The Securities Industry and Financial Markets Association (SIFMA) is calling for an increased push from regulators in the adoption of legal entity identifiers (LEIs) to help measure and monitor systemic risk.
The US securities trade body said that it wants greater uptake of LEIs by the country’s regulators, amid fears that the US is being left behind as other nations push ahead with mandatory implementation of the uniform trade reporting standard.
SIFMA has issued a letter to Jacob Lew, treasury secretary and chairman of the Financial Stability Oversight Council (FSOC), in which it urges the Council to advocate for a more “fulsome adoption” and use by the US regulatory community of LEIs.
LEIs were developed to help financial firms get a consistent and integrated view of their exposures in case of the default of a counterparty.
“A uniform, global legal entity identifier will help regulators and supervisors, researchers and firms to better measure and monitor systemic risk, as well as to more effectively measure and manage counterparty exposure and improve operational efficiencies,” states the letter, signed by SIFMA president and chief executive (CEO) Kenneth Bentsen.
A total of nearly 238,000 LEIs have so far been issued globally, representing registrations from more than 160 countries. Of these records, about 28% represent US entities while LEI registrations in Europe represent nearly 60% of the total.
European regulation is moving LEI usage beyond the swaps markets, where agreement on technical standards will ensure uniform reporting requirements across all EU member states in areas such as own funds, financial information, large exposures, liquidity ratios, leverage ratios and asset encumbrance. In addition, the EU’s Markets in Financial Investments Regulation (MiFIR) will require use of the LEI in reporting of securities and other transactions.
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Chicago based Treasury Management System (TMS) vendor GTreasury and Sydney based risk and treasury management vendor Visual Risk have joined forces in a strategic alliance to ... read more