Issues 1,000 codes to organisations worldwide.
- Demand rises as 12th February deadline for regulatory reporting approaches
- ISE endorsed by international oversight body, the ROC as a pre-LEI provider
The Irish Stock Exchange’s (ISE) has issued over 1,000 pre-Legal Entity Identifier (LEI) codes since launching its online application service through www.ISEdirect.ie last autumn. Demand is set to rise as some organisations need to have pre-LEIs for regulatory reporting purposes under European securities legislation which comes into effect on 12th February.
LEI is a global reference code which uniquely identifies each legal entity that engages in a financial transaction. This regulatory initiative is designed to enable the identification and linking of parties to financial transactions and facilitates the better management of counterparty risk.
Among the 1,000 codes issued, the ISE’s customers includes well-known Irish brands such as Kingspan, Ryanair, Smurfit Kappa and Musgrave Group, international banks like Morgan Stanley, national service providers such as RTE and ESB as well as a large range of investment funds and debt issuers, both listed on the ISE and elsewhere. In addition, some SMEs in Ireland that engage in foreign exchange transactions to manage currency risk have also been applying for codes.
The geographic spread of the ISE’s customer base for their new service extends far beyond Ireland and includes Australia, USA and Canada, the United Arab Emirates and a wide range of European countries – United Kingdom, Germany, France, Spain and Italy.
The LEI requirement is part of the international response by regulatory authorities to the global financial crisis. In December, the ISE was only the sixth organisation worldwide to be endorsed by the Regulatory Oversight Committee (ROC), the global body of regulators which oversees adherence to the LEI standards. The Central Bank of Ireland, which has sponsored the ISE as the pre-LEI provider in Ireland, is a member of the ROC.
James Ferguson, Head of Operations and LEI Lead said, “The ISE’s user friendly and simple application process on www.ISEdirect.ie has enabled us to attract entities, both existing and new customers. Based on customer feedback, we expect this strong interest in the ISE service to continue.”
Brian Healy, Director of Traded Markets, Development, Operations added, “We are delighted with the success of our pre-LEI service – having delivered over 1,000 pre-LEI codes to more than 20 jurisdictions across the globe, the level of take-up is a real validation of the strength and quality of our offering and its international potential. The ISE has been at the forefront of the LEI initiative globally and our early endorsement by the Regulatory Oversight Committee re-enforces our expertise in this area.”
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The global LEI system (GLEIS) is part of the international response by regulatory authorities (including G20 and the Financial Stability Board) to the global financial crisis.
LEIs will be required by:
- All entities listed on an exchange
- All entities that issue equity, debt or other securities for other capital structures
- All entities that trade stock or debt, investment vehicles constituted as corporate entities or collective investment agreements (including umbrella funds as well as funds under an umbrella structure, hedge funds, private equity funds, etc.)
- All financial intermediaries
- Banks and finance companies.
The ISE is the National Numbering Agency (NNA) for the Republic of Ireland. Since 1995, the ISE has issued over 100,000 ISIN (International Securities Identification Number) and CFI (Classification of Financial Instruments) codes for Irish registered securities. The ISE was endorsed by the Regulatory Oversight Committee as the pre-LEI provider in Ireland in December 2013.
European Securities Regulation
The implementing technical standards of the European Market Infrastructure Regulation (EMIR) are due to implemented into European law on 12th February by ESMA, the European Securities & Market Authority. These include requirements for regulatory reporting of OTC derivative transactions to mitigate risk – pre-LEI codes are necessary for this reporting obligation.
ESMA ensures greater consistency in day-to-day implementation of EU law and helps national securities regulators, such as the Central Bank of Ireland, work together. The role of ESMA is to contribute to safeguarding the stability of the European Union's financial system by ensuring the integrity, transparency, efficiency and orderly functioning of securities markets, as well as enhancing investor protection. It forms part of the European System of Financial Supervision which also includes European Supervisory authorities in the banking sector (EBA) and the insurance and occupational pensions sector (EIOPA).
More information on LEI is available from the ISE’s LEI brochure.
Press release by The Irish Stock Exchange Monday 3rd February 2014
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