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Generally, ICMA strongly supports the use of standardised identifiers such
as LEI, UTI and UPI, as they help to create consistency and facilitate automation. This is
particularly true in the context of the different transaction reporting regimes, provided
there is sufficient regulatory guidance to ensure a consistent use of the identifiers (eg
responsibility to generate UTIs).
However, it is also important to keep in mind that these are global identifiers and that the
scale of adoption differs significantly across jurisdictions. Where a mandated use within
Europe is feasible this would seem sensible and has already led to a widespread use and
availability of these identifiers in Europe (eg under MiFID II). However, where the mandated
use applies to entities/transactions outside of the EU jurisdiction, such a requirement can
(still) be very problematic.
A good example is reporting under the EU SFT Regulation which introduces “LEI of securities
issuers” as a mandatory reporting field, despite persistent gaps in the availability of issuer
LEIs for many jurisdictions around the world and the fact that firms reporting under SFTR in
most cases have no leverage on the relevant issuers to apply for an LEI code.
The FSB’s “Thematic Review on Implementation of the Legal Entity Identifier” published in
May 2019 found that so far only 11% of firms issuing securities across the 25 FSB
jurisdictions obtained an LEI (or 55% of all financial instruments). On this basis, European
entities cannot be obliged to use LEI codes consistently on a global level. As a priority, we
would therefore encourage the European Commission to use its weight and influence in the
relevant global regulatory fora (in this case mainly FSB/CPMI-IOSCO) to accelerate the global
adoption of the relevant identifiers....