No LEI? No Hope.
Regulators are streamlining identity by adopting the LEI. With more than 1.2 million LEIs already acquired by companies operating in financial markets, this global identifier is now the preferred solution for regulatory reporting right around the world.
The Ontario Securities Commission is the latest significant watchdog to require derivatives market participants to obtain an LEI and use it in filing details of OTC transactions to designated trade repositories.
At one level, the LEI is a bit like having a domain name on the internet. You need to manage and renew your own domain name(s)… and without one, your ability to work or do business in many, if not most, environments is limited. Just like it took a while for the whole world to get domain names and build corporate web sites, it will take time for this global corporate telephone book to get filled out. Today, in many environments the rule is “No LEI, No Trade”. Before too long it might be “No LEI, No Hope”… of doing business.
In the near term, the OSC will be focused on monitoring non-reporting of LEIs where counterparties are based in jurisdictions where LEI reporting is mandatory.