The Global Legal Entity Identifier Foundation (GLEIF) has set out development plans for 2016 including a recently introduced LEI data quality management programme and completion of the accreditation process for LEI issuers – but provision of much needed LEI hierarchy data remains sketchy, with the GLEIF saying only that it expects to design a process to collect data on parents of legal entities this year.

While the LEI is gaining traction as a result of regulatory reporting requirements and financial institutions beginning to adopt the identifier for internal purposes such as risk management, its lack of prescribed relationship and hierarchy data limits the extent of its usefulness, requiring firms to link it to other data to gain a full picture of exposure.

The GLEIF’s 2016 plan begins to solve this problem, but falls far short of ensuring full relationship and hierarchy data, and fails to provide a timeline for the provision of legal entity parent data. Stephan Wolf, CEO of the GLEIF, says: “Following a public consultation carried out by the LEI Regulatory Oversight Committee in 2015, it is expected that in 2016 a process will be designed that allows collecting data on parents of legal entities. As a result, the global LEI data pool will provide information on ‘who owns whom’ in addition to ‘who is who’. The GLEIF will be responsible for carrying out the project management and development of corresponding organisational and technical standards.”

The GLEIF’s data quality management programme aims to optimise integrity of the LEI data pool and initially bases its measure of quality on a set of seven criteria that use standards developed by the International Organisation for Standardisation. The criteria cover the accuracy, completeness, comprehensiveness, integrity, representation, uniqueness and validity of LEI data records. The GLEIF then scores the quality level of LEI data and reports the percentage of all LEI data records that have successfully passed checks against the criteria during a specific month. In its first data quality report made on 31 January, 2016, the GLEIF reported a total data quality score of 99% and noted LEI issuers in the Czech Republic, Norway, China, Turkey and Poland as the top five in terms of data quality in January. The top five countries on the data quality list were Puerto Rica, Paraguay, Canada, the US and the Cook Islands.

Wolf says the data quality management programme should help drive LEI adoption, and explains: “The programme will further clarify to market participants globally the advantages of the LEI with regard to its multiple applications in both the public and private sectors. It also ensures that the LEI remains the industry standard that is most trusted.”

Development of the data quality programme over the coming year will include the implementation of additional data quality criteria bringing the total checks up to 12. In the mid-term, the GLEIF also plans to publish detailed data quality reports for each LEI issuer.

The foundation’s accreditation project aims to complete the accreditation process for LEI issuers operating on the basis of previous endorsement from the LEI Regulatory Oversight Committee and accredit new organisations seeking to become LEI issuers.

Wolf concludes: “This ensures the GLEIF will fully monitor the functioning of the Global LEI System.”