The European Insurance and Occupational Pensions Authority (EIOPA) launched today a consultation on revised Guidelines on the use of the Legal Entity Identifier (LEI). LEI is now widely used by the financial industry especially in the European Union, not only for identification of legal entities but also for data quality purposes, supporting activities in the area of financial stability, oversight and supervision as well as consumer protection.
Following the introduction of LEI in 2012, EIOPA issued its own Guidelines on the use of the LEI in October 2014. EIOPA identified a need to review and subsequently revise its current Guidelines due to several reasons:
- EIOPA’s strategy on data and digitalisation, including aim to increase data standardisation, and ongoing implementation of cross-cutting projects within EIOPA where data quality and assessment of interconnectedness is key;
- Reflection of the principle of proportionality;
- 2020 ESRB Recommendations on identifying legal entities which are focusing on the LEI as a common identifier;
- 2019 FSB Thematic Review on Implementation of the LEI which listed some remaining obstacles which prevented wider LEI adoption.
The focus of this public consultation refer to the scope (and its clarity) of entities that should have a Legal Entity Identifier. The suggested scope is broader than before. Apart from Institutions for Occupational Retirement Provision (IORPs) and insurance and reinsurance undertakings the context of branches and intermediaries is introduced. The revised Guidelines also consider the need for a better and wider identification of groups of entities as well as third country branches. The revised Guidelines also cover the necessity to use LEI code for identification purposes when competent authorities report to EIOPA.
EIOPA is also seeking to feedback from stakeholders regarding the impact assessment in particular on proportionality aspects when it comes to IORPs and intermediaries. All interested stakeholders are invited to provide comments by 30 June 2021.
LEI is a unique identification code proposed by the Financial Stability Board (FSB) and endorsed by G20 in 2012, aimed at achieving a unique, worldwide identification of legal entities participating in financial transactions.