Issue 40 – July 2012
ISO has just published a new Standard for the financial services industry which provides a global solution for the accurate and unambiguous identification of entities engaged in financial transactions.
ISO 17442:2012, Financial services – Legal entity identifier (LEI), is aimed at meeting the data collection and analysis needs of both national and global regulators in their responses to problems arising from the world financial crisis.
The development of ISO 17442 has been positively received by the financial services sector and by regulators. These include the Financial Stability Board (FSB), which was established to coordinate at the international level the work of national financial authorities and international standard setting bodies, and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability.
ISO 17442 is one of the Standards developed by ISO technical committee ISO/TC 68, Financial services, whose leadership was invited to participate in the FSB Industry Advisory Panel formed by the FSB Expert Group charged by the G-20 to prepare recommendations for a global LEI solution to the G-20 at its upcoming meeting in June, in Los Cabos, Mexico. In a communiqué following its plenary meeting on 29 – 30 May in Hong Kong to prepare its recommendations, the FSB stated that its initial reference data and LEI code are in line with ISO 17442.
ISO/TC 68 Chair, Karla McKenna, says the work on the LEI is exemplary in providing an international solution through Standards.
'ISO /TC 68 brought the relevant communities and stakeholders together, looked across industry lines on the scope and coverage of the LEI standard, and built the necessary consensus to deliver ISO 17442, demonstrating the responsiveness and value of the ISO process.'
James Whittle, Convenor of ISO/TC 68 working group WG 6, responsible for the LEI standard, explains the benefits of ISO 17442.
'LEIs can be assigned to a legal person or structure that is organised under corporate laws of any jurisdiction. These entities include, but are not limited to, all financial intermediaries, banks and finance companies, all entities listed on an exchange, all entities that trade stock or debt, partnerships and pension funds, all entities under the purview of a financial regulator and their holding companies and supranationals.'
ISO 17442 describes a 20-character alphanumeric code, as well as additional elements for reference data attributes. Key attributes of the Standard include the following:
- enables unique identification of global entities requiring an LEI
- defines robust open governance of the issuance and maintenance of the LEI scheme
- defines an LEI that contains no embedded intelligence
- can be applied worldwide to support the financial services industry
- leverages the expertise of ISO/TC 68 in defining and maintaining identifier standards
- is persistent
- defines a scheme that is scalable and free from assignment limitations.
Summarised from ISO media release, 30 May 2012