promote or require LEI adoption on a global scale.

Read the full position here :