The Financial Stability Board (FSB) agreed (in conjunction with the G20) as part of its response to the global financial crisis that it would propose the use of a new Legal Entity Identifier (LEI) system aimed at achieving a unique, worldwide identification of parties to financial transactions. Although the global LEI system is not yet fully operational, the European Banking Authority (EBA) has released a Consultation Paper setting out a Draft Recommendation that all credit and financial institutions in the European Union adopt the use of 'pre-LEIs' as unique identification codes (mainly to ease the process by which banks fulfil their reporting obligations to the EBA), to ensure consistency of reporting and identification. The EBA recommends that all EU competent authorities should request that all institutions under their supervisory remit which are subject to reporting under the Capital Requirements Directive IV and Regulation (CRD IV / CRR) should obtain a pre-LEI code, by 31 March 2014 at the latest (or by 31 December 2014 at the latest for those institutions not reporting to the EBA under CRR). The move towards full use of LEI codes under the FSB regime will be reported on as developments occur. Responses to the EBA's Consultation Paper are requested by 28 November 2013. Other aspects of European legislation, such as the European Market Infrastructure Regulation (EMIR), require financial institutions to identify themselves using LEIs (e.g. to report transactions to trade repositories), so the European Union's early compliance with these requirements is welcome.

Useful links

European Banking Authority Consultation Paper