The Global Legal Entity Identifier System (GLEIS) is making significant progress as the Global LEI Foundation (GLEIF) makes operational improvements to the system and the Regulatory Oversight Committee (ROC) prepares a consultation paper on how hierarchy data can be added to the business card data already attached to LEIs.

On the operational front, the GLEIF recently took over daily publication of the concatenated file of all LEIs issued globally from c-lei.org, a project supported by GS1. The temporary c-lei.org solution was put in place when the GLEIF started issuing a concatenated file in October 2014 but did not have the staff to support it and decided to use the file service already offered by c-lei.org.

The GLEIF states that is does not modify any original LEI source files published by Local Operating Units (LOUs) in the global system or perform any data checks, leaving LOUs to validate and verify data provided by entities applying for an LEI using third party sources. What it does check is that LEI data fits the common data file format set down by the ROC last summer. It is also increasingly interested in the quality of LEI data.

Stephan Wolf, CEO of the GLEIF, says that if LEI data is accurate, validated and in the correct format, it will be added to the concatenated file and be accessible free of charge to interested users. He also says the GLEIF plans to add more quality controls to the data. These will go beyond checking the file structures of LEIs and will look at LEI records and some of their data attributes such as addresses and regional issue codes to ensure they are correct.

A data challenge process is also being developed and is due to be available late this summer. It will allow data consumers to challenge LEI data with either the GLEIF or an LOU and use crowd sourcing to improve the data. By the end of the year, the GLEIF also hopes to publish an LEI data quality report on its website.

The long-running issue of LEI hierarchy data, or rather the lack of it, is also being addressed. This is being done by the ROC, the policy making arm of the GLEIS, in consultation with the Private Sector Preparatory Group, a group formed early in the development of the global system to advice the ROC, the GLEIF, LOUs and the public sector. The discussion centres on the collection and management of data on direct and ultimate parents of legal entities in the GLEIS and will lead to a proposal on hierarchy data and a public consultation that is due to start soon this summer.

Wolf suggests that in line with previous plans, but dependant on the public consultation, decisions on hierarchy data covering direct and ultimate parents will be made late this year or early next year. Once the use of this hierarchy data is proven within the global system, further time is expected to be spent responding to public interest in extending the data further to provide a full entity data hierarchy – or what the GLEIF calls a Christmas tree. Whatever the outcome, the GLEIF will collect both LEI and hierarchy data from LOUs and continue to make it available centrally.

On a more formal level, the GLEIS Master Agreement covering contractual agreements between all parties in the global system, the GLEIF Service Catalogue that defines GLEIF services and access groups, and the GLEIF Service Level Agreement that details LOU services as defined by the master agreement will also be published this summer.

While these developments fast track progress of the GLEIS towards completion, take-up of LEIs is relatively pedestrian with over 376,000 codes now issued, up from about 300,000 at the close of 2014. Dodd-Frank in the US and European Market Infrastructure Regulation (EMIR) in Europe sparked early volumes of LEI issuance as both require the identifier to be used in regulatory reporting. Another major step up is likely to result from the lead in to the implementation of Solvency II across the insurance industry in January 2016. A similar regulation being developed by the European Insurance and Occupational Pensions Authority (EIOPA) and covering the pensions industry is expected to boost numbers further.

Some 28 LOUs have so far been endorsed by the ROC to issue LEIs and 23 of these are active, issuing LEIs across 125 jurisdictions. LOUs in Europe have issued the lion’s share of LEIs, about 200,000, as a result of EMIR requirements. The US follows a short distance behind. Asia Pacific is expected to up its game as jurisdictions increase implementation of regulations requiring use of the LEI. South America and Africa will take more time as they have no local regulations that call on the LEI.

Wolf suggests the number of LOUs will not be increased in the short term while data quality is being addressed. Among the problems raised by a global federation of LOUs is language differences, particularly in Asian countries where there is no English equivalent for entity addresses. The GLEIF is looking to solve this problem through improved transliteration.

With a focus on specific problems and broad issues, the GLEIF and ROC continue to run meet the market events – the last one in New York attracted over 140 participants – with a view to understanding market concerns around the LEI and encouraging take-up. Wolf says the LEI is a huge success story. In many ways this is true, considering how far the global system has come from a standing start in June 2012, yet meet the market sessions continue to raise questions around LEI data quality and coverage that are as old as the identifier itself.