The Regulatory Oversight Committee (ROC) of the Global Legal Identifier (LEI) System has issued a consultation report that proposes a limited update to the way relationships affecting funds are recorded in the Global LEI System (GLEIS), with the objectives of making sure that the implementation of relationship data is consistent throughout the GLEIS and provide a means to facilitate a standardised collection of fund relationship information at the global level.
The consultation report proposes to replace the current optional reporting of a single “fund family” relationship as part of Level 1 (reference data of the entity) with the following relationships, as part of the “Level 2” data (relationship data):
- “fund management entity”, proposed to be defined as a ‘legal entity whose regular business is managing one or more investment funds” (possibly distinguishing a main fund management entity from other fund management entities involved in the management of the same fund). Funds would have to provide this information in order to receive or renew an LEI. An entity would report if it is a fund, and this information would be recorded as part of the public reference data of the entity, subject to challenge by third parties;
- “umbrella funds” relationship, proposed to be defined as a situation where ‘an investment fund has one or more than one-sub-funds/compartments where all sub-funds/compartments have a common (main) fund management entity and each sub-fund/compartment has its own investment objectives, separate investment policies and strategies, segregation of assets, separate investors and where an investment fund has segregated liability between sub-funds/compartments. There would be no opt out from reporting the existence of an umbrella fund where the sub-fund does not itself have legal personality and is a sub-set of another legal person, consistent with the decision made by the ROC for international branches. In other cases, reporting of the umbrella fund could either: (i) be optional; or (ii) be part of the information that must be provided in order for an LEI to be issued or renewed to a sub-fund/compartment, with the same opt-outs as for the reporting of fund management entities;
- “master-feeder” relationship, proposed to be defined as a relationship, where a “feeder fund is exclusively, or almost exclusively, invested in a single other fund, or several funds that have identical investment strategies referred to as a master fund (or master funds)”. Reporting this relationship could either: (i) be optional; or (ii) be part of the information that must be provided in order for an LEI to be issued or renewed to the master fund (or possibly feeder fund) with the same opt-outs as for the reporting of fund management entities; and
- “other fund family”, reporting this relationship, which would capture other family relationships not captured above (such as those specific to a jurisdiction), would be optional.
The report also discusses and seeks views on whether an entity that has a relationship with a fund should always be reported to the GLEIS using the LEI of this entity (which would in practice, force such related entities to obtain an LEI, even where they are not required to do so by the law or regulation of the jurisdiction where they are organised and/or do business), or whether the current situation where a name is recorded could be continued, as well as other issues such as the validation and recording of these relationships.
The deadline for comments on the consultation report is 26 November 2017.
View LEI ROC consultation document on funds relationships in the Global LEI System, 26 September 2017