© dtcc lei and cici update andrew douglas ([email protected] ) november 2012
TRANSCRIPT
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Objective of LEI
Enable consistent and accurate identification of all legal entities that are parties to financial transactions.
Benefits
• For regulators: Strengthen systemic risk capabilities by allowing accurate, consistent, reliable and timely analysis of position and transaction reports across all legal entities, jurisdictions, and asset classes.
• For institutions: Increase the ability of financial institutions to accurately report to regulators, interact with other firms and to improve their risk management capabilities.
What is an LEI?
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Support for LEI
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EU Internal Market Commissioner Michel Barnier - Speech of February 10th 2011“We must also work together in a common identification of market players. This is an area where the U.S. is already committed, but that requires global standards.
G-20 – Cannes Summit Final Declaration - November 4th 2011“We support the creation of a global legal entity identifier (LEI) which uniquely identifies parties to financial transactions. We call on the FSB to take the lead in helping coordinate work among the regulatory community to prepare recommendations for the appropriate governance framework, representing the public interest, for such a global LEI by our next Summit.”
IOSCO-CPSS – ‘Requirements for OTC derivatives data reporting and aggregation’ - August 24th 2011
“A system of LEIs would be an essential tool for aggregation of OTC derivatives data, and [IOSCO] recommends the expeditious development and implementation of a standard LEI.”
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FSB Recommended LEI Infrastructure
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Local Operating Unit (LOU)
Local Operating Unit (LOU)
Local Operating Unit (LOU)
Central Operating Unit (COU)
Board of Directors
Regulatory Oversight
Committee
Governance
Operations
International financial market regulators Upholds governance principles Oversees that global LEI system functions for
public interest Made up of Plenary & Executive Committee
Oversees functioning of COU, operational integrity and implementation, maintenance of standards specified by the ROC
Appointed & overseen by ROC, composed of stakeholders from financial & nonfinancial firms
Ensures the application of uniform global standards /protocols
Manages federation through LOUs Maintains a central logical database of
identifiers and corresponding reference data
Local provision of all LEI functions which the ROC determines do not need to be centralised.
Service providers such as local registries and numbering agencies
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Global LEI (FSB) – timeline
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How? Implementation Group of regulators very active since mid August 2012 PSPG group of 200 industry experts active across 9 work streams
1. Governance & Legal – 3 sub-groups2. Operations – 4 sub-groups3. Ownership and Hierarchy data – 2 sub-groups
Key Deliverables
Infrastructure in Place
2013 & BeyondQ1 2013Q4 2012Q3 2012
October 2012
Legal framework for ROC & COU complete
Q4 2012 – Q1 2013
Implementation group develops standards & operational system for COU
Ongoing
Maintain standards for connection of LOUs to network
Ongoing
LOUs internationally connected to COU
March 2013
Central Operating Unit (COU) in place, system is self standing
November 2012
Regulatory Oversight Committee (ROC) charter endorsed by G20
End of 2012
ROC formed from regulators internationally
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CFTC – key dates
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CFTC CICI codes July 24th CFTC order identifies DTCC-SWIFT as CICI issuer for 2 year term CICI Utility portal goes live August 19th
Ongoing engagement in FSB LEI programme
CFTC reporting SWAP definition finalised August 13th
12th October 2012** Applies to SD/MSP for Credit and Interest Rates asset classes 11th January 2013. Applies to SD/MSP for Commodities, Equities and FX 12th April 2013. Applies for all non-SD/MSP for all asset classes
**CFTC Q&A on Sep 10th 2012..the swap dealer registration regulations go into effect on October 12, and entities that have more than the de minimis level of dealing (swaps entered into after Oct 12) must register by no later than two months after the end of the month in which they surpass the de minimis level. By way of example, if an entity reaches $8 billion in swap dealing the day after October 12, then the entity would have to register within two months after the end of October, or by December 31.
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CICI Utility
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New web portal is www.ciciutility.org
Open access to Search & view New CICI Registration – self and 3rd Party Full & Delta file downloads daily (ftp also available) Certify existing CICI’s Challenge existing CICI’s
24,000 CICI’s migrated from test files to live databaseOperations and customer service teams in place
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CICI Utility - Sample Record
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CICI Solution
IN
Legal Entities including Funds
Ultimate parent (primary parties only)
Registered address Multi language
registration Full & delta file
download and FTP
OUT
Individuals, Branches, Divisions, Sub-accounts
Immediate parent Operating &
settlement addresses Other Relationships
e.g. IM to fund Cross-referencing LEI
to other identifiers
TO FOLLOW
Bulk registration (Buy Side)
Headquarters Address
Expiry date & reason Registry name and
number
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Contacts and resources
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Mark Davies DTCC [email protected] Customer Service CICI Utility [email protected]
CICI Web portal CICI Utility https://www.ciciutility.org
LEI Further reading GFMA http://www.gfma.org/lei/