LEI registrations for SFTR must improve, says ISLA
11 September 2019 London
Image: Shutterstock
The International Securities Lending Association (ISLA) has warned that “considerable effort” is still required to improve asset issuer registration for legal entity identifiers (LEIs) to meet the requirements of the Securities Financing Transactions Regulation (SFTR).
An LEI is a unique code that identifies legal entities participating in financial transactions and is required by firms to fulfil their regulatory reporting obligations.
LEIs are already required under the European Market Infrastructure Regulation and the Markets in Financial Instruments Regulation, as well as being a key component of the EU’s SFTR, which is due to come into force in April 2020.
In a market report published this week, ISLA highlighted that a study of securities lending markets discovered that roughly 34 percent of assets managed by custodial banks are missing the required asset issuer data to complete an LEI under SFTR.
The report also references data from a large securities lending data aggregator, which offers a dataset of LEI coverage relating to actively lent/borrowed assets.
The data shows a high level of asset issuer LEI coverage in many EU jurisdictions, including Sweden (97 percent), which has the highest coverage of all surveyed markets, Spain (96 percent), Italy (96 percent) and France (92 percent).
However, several EU nations were also shown to be lagging, such as Ireland (43 percent) and the UK (75 percent).
Commenting on the data, ISLA said: “It should be noted that the data used in the graphic is unweighted and does not include measures of value/volume. It does, however, provide a clear indication that some considerable effort is required to improve asset issuer LEI registration.”
An LEI is a unique code that identifies legal entities participating in financial transactions and is required by firms to fulfil their regulatory reporting obligations.
LEIs are already required under the European Market Infrastructure Regulation and the Markets in Financial Instruments Regulation, as well as being a key component of the EU’s SFTR, which is due to come into force in April 2020.
In a market report published this week, ISLA highlighted that a study of securities lending markets discovered that roughly 34 percent of assets managed by custodial banks are missing the required asset issuer data to complete an LEI under SFTR.
The report also references data from a large securities lending data aggregator, which offers a dataset of LEI coverage relating to actively lent/borrowed assets.
The data shows a high level of asset issuer LEI coverage in many EU jurisdictions, including Sweden (97 percent), which has the highest coverage of all surveyed markets, Spain (96 percent), Italy (96 percent) and France (92 percent).
However, several EU nations were also shown to be lagging, such as Ireland (43 percent) and the UK (75 percent).
Commenting on the data, ISLA said: “It should be noted that the data used in the graphic is unweighted and does not include measures of value/volume. It does, however, provide a clear indication that some considerable effort is required to improve asset issuer LEI registration.”
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