ISO financial services standard wins industry support six months ahead of publication
Six months before the expected publication of the completed document, a draft ISO standard for the financial services industry has earned significant recognition and endorsement as a global solution for the accurate and unambiguous identification of entities engaged in financial transactions.
ISO 17442, Financial services – Legal Entity Identifier (LEI), is currently at the Draft International Standard stage and expected to be published as an ISO International Standard by January 2012. However, it was recently recommended by the Global Financial Management Association (GFMA) – a federation of global financial services trade associations – as a basis for a viable, uniform and global LEI solution.
The standard is being developed by ISO technical committee ISO/TC 68, Financial services, whose Secretary, Cindy Fuller, said the committee believed that the voluntary standards it develops can fulfill the requirements of both national and global regulators as they develop solutions addressing the data collection and analysis needs resulting from the recent global financial crisis. Ms. Fuller welcomed the GFMA support for ISO 17442 and said that the global marketplace would be developing governance to use the standard.
Karla McKenna, Chair, of ISO/TC 68, commented further: “We are pleased with the recommendation from global industry and await endorsement of the LEI standard for use by global regulators in the collection of information for the analysis of systemic risk.”
James Whittle, Convenor of ISO/TC 68 working group WG 6, responsible for the LEI standard, explained: “LEIs can be assigned to a legal person or structure that is organized under corporate laws of any jurisdiction. These entities include, but are not limited to, all financial intermediaries, banks and finance companies, all entities listed on an exchange, all entities that trade stock or debt, partnerships and pension funds, all entities under the purview of a financial regulator and their holding companies and supranationals.”
Key attributes of the standard, addressing the requirements from global industry and regulators are:
- Enables unique identification of global entities requiring an LEI
- Defines robust open governance of the issuance and maintenance of the LEI scheme
- Defines an LEI that contains no embedded intelligence
- Can be applied worldwide to support the financial services industry
- Leverages the expertise of ISO/TC 68 in defining and maintaining identifier standards
- Is persistent
- Defines a scheme that is scalable and free from assignment limitations.
The GFMA recommends ISO 17442 as the foundation for an LEI system including a central registry, the assignment of LEIs in accordance with requirements outlined by industry and regulator, and a federated model for LEI application and collection of company information.
ISO/TC 68 has selected the Society for Worldwide Interbank Financial Telecommunications (SWIFT) as the primary ISO registration authority for the standard. Other organizations are being recommended as key partners to operate the core LEI utility as the central point of data collection, data maintenance LEI assignment and quality assurance.
An article on ISO 17442 appeared in April 2011 issue of ISO Focus+ magazine and can be accessed free of charge on the ISO Website.
