PwC takes A Closer Look at the evolution of the Legal Entity Identifier (LEI) within a financial regulatory context, the current state of financial industry readiness, and activities for entities impacted by this change.
The financial crisis created a universal awareness of reference data and helped elevate it from a back office concern to a critical business function necessitating the introduction of legal entity identifiers. Specifically, global regulators have recognized that the consistent identification of clients and counterparties must be a key foundational component in any effort to manage systemic risk. As a result, the global legal entity identifier (the “LEI”) was introduced. Since then, over 360,000 LEIs have been issued in 191 countries, and the Regulatory Oversight Committee (ROC) and Global Legal Entity Identifier Foundation (GLIEF) have been established. Work has also begun on a central technology infrastructure.
This A Closer Look outlines the evolution of the LEI and the progress that has been made since its creation, provides some regulatory context, and discusses the current state of industry readiness and suggested activities for those impacted by this change. The big picture involves trade associations, financial services firms, corporate issuers, newly formed global regulators, and even the G2.