Release Date: June 13, 2012
Contact: Liz Pierce, 212.313.1173, email@example.com
GFMA Statement on the FSB’s Recommended Global LEI Framework
New York, NY, June 13, 2012–GFMA today released the following statement in response to the Financial Stability Board’s (FSB) recommendation to the G20 leaders on how to structure a global legal entity identifier (LEI) system.
“GFMA fully supports the establishment of a global LEI solution, which could dramatically improve systemic risk management in the global financial industry. While we will continue to review the FSB’s recommendations in more detail, upon first read we are encouraged that the FSB has laid out principles for a global LEI that are broadly in line with the industry’s recommended LEI requirements. However, questions remain as to how these high-level principles will be implemented.
“GFMA commends the FSB for recognizing the need for a strong central control process to ensure the integrity of the data in the LEI database. In order for a federated LEI solution to be effective, it needs to be balanced to ensure that data quality and cost efficiency are preserved. As the FSB moves forward with implementation, it is critical that the Central Operating Unit (COU) maintain standards for data quality across jurisdictions.
“GFMA is also pleased with the FSB’s stated intent to work with industry participants moving forward. We understand the desire for regulatory control over the LEI system. However, given that the Implementation Group is comprised of only regulators, it will need to establish an active interaction with industry experts to ensure the system is implemented timely and effectively.
“Finally, GFMA supports the FSB’s aggressive schedule calling for an LEI system to be launched by the end of this year and independently functional by March 2013. There’s no need to unnecessarily delay the risk management benefits of the LEI. The industry is ready, willing, and able to share our knowledge and experience in data validation with the new Implementation Group and others to facilitate the tight deadlines put forth in the recommendations. As the LEI system gets started, we encourage the FSB and global regulators to utilize the industry-endorsed prototype LEI utility (as provided by DTCC and SWIFT), which operates on a cost-recovery basis and provides data that is freely available to all users, without redistribution or licensing fees.”
For more information, please visit: http://www.gfma.org/initiatives/legal-entity-identifier-(lei)/legal-entity-identifier-(lei)/.
The Global Financial Markets Association (GFMA) brings together three of the world’s leading financial trade associations to address the increasingly important global regulatory agenda and to promote coordinated advocacy efforts. The Association for Financial Markets in Europe (AFME) in London and Brussels, the Asia Securities Industry & Financial Markets Association (ASIFMA) in Hong Kong and the Securities Industry and Financial Markets Association (SIFMA) in New York and Washington are, respectively, the European, Asian and North American members of GFMA. For more information, visit http://www.gfma.org.