On 28 May 2018, the Financial Stability Board (FSB) published a thematic review report on the implementation of the Legal Entity Identifier (LEI). The report is divided into the following sections: jurisdictions’ approaches and strategies to implement the LEI; LEI coverage; achievements and benefits; obstacles to adoption and implementation; and advancing LEI adoption. Key points to note within the report include:
- all FSB jurisdictions except one have implemented the LEI in at least some contexts. Almost all FSB jurisdictions have regulations referring to the LEI, although the number of rules varies widely;
- very few jurisdictions (typically those with large financial markets) have implemented the LEI beyond over-the-counter derivatives and securities transactions;
- all but three FSB jurisdictions’ central banks have an LEI, and all jurisdictions reported having at least one other public sector body with an LEI;
- benefits derived from LEI implementation include improved data analysis and, in some cases, cost savings. A significant proportion of FSB jurisdictions report that the use of LEI has led to improvements in data quality and analysis;
- the existence of other identifiers – in particular, no-cost or low-cost national identifiers and of systems built around those identifiers – is seen by several jurisdictions as a barrier to LEI implementation, in the sense that it reduces incentives for jurisdictions to promote mandatory LEI adoption;
- the perceived asymmetry of financial burden and benefits seems to be an issue across jurisdictions; and
- prospective LEI use case examples identified by jurisdictions and market participants include digital authentication, KYC, payment messaging, trade/supply chain finance efficiencies, e-invoicing and financial institution resolution.
The FSB also sets out a number of recommendations addressed to FSB member jurisdictions, the FSB itself, relevant standard setting bodies and international organisations, and the LEI Regulatory Oversight Committee.