Annual Report
2023
2023 Annual Report
2
Chair’s Statement
3
CEO’s Statement
4
The LEI in 2023
5
Regulation 2023: A Driving Force Behind Global LEI Adoption
7
2024: Strategic Milestones
8
Consolidated Financial Statements
10
Notes to the Consolidated Financial Statements
15
Independent Auditor’s Report
34
Overview of Professional Advisors
35
Abbreviations
36
Contact Us
37
Contents
2023 Annual Report
3
Chair’s Statement
Recent years have brought substantial strategic and
operational change within GLEIF. Yet the goal remains
constant: to expand the benefits of the Legal Entity
Identifier (LEI) beyond its mandated use as a tool to enhance
transparency in financial markets and to encourage its
voluntary adoption across all markets globally. GLEIF made
significant advances in 2022, with the introduction of the
verifiable LEI (vLEI) and expanded on-the-ground presence
for GLEIF across Europe, North America, and Asia. In 2023,
we continued this progress, and have strengthened the
foundations we are creating for the future growth of the
Global LEI System (GLEIS) and expanded use of the LEI
and vLEI as valuable tools for conducting business.
LEI drivers and successes in 2023
GLEIF’s success in 2023 was intentional, expansive and multi-
faceted. This year we have:
•
Expanded LEI issuance, driving volumes to a new record high
of 2.41 million.
•
Reinforced the relevance, utility, and value of the Global LEI
Index for data users globally with a continued focus on data
quality enhancements.
•
Galvanized wide industry support for the LEI. Most notably
we received endorsements from the Bank of International
Settlements (BIS) Committee on Payments and Market
Infrastructure (CPMI) and the Wolfsberg Group to include
the LEI as a data field within ISO 20022 cross-border
payments messages. This ensures that it is now firmly
embedded within the payments industry as a tool to help
the fight against financial crime.
•
Won advocacy for LEI adoption in other markets through
targeted engagement and continuous promotion of the
LEI’s potential to deliver trust, efficiency and transparency
in any identity management system. Key drivers here have
included:
•
The inclusion of the LEI within the Markets in Crypto-
Assets (MiCA) regulatory framework. From May 2023,
obtaining an LEI is a pre-requisite for providing crypto-
asset services in the EU.
•
Easing access to trade financing and global supply chains
through active engagement with influential stakeholders
to raise visibility of the LEI.
•
Enhancing transparency in relation to Environmental,
Social, and Corporate Governance (ESG) credentials.
GLEIF has committed to exploring the development of
digital ESG credentials that can be transmitted with
LEIs to support financing and supply chain inclusion. A
collaboration with the United Nations Development
Programme (UNDP) and the Monetary Authority of
Singapore (MAS) is in progress.
A growing critical mass of regulatory endorsement is
quickening the pace of cross-industry momentum.
Recognition among regulators that the LEI is a key data
and identity connector, that enables critical data sets to be
efficiently matched, is spreading fast. And it’s easy to see why.
The LEI is already mapped to a myriad of other identifiers to
provide a comprehensive view of a legal entity, including the
OpenCorporates ID, S&P Global Company ID, SWIFT’s Market
Identifier Code (MIC) and Business Identifier Code (BIC), and
the Association of National Numbering Agencies (ANNA)
International Securities Identification Number (ISIN). Further
possibilities are endless, including the potential use of the LEI
as a common denominator that binds together an entity’s
different identifiers issued across multiple US agencies and
international authorities. There are countless ways in which
the LEI can add value by ‘connecting the dots’. The ability to
map across geographies and agencies is key to creating a
holistic understanding of complex entities and networks that
can be used to identify fraud.
Digital entity identities:
vLEI progress
Throughout 2023, GLEIF continued to bring to life a digitally
trustworthy version of the LEI, the vLEI, by continuing to expand
the supporting infrastructure. The focus has remained on
establishing the LEI and the vLEI as enablers
of digital trust across multiple value chains where digital trust
is a central principle.
The capacity for the vLEI to verify organizational identity
while promoting trust and transparency in the rapidly
digitizing global economy is unparalleled. The vLEI enhances
the LEI ecosystem by providing an open, reliable, highly
scalable digital cross-border entity identification solution
that seamlessly integrates into regulated frameworks. This
innovation is poised to significantly boost LEI adoption
beyond regulatory requirements and mandates. Imminent
drivers to propel the LEI and vLEI adoption into new and
emerging markets include the fight against financial
crime and fraud prevention in cross-border payments, and
international trade and supply chains among many more.
A decade of GLEIF: celebrating
past success and greeting future
opportunities
GLEIF enters its tenth anniversary year in 2024. While there will
be celebrations to mark the ten-year anniversary, it will also be
a year of significant transition. Our esteemed CEO, Stephan
Wolf, is stepping down from his GLEIF role this summer. He has
served GLEIF since its inception and has devoted his professional
energies over the past ten years to creating a stable and global
ecosystem that enables the implementation of a unique and
universal entity identifier that has been harnessed for public
good across the globe. On behalf of the Board and my GLEIF
colleagues, I wish to offer Stephan heartfelt thanks for his
contribution to GLEIF over the years and wish him future success
and prosperity. The leadership transition process is already
underway, and I look forward to introducing GLEIF’s new CEO
who will lead us as we embark on our next chapter.
As GLEIF ends the year with progress made on many fronts, I
want to acknowledge that success is driven enthusiastically by
an ecosystem of invested stakeholders including LEI Issuers,
Registration Agents and Validation Agents, the Regulatory
Oversight Committee (ROC), the GLEIF Board, and my GLEIF
colleagues around the world, who comprise the GLEIS. I would
like to thank these and other stakeholders and users of the LEI
for working tirelessly to evolve and expand the GLEIS to enable
broader use and adoption of the LEI and vLEI. Your contributions
and commitments are greatly appreciated.
We are proud of the strides GLEIF made this year and are
excited about the possibilities that lie ahead. As we continue to
promote the use of LEIs within cross-border payments, trade
financing, supply chains and various other applications, we
will also continue to expand the vLEI ecosystem and facilitate
the LEI issuance process, by expanding our Validation Agent
network globally. I am honoured to be part of such a dynamic
and purpose-driven organization and look forward to working
with my colleagues and stakeholders to guide GLEIF toward the
opportunities and through the challenges that the year ahead
will bring.
Teresa A Glasser
Chair of the Board of Directors,
Global Legal Entity Identifier
Foundation (GLEIF)
2023 Annual Report
4
Stephan Wolf
Chief Executive Officer,
Global Legal Entity Identifier
Foundation (GLEIF)
CEO’s Statement
2023 was a progressive year which brought us closer to a
future where mass LEI adoption underpins broad public good.
Significant ground was gained thanks to powerful advocacy
for LEI usage across new markets and applications. Support
from high-profile champions, and GLEIF’s ongoing commitment
to delivering an entity identity management ecosystem that
responds to the needs of all, resulted in the GLEIS becoming
stronger and more relevant than ever.
LEI adopted in ISO 20022
payments messages
One of GLEIF’S most notable achievements this past year
has been to gain the payment industry’s acceptance and
impending adoption of the LEI as a critical tool in the global
fight against financial crime and fraud prevention. This is
thanks to the interoperability and transparency it provides
in cross-border payment flows. Through a sustained industry
engagement program, and against the backdrop of Financial
Stability Board (FSB) endorsement for the LEI in cross-border
payments, GLEIF galvanized advocacy at the most influential
levels in 2023:
•
GLEIF worked with leading payments industry stakeholders,
including Bloomberg, the London Stock Exchange,
and Moody’s, to demonstrate the value the LEI brings
to non-financial corporates and financial institutions
when transmitted in cross-border payment flows.
•
Project Aurora - an analysis by the BIS Innovation Hub
- identified ‘data quality and standardization of the
data identifiers and fields’ contained within the payment
messages as important factors in detecting financial crime.
A proof-of-concept acknowledged that greater use of the
LEI could support the development of data standards. This
supported findings from the Financial Action Task Force
(FATF), which identified data-sharing, data standardization,
and advanced analytics as underpinning effective anti-
money laundering (AML) and counter-terrorist financing
initiatives across borders.
•
The BIS CPMI published its ‘Harmonized ISO 20022 data
requirements for enhancing cross border payments’.
Following industry feedback, the CPMI recognized the
LEI as an equivalent identifier to the BIC for identifying
financial institutions and legal entities within a payment
message. The report was supported by the Bank of England,
Chinese Cross-border Interbank Payment System (CIPS),
European Central Bank and the Reserve Bank of Australia,
among others.
•
The Wolfsberg Group published its updated Payment
Transparency Standards, which support the use of the
LEI within ISO 20022 payments messages to enhance
the accuracy of identification information.
The unprecedented levels of support secured for the LEI
within the payments world last year, culminating in its
inclusion as a data field in ISO 20022 payments messages,
signals that it’s now only a matter of time before we see its
mass use in cross-border payments. Acceptance on this scale
is transformative; payment industry endorsement for the
LEI’s ability to help prevent financial crime and fraud
strengthens its case as a solution to other global challenges
faced across the economy.
Growing momentum for LEI in
trade finance and supply chains
Elsewhere, advocacy is building for the LEI’s potential to help
simplify complex and opaque supply chains and support the
digitalization of global trade. Last year advances were made
on both fronts:
•
GLEIF, the UNDP and the MAS, collectively signed a
statement of intent to embark on an initiative to develop
digital ESG credentials for micro, small and medium-sized
enterprises (MSMEs) worldwide. Known as Project Savannah,
this initiative establishes universal ESG metrics for global
MSMEs. It allows MSMEs to create unique LEIs and digital
credentials, improving access to green finance.
•
GLEIF contributed to the World Trade Board’s Financial
Inclusion in Trade Roadmap, to promote the benefits that
a unique entity identifier, such as the LEI, could bring in
supporting the financial inclusion among MSMEs globally.
•
I have been co-chairing the Digital Standards Initiative
(DSI) Trusted Technology Environments Working Group
throughout 2023. This working group supports the
development and implementation of recommendations for
the International Chamber of Commerce (ICC) Industry
Advisory Board. The group published a paper, Trust in Trade,
in 2023, which recognized verifiable trust as a foundational
digital layer that underpins global supply chains.
•
Last but not least, I was appointed as member of the Board
of ICC Germany, the German national committee of ICC.
Reflections on a decade of
GLEIF leadership and the digital
strategy with the vLEI
After a decade of incredible experiences and achievements, I
will officially step down from my role as GLEIF CEO in June 2024.
I am privileged and proud to have led GLEIF from its infancy to
the thriving and successful organization it has become today. As
we enter 2024, GLEIF’s tenth anniversary year, the organization
and its cause stand stronger than ever, and our teams are fully
committed to navigating the exciting opportunities ahead.
GLEIF has had many successes, most recently reflected in our
digital strategy. The introduction of the vLEI has opened new
avenues for growth and possibilities. The European Banking
Authority (EBA) published a discussion paper on Pillar 3 data
hub processes, and possible practical implications for the
regulatory uses cases, on how to solve organisational identity
and authentication challenges in the context of supervisory
reporting, with the Pillar 3 data hub as a relevant use case.
The Pillar 3 data hub is a key strategic project that will provide
a single access to the disclosures data by all institutions of the
European Economic Area (EEA). The discussion paper included
a section on the vLEI. The vLEI was proposed within an EBA use
case for regulatory reporting as a possible scalable and secure
solution for the efficient submission of Pillar 3 data by large and
other institutions on the European Centralized Infrastructure
of Data (EUCLID) platform.
EBA and GLEIF are currently carrying out the Pillar 3 pilot project
in collaboration with 17 banks. This initiative aims to validate the
end-to-end process from the initial onboarding of banks through
to them being provided with digital wallets, and the integration
of vLEI into the EUCLID regulatory reporting portal.
I offer my sincere gratitude to all of my GLEIF colleagues and
the GLEIS stakeholders who have helped make my tenure at
the helm of GLEIF a successful and fulfilling one. The future of
the LEI/vLEI holds great promise, and I am confident that GLEIF
will thrive under the capable leadership that will guide us into
the next chapter. Thank you for your continued support.
2023 Annual Report
5
The LEI in 2023
Active LEIs by region:
LEI volumes hit a record high in 2023
2.41
million
active LEIs
globally
37
by the end
of 2023
240,000+
LEIs issued
in 2023
11%
annual growth
rate*
249
jurisdictions
with LEI
services
As of 2023, Dec, 31
New collaborations
and partners broadened
the scope of the
Global LEI System:
New mapping partnerships
New Validation Agents
Total LEI issuers
*The annual growth rate is based on new issuance in 2023 compared with total number of active LEIs in 2022.
Americas
428,749
Europe
1,606,461
Africa
10,776
Oceania
37,093
Asia
325,897
2023 Annual Report
6
Top 5 countries by LEI issuance:
285,797
US
190,368
Germany
183,924
UK
181,753
Italy
151,900
Spain
Top 5 countries by renewal rate
1
:
94.5%
Hungary
91.8%
Japan
84.6%
Finland
79.5%
Germany
79.4%
India
Top LEI growth jurisdictions in 2023:
5 most competitive markets
2
:
New data available in the Global LEI System
At the end of 2023 there were:
• Approx. 6,000 government entities
• Approx. 131,000 legal entities reporting fund relationships
• 38 international organizations
Luxembourg PortugalBulgaria Hong Kong Belgium
1
Renewal rates
Renewal means that the reference data,
i.e., the publicly available information on
legal entities identifiable with an LEI, is
re-validated annually by the managing LEI
issuer against a third-party source.
2
Competitive markets
So called ‘competitive markets’ refer to
those with over 1,000 LEIs, based on the
number of LEI issuers providing services
in the jurisdiction. The most competitive
markets are those with the most LEI issuers
per jurisdiction, with similar market share.
The LEI in 2023
Continued growth across
the Global LEI System
Global trends in LEI issuance
6
+19.3%
Iceland
+20.6%
United Arab
Emirates
+19.5%
+35.9%
+58.3%
Saudi Arabia
India
Hungary
2023 Annual Report
Regulation 2023:
A Driving Force Behind
Global LEI Adoption
Advocacy for the LEI from within the global regulatory
community is stronger than ever and continues to expand
across jurisdictions and markets. Influential support has
been secured for LEI use as a required or recommended
component of entity identity management systems. As
a result, the LEI now brings trust and transparency to an
unprecedented number of regulated activities globally.
➜ Capital markets
➜ Trade and transactions
➜ Customs
➜ Payments
➜ Crypto-assets
➜ Digital finance
➜ Supervisory reporting
➜ Non-financial reporting
➜ Insurance
➜ Corporate debt lending
➜ Anti-money laundering
➜ Financial Data Transparency Act (US)
➜ Open finance
➜ Alternative Investment Funds
➜ Crypto asset service provider transparency
➜ Trade and technology
➜ Trust services
➜ OpenCorporates ID
➜ S&P Global Company ID
➜ SWIFT's MIC and BIC
➜ ANNA
➜ ISIN
Additionally, GLEIF and Open Ownership collaborate to
allow easy identification of corporate beneficial owners
and controllers by facilitating mapping to datasets, such as
sanctions, watch and Politically Exposed Person (PEP) lists.
GLEIF actively participates in relevant public
consultations published by regulators and organizations
to highlight the added value of the LEI. GLEIF prioritizes
this activity to raise awareness of the LEI and further
drive its global use. In 2023, GLEIF responded to 36
consultations across 8 jurisdictions.
Advancing regulatory support drove momentum in the
market. GLEIF supported many pilots which demonstrated
the value of the LEI when transmitted in cross-border
payment flows. Five use cases were identified: screening;
Know Your Customer (KYC) and client onboarding; fraud
detection and fight against vendor scams; e-invoice
reconciliation; and account-to-account validation.
Spotlight on financial
fraud prevention:
The LEI in cross-border payments
Champions include:
➜ The FSB
➜ BIS Innovation Hub
➜ The BIS CPMI
➜ The Wolfsberg Group
➜ Swift Payments Market Practice Group
➜ The FATF
➜ Bank of England
➜ CIPS
➜ Bloomberg
➜ C2FO
➜ Ceviant
➜ Element22
➜ Finema
➜ Legal Entity Identifier
India Limited
➜ Moody’s
➜ Open Ownership and
Open Sanctions (The
Transparency Fabric)
➜ REGTEK (Beijing)
Technologies
➜ The London Stock
Exchange
➜ WM Datenservice
➜ Japan eSeal
Consortium
(Hitachi, Ltd.; Secom
Trust Systems Co., Ltd.;
Seiko Solutions Co., Ltd.;
Keio University; TEIKOKU
DATABANK, LTD. InfoCert
S.p.A.; Société Internationale
de Télécommunications
Aéronautique)
Pilots were initiated with:
Public consultations
7
The LEI is a key data and identity
connector that enables critical data sets
to be efficiently matched. It is mapped
to the following identifiers to provide a
holistic view of an organization:
The LEI is being used by regulators
worldwide to verify counterparty
identification related to:
Moving into 2024, and beyond,
the LEI is poised to support additional
use cases including:
2023 was a milestone year for the LEI in cross-border
payments. Industry advocacy for the inclusion of the
LEI within ISO 20022 payment messages promises
to support faster, cheaper, more transparent
and inclusive cross-border transactions.
2023 Annual Report
8
Recognition for the
LEI as a public good
The LEI was introduced to increase transparency within the
global marketplace. From the outset, its endorsers, including
the G20 and the FSB, aspired for it to become a broad public
good. 2023 was a transformative year in meeting that goal.
Regulatory support and developments within the global
payments community pushed forward to advance the public
good on two levels:
•
The fight against financial crime:
The BIS and the FATF identified data sharing, data
standardization and advanced analytics as key
components of effective initiatives to fight financial crime
across borders. Thanks to a proof-of-concept undertaken
as part of BIS’ Project Aurora, there is now widespread
recognition that the LEI can be leveraged to support
data standards and mitigate AML and Counter-Terrorist
Financing (CTF) risks.
GLEIF also collaborated with Open Ownership and
OpenSanctions in the Transparency Fabric, an initiative
that uses the LEI to reduce illicit finance risks particularly
in the context of cross-border and instant payments.
Sanctions and AML screening techniques were enhanced
by the integration of standardized and high-quality LEI
data into sanctions and PEP lists to expose links with other
entities. Mapping the LEI to both Open Ownership and
OpenSanctions data makes it significantly easier to trace
parties engaged in money laundering, terrorist financing
and sanctions evasion.
2024: Strategic
Milestones
The value of the LEI in Cross-Border Payment Flows
•
Prevention against financial fraud:
CPMI and Wolfsberg Group support led to the inclusion
of the LEI as a data field within ISO 20022 payments
messages in 2023. The Wolfsberg Group is an association
of 12 global banks which aims to develop frameworks and
guidance for the management of financial crime risks.
When the LEI is added as a data attribute in payment
messages, any originator or beneficiary legal entity can
be precisely, instantly, and automatically identified across
borders, supporting enhanced fraud prevention efforts.
Elsewhere, the LEI has been recognized for its potential to
enhance transparency within sustainability reporting and
GLEIF was involved in a number of initiatives throughout
the year. One such initiative saw GLEIF collaborate with the
UNDP and the MAS to initiate a project to digitize basic ESG
credentials for MSMEs. The three parties signed a statement
of intent to work together on Project Savannah, an initiative
that aims to help simplify the ESG reporting process for
MSMEs by leveraging digital initiatives such as MAS’ Project
Greenprint
1
to generate ESG data credentials that can be
housed in MSMEs’ LEI records.
This will enable MSMEs to transmit verified entity information
and key ESG data to their business partners, strengthening
their ability to gain access to global financing and supply
chain opportunities.
LEI mandates strengthen regional volumes
The highest LEI growth rates in 2023 were reported in Saudi
Arabia and India, with growth of 58.3% and 35.9% respectively.
Both countries have a key driver in common – their central
banks mandating greater use of the LEI. In Saudi Arabia,
the number of LEIs issued has been steadily increasing in
recent years, largely thanks to coordinated efforts by the
Saudi Credit Bureau (SIMAH) and the Saudi Central Bank
to encourage financial sector players to obtain an LEI.
The Reserve Bank of India (RBI) has also been a pivotal force
for the success of the LEI in the Indian market, proactively
driving an advanced regulatory agenda over several years.
Following a string of RBI mandates dating back to 2017, which
have embedded the LEI at the heart of the Indian economy as
a critical business enabler, regulatory momentum continued
in 2023. In a move heralded by the RBI as an important
measure to promote stability and resilience across the Indian
financial system, the Securities Exchange Board of India (SEBI)
mandated the LEI for issuers of listed or proposed to list
non-convertible securities, securitised debt instruments, and
security receipts. Furthermore, SEBI directed the depositories
One global identity behind every business.
Inspired by this singular purpose, GLEIF
made a powerful impact in 2023.
The organization successfully supported regulatory
consultations and voluntary deployments across
diverse use cases and geographies, enabling the LEI to
benefit new markets. The GLEIS was strengthened and
extended, resulting in expanded utility and relevance.
Importantly, a critical mass of support was secured
for the LEI’s value as a public good in aiding the fight
against financial crime and preventing fraud. The pace
of industry momentum behind the use of the LEI in
financial flows is a testament to its vast potential to
strengthen the world’s defenses against cross-border
criminality.
1
Project Greenprint is a collection of initiatives that aims to harness technology and data to enable
a more transparent, trusted and efficient ESG ecosystem to enable green and sustainable finance.
Automated Enterprise Resource
Planning (ERP) system supplier
verification with digital credentials
with LEI embedded
Automated search of LEI
Index to gain rich, verified
data about legal entity
Verification via digitally
signed e-invoice with LEI
embedded
Ensures the LEI associated
with the account being
credited matches the
payment information
2023 Annual Report
9
to map the LEI code of issuers to their existing or newly issued
ISIN. SEBI also mandated an active LEI for non-individual
foreign portfolio investors (FPIs).
Elsewhere, the UK’s central bank, the Bank of England,
introduced the LEI into ISO 20022 payment messages for
its Clearing House Automated Payment System (CHAPS)
real-time gross settlement system on an ‘optional to send’
basis in June 2023. The bank has encouraged all CHAPS Direct
Participants – which include traditional high-street banks and
a number of international and custody banks – to start using
LEIs as early as possible.
Yet it’s not just central banks driving regional interest and
mandates in key territories. The US Customs and Border
Protection’s Global Business Identifier (GBI) initiative got
underway in 2023. The aim is to develop a single identifier
solution that: improves the US Government’s ability to
pinpoint high-risk shipments and facilitate legitimate
trade; creates a ‘common language’ between government
and industry; and improves data quality and efficiency for
identification, enforcement, and risk assessment. Three entity
identifiers, including the LEI, are being tested to determine
the optimal combination. The outcome of this, and the
impending Financial Data Transparency Act in 2024, could
have a significant impact on future LEI volumes in the US.
Advancing cross-border digital trust
GLEIF’s digital strategy for the LEI centers on two methods
for cryptographically binding the LEI to its organization:
digital certificates and verifiable credentials (the vLEI).
While GLEIF continued to work on expanding the vLEI
infrastructure, an exciting development in 2023 advanced
the use of the LEI within digital certificates.
TrustAsia became the first Certificate Authority (CA) to issue
a Secure/Multipurpose Internet Mail Extensions (S/MIME)
Certificate with an embedded LEI. At the simplest level, this
allows the authenticity and integrity of an email account
associated with a legal entity to be validated. S/MIME is
an established, widely used protocol for sending digitally
signed and encrypted email messages. An S/MIME Certificate
contains a public key bound to an email address and may
also contain the identity of a natural person or legal entity
that controls such email address. This can then be used to
authenticate the individual or legal entity that sends an email
and ensure it has not been tampered with by a third-party.
Embedding LEIs into S/MIME Certificates offers myriad
benefits. It provides an additional layer of trust since the
LEI is a global secure mechanism that provides reliable
data on organizational identity. S/MIME Certificates with
embedded LEIs also provide a direct link to the regularly
updated LEI reference data via the Global LEI Index to enable
more automated, consistent data checks, regardless of the
organization’s location. The result is a robust and reliable
validation of an organization’s data, together with the
identity of those acting on behalf of the company.
Strengthening the Global LEI System
The GLEIS grew stronger in 2023, with new partnerships and
collaborations extending the reach and relevance of the LEI
to new audiences.
•
VerifyVASP became GLEIF’s newest Validation Agent, and
the first to operate exclusively in the crypto and digital asset
trading space. In this role, VerifyVASP can help obtain LEIs
for its Virtual Asset Service Provider (VASP) clients quickly
and efficiently, supporting increased transparency in crypto
and digital asset trading markets. This development helps to
deliver early FATF Travel Rule compliance for VASPs. The FATF
Travel Rule (Recommendation 16) is a crucial part of the FATF’s
Recommendations, which set out a framework of measures
that countries should implement in order to combat money
laundering and terrorist financing, as well as the financing
of proliferation of weapons of mass destruction. The Travel
Rule aims to mitigate the risks associated with the transfer
of virtual assets, especially in ownership identification. It
achieves this by mandating financial institutions and crypto
firms involved in virtual asset transfers to acquire and
exchange precise and reliable details of the originator and
beneficiaries of the transaction before or during the transfer.
•
GLEIF became an Associate Partner of the EU Digital
Wallet Consortium (EWC), which is a joint effort to leverage
the benefits of the proposed EU digital identity in the
form of Digital Travel Credentials across EU Member
States. The EWC intends to build on the Reference Wallet
Application to enable a use case focused on Digital Travel
Credentials. GLEIF expects this use case to necessitate the
use of multiple electronic attestation of attributes and
credentials as well as the involvement of both the private
sector and the public sector. GLEIF has therefore joined
the consortium to explore compliance of the vLEI with the
EU Digital Identity (EUDI) wallet.
What is the Global LEI System?
The GLEIS is the infrastructure that enables LEIs to be
issued to legal entities globally. The GLEIS operates in
three-tiers:
•
The Regulatory Oversight Committee (ROC) is a
group of more than 65 financial market regulators
and other public authorities and 19 observers from
more than 50 countries. It promotes the broad
public interest by improving the quality of data used
in financial data reporting, improving the ability
to monitor financial risk, and lowering regulatory
reporting costs through the harmonization of these
standards across jurisdictions. It oversees GLEIF to
ensure it upholds the principles of the GLEIS.
•
GLEIF supports the implementation and use of
the LEI. It makes available the Global LEI Index
which is the only global online source that provides
open, standardized and high-quality legal entity
reference data. It also provides services that ensure
the operational integrity of the GLEIS, such as the
accreditation of LEI issuing organizations.
•
LEI issuing organizations are accredited by GLEIF to
supply registration, renewal, and other services, and
act as the primary interface for legal entities wishing
to obtain an LEI.
•
GLEIF has become an Associate Sponsor of the
OpenWallet Foundation (OWF), which is a consortium of
companies and non-profit organizations collaborating to
drive global adoption of open, secure, and interoperable
digital wallet solutions. It also provides access to expertise
and advice through its Government Advisory Council. As
an advocate for these values, GLEIF’s collaboration with
the OWF included contributing to the Architecture Special
Interest Group and Credential Format Comparison Special
Interest Group.
2023 Annual Report
10
2023 Annual Report
10
Global Legal Entity Identifier Foundation (GLEIF)
Basel, Switzerland
Consolidated
Financial Statements 2023
for the Period from January 1 to December 31, 2023
Notes Jan. to Dec. 2023 Jan. to Dec. 2022
US$ US$
Fee revenue 3.1 1 5 , 52 6 ,924 14 , 3 82, 820
Wages and salaries -8,3 44,3 53 -7 ,301,04 1
Social contributions and expenses for pensions and care -1 ,0 5 5 , 2 07 -911, 79 2
Personnel expenses 3.2 -9, 3 9 9, 5 6 0 -8, 2 12, 83 3
Other operating expenses 3.3 -4,917 ,857 -4 , 0 8 8 ,91 7
Other operating income 3.4 198, 386 1 03, 333
Amortization and depreciation expense 4.5/4.6/4.7 -1,7 12,726 -1,59 2,50 1
Operating surplus / (loss) -304 ,833 59 1,9 02
Subsidies and donations 3.5 1, 217 5 ,031
Financial income / expense 3.6 24 ,7 38 -3 5 9, 4 8 0
Net surplus / (loss) -278, 878 237 ,453
Changes of components of net equity from actuarial gains and losses in pension
and similar obligations
3.2 -2 5 , 8 1 4 -4,7 39
Items that will not be reclassified to net surplus -2 5 , 8 1 4 -4,7 39
Other comprehensive income -2 5 , 81 4 -4 ,739
Total comprehensive income -3 04 , 692 232 ,7 14
Statement of Comprehensive Income
for the Period from January 1 to December 31, 2023
2023 Annual Report
11
Assets Notes Dec. 31, 2023 Dec. 31, 2022
US$ US$
Receivables from LEI issuers 4.1 2,010 , 929 2, 37 3 , 249
Current financial assets 4.2 11 ,54 5 11,8 86
Other assets 4.3 45 6 ,9 74 330, 606
Cash and cash equivalents 4.4 11 ,82 8, 6 49 11,27 5,6 46
Current assets 14, 308,097 13,991,3 87
Intangible fixed assets 4.5 1,49 4, 9 22 1,689,213
Tangible assets 4.6 224 , 5 29 205 ,2 99
Long-term financial assets 4.2 141 , 4 4 0 136 ,52 5
Right-of-use assets 4.7 3,062,0 04 3 , 4 7 7, 2 0 4
Non-current assets 4 ,922 , 89 5 5, 5 08 , 2 41
Balance Sheet
as at December 31, 2023
Liabilities and equity Notes Dec. 31, 2023 Dec. 31, 2022
US$ US$
Payables due to vendors 4.8 5 9 9, 8 3 0 80 2,608
Liabilities due to Board
Directors
6.1 15 ,395 15,518
Deferred revenue 4.9 24 4 , 67 3 0
Current financial liabilities 4.10 6 9 7,1 2 7 1 ,12 4 ,12 8
Other payables 4.11 1 ,9 0 7, 4 6 0 1,7 10,032
Deferred subsidies 3.5 0 1, 217
Current liabilities 3,464,485 3,653,503
Provision for pension costs 3.2 7 9, 2 1 3 45,01 0
Long-term financial liabilities 4.10 2,6 80, 463 2 , 4 8 9, 5 92
Non-current liabilities 2 ,759,676 2 , 53 4 , 602
Paid-in Foundation capital 55 ,92 7 55 ,92 7
Other reserves -2 ,12 5 23 ,689
Retained surplus 12 ,9 53 , 02 9 1 3 , 2 3 1 ,9 07
Organizational capital 4.12 13,006,831 13, 311,523
2023 Annual Report
12
Cash Flow Statement
for the Period from January 1 to December 31, 2023
Notes Jan. to Dec. 2023 Jan. to Dec. 2022
US$ US$
Net surplus / (loss) -278, 878 2 3 7, 4 5 3
Amortization and depreciation expense 1,7 12,7 26 1,5 9 2,50 1
Increase (decrease) of provisions 75 3 , 415
(Gains) / losses from the disposal of fixed assets -497 -6 , 420
Financial income / expense 6, 528 126 , 290
Other non-cash expenses and income -36 ,72 9 233 ,54 7
Decrease / increase of receivables and other current assets 303 , 5 07 -528,015
Increase / decrease of liabilities to vendors and other operating (non-financial) liabilities 173 , 37 1 -203,8 73
Interest received 8 9,1 5 8 4 ,94 2
Cash flow from operating activities 1 ,9 6 9, 2 6 1 1 , 4 5 9, 8 4 0
Receipts from the disposal of intangible and tangible fixed assets and right-of-use assets 3, 587 20, 239
Acquisition of intangible and tangible fixed assets and right-of-use assets 4.5/4.6/4.7 -4 3 1,9 4 4 -7 5 6 , 6 13
Acquisition / settlement of financial assets 4.2 8 ,1 5 7 -1 ,94 2
Cash flow from investing activities -420,200 -7 3 8 , 3 16
Repayment of lease liabilities -1 ,0 9 4 , 5 9 0 -1,007,066
Proceeds from other (non-lease) financial liabilities 17 ,794 -1 , 8 1 6
Interest paid -94,767 -1 31 ,1 8 5
Cash flow from financing activities -1, 171,563 -1 ,1 4 0, 0 67
Total cash flow effects on cash and cash equivalents 3 7 7, 4 9 8 -418,543
Effect of changes in exchange rates on cash and cash equivalents 175,505 -49 9, 6 0 0
Cash and cash equivalents at beginning of period 11, 275,6 46 12 ,1 93 , 7 89
Cash and cash equivalents at end of period 4.4 11,8 28, 649 11, 275,6 46
2023 Annual Report
13
Statement of Changes in Organizational Capital
Paid-in foundation
capital
Other reserves,
actuarial gains
and losses from
pension obligations
Retained surplus Organizational
capital
US$ US$ US$ US$
Balance as of December 31, 2021 55 ,92 7 28,428 12 ,9 94 , 45 4 13,07 8,809
Net surplus / (loss) 0 0 2 3 7, 4 5 3 2 3 7, 4 5 3
Other comprehensive income 0 -4,7 39 0 -4,7 39
Total comprehensive income 0 -4,7 39 2 3 7, 4 5 3 232 ,7 14
Balance as of December 31, 2022 55 ,92 7 23, 689 13,231,907 13,311, 523
Net surplus / (loss) 0 0 -278, 878 -278,878
Other comprehensive income 0 -2 5 , 8 1 4 0 -2 5 , 8 1 4
Total comprehensive income 0 -2 5 , 8 1 4 -278, 878 -30 4, 692
Balance as of December 31, 2023 5 5 ,927 -2 ,1 2 5 12 ,95 3 ,029 13,006,831
2023 Annual Report
14
2023 Annual Report
15
Notes to the Consolidated Financial Statements
1. Information on GLEIF
The accompanying consolidated financial statements present the operations of Global Legal
in Basel, Switzerland and its subsidiary (together referred to as the "GLEIF Group”).
GLEIF is a foundation according to Swiss civil law and registered under no. CHE-200.595.965 in
the commercial register of Basel-Stadt, Switzerland . The address of the Foundation is St. Alban-
establishment in Frankfurt am Main, Germany, where the main operating activities of the
Foundation are located.
The establishment of this system has been required by the Heads of State and Government of
the Group of Twenty, calling the Financial Stability Board to coordinate the work among the
regulatory bodies. Prior to the foundation of GLEIF, the Financial Stability Board established
the Regulatory Oversight Committee (“LEI ROC”), which had set forth requirements for the
structure of the Global LEI System and for the managing, monitoring, and standard-setting
functions, as well as the internal structure and the funding of GLEIF. The LEI ROC has, as
stipulated in Article 4 of the GLEIF Statutes, the regulatory oversight of the Global LEI System,
including the activities of GLEIF in the broad public interest.
GLEIF is under supervision of the Swiss Supervisory Board of Foundations since the
establishment of GLEIF in June 2014.
The consolidated financial statements were authorized for publication by the Board of
Directors on May 23, 2024.
2. 2 Basis of Presentation and Summary
of Material Accounting Policies
2.1 General
These consolidated financial statements have been prepared in accordance with IFRS
Accounting Standards as issued by the International Accounting Standards Board (IASB).
GLEIF also prepares a set of statutory financial statements in accordance with the Swiss
Code of Obligations.
These consolidated financial statements are presented in U.S. dollars (US$), with rounding
to the nearest dollar, unless otherwise stated.
The consolidated financial statements are prepared on the historical cost basis, unless
otherwise stated in the accounting policies.
The accounting policies set out below are unchanged from the prior period and have been
applied consistently throughout both periods.
2.2 Basis of consolidation
The consolidated financial statements comprise the financial statements of GLEIF and its
subsidiary as at 31 December 2023. Control is achieved when the GLEIF Group is exposed, or
has rights, to variable returns from its involvement with the investee and has the ability to
affect those returns through its power over the investee. Specifically, the GLEIF Group controls
an investee if, and only if, the GLEIF Group has:
•
Power over the investee (i.e., existing rights that give it the current ability to direct the
relevant activities of the investee);
•
Exposure, or rights, to variable returns from its involvement with the investee;
•
The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights results in control. To support
this presumption and when the GLEIF Group has less than a majority of the voting or similar
rights of an investee, the GLEIF Group considers all relevant facts and circumstances in
assessing whether it has power over an investee, including:
2023 Annual Report
16
•
The contractual arrangement(s) with the other vote holders of the investee;
•
Rights arising from other contractual arrangements;
•
The Group’s voting rights and potential voting rights.
Based on corporate governance and any additional agreements, companies are analyzed for
their activities and variable returns, and the link between the variable returns and the extent to
which their relevant activities could be influenced.
The GLEIF Group re-assesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control. Consolidation
of a subsidiary begins when the GLEIF Group obtains control over the subsidiary and ceases
when the GLEIF Group loses control of the subsidiary. Assets, liabilities, income and expenses of
a subsidiary acquired or disposed of during the year are included in the consolidated financial
statements from the date the GLEIF Group gains control until the date the GLEIF Group ceases
to control the subsidiary.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies in line with the GLEIF Group’s accounting policies. All intra-group assets and
liabilities, equity, income, expenses and cash flows relating to transactions between members of
the GLEIF Group are eliminated in full on consolidation.
If the GLEIF Group loses control over a subsidiary, it derecognizes the related assets (including
goodwill), liabilities, non-controlling interest and other components of equity, while any
resultant gain or loss is recognized in profit or loss. Any investment retained is recognized at
fair value.
Scope of consolidation
As of December 31, 2023, the GLEIF Group consists of GLEIF and its subsidiary "GLEIF Americas,
a New Jersey nonprofit corporation" (hereinafter: "GLEIF Americas") with its registered seat
in Jersey City, New Jersey, United States of America. The subsidiary was incorporated on May
1, 2020 and is consolidated since then. Article 3.01 of the bylaws states that at each time the
majority of the board members must be affiliated with GLEIF. The members of initial board of
trustees are officers and employees of GLEIF. Board members are elected or re-elected by the
majority of the existing trustees.
2.3 Foreign currency
The functional currency of GLEIF is the U.S. dollar, as the Foundation generates its revenues
and receives almost all cash flows from the LEI issuers (also referred to as Local Operating Units
("LOUs")) in this currency. The functional currency of GLEIF Americas is the U.S. dollar as well.
Transactions that are denominated in a currency other than U.S. dollar are recorded at the spot
exchange rate on the date when the underlying transactions are initially recognized. At the
end of the reporting period, foreign currency-denominated monetary assets and liabilities are
retranslated into U.S. dollars, applying the spot exchange rate prevailing at that date. Gains
and losses arising from these foreign currency revaluations are recognized in financial income /
expense.
The exchange rates of the most significant foreign currencies are:
Dec. 31, 2023 Dec. 31, 2022
US$ US$
Swiss Franc to U.S. dollar 1.1933 1.0832
Euro to U.S. dollar 1.1050 1.0666
2.4 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable net of
discounts and rebates and excluding taxes or duty. Revenue is recognized over the term of the
license period on an accrual basis.
The revenue of GLEIF is based on arrangements with the LEI issuers to pay to GLEIF a fixed
service fee for each LEI issued and served by the respective issuer.
The license period of a LEI is one year from the date of issuance or renewal. During this period,
the LEI issuers are responsible for managing and maintaining the integrity and accuracy of
the LEI entry data and of the associated changes. The services provided by GLEIF to the LEI
issuers relate to quality assurance, standardization, and certain other work with regard to the
LEI issuers’ management of LEIs. Accordingly, the revenue of GLEIF is related to the service
periods of the LEIs. On a straight-line basis, GLEIF recognizes the revenue over the terms of the
contracts between the LEI issuers and the LEI users, and defers the revenue that is allocated to
the portion of the LEI service periods remaining after the balance sheet date. The outstanding
portion of the LEI service periods is estimated based on quarterly performance reports of
each LEI issuer. If the arrangement with a LEI issuer is terminated, the LEI issuer is charged the
outstanding service fees until the respective end of the license periods of the managed LEIs.
Under the “master agreement” arrangement, the LEI issuer pays a quarterly service fee based
on all active LEIs under its management at the end of the quarter. For service fees under this
agreement, GLEIF only reflects in the balance sheet and as revenue 50 % of the quarterly
service fee for new / renewed LEIs during the quarter. The remaining 50 % that has neither
been earned nor billed at the end of the quarter is not shown in the balance sheet and only
recognized in the subsequent quarter.
2023 Annual Report
17
2.5 Government grants
A government grant or assistance is recognized only when there is reasonable assurance that
the relevant group entity will comply with any conditions attached to the grant and the grant
will be received. The grant is recognized as income over the period necessary to match with
the related costs, for which they are intended to compensate, on a systematic basis. A grant
receivable as compensation for costs already incurred or for immediate financial support, with
no future related costs, is recognized as income in the period in which it is receivable. A grant
relating to assets (capitalized expenditure) is recognized as deferred income (liability), and
released in accordance with the amortization of the related assets.
2.6 Interest
Interest income and expense are recognized using the effective interest method. The effective
interest rate is established on initial recognition of the financial asset or liability and is not
revised subsequently.
2.7 Income taxes
Since 2015, the Foundation’s activities are located in Basel, Switzerland and in Frankfurt am
Main, Germany. GLEIF is free from Swiss income taxes based on an assessment of the tax
authority Basel-Stadt, Switzerland. In Germany, the activities of GLEIF to manage and
monitor the Global LEI System are free from corporate and trade tax on income by law.
GLEIF Americas is exempt from federal income tax under Internal Revenue Code (IRC)
Section (c)(3).
2.8 Provisions
A provision is recognized in the balance sheet when a group entity has a present legal or
constructive obligation as a result of a past event, it is probable that an outflow of economic
benefits will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation. If the effect is material, provisions are recognized at present value by
discounting the expected future cash flows at a rate that reflects current market assessments
of the time value of money. When a contract becomes onerous, the present obligation under
the contract is recognized as a provision and measured at the lower of the expected cost of
fulfilling the contract and the expected cost of terminating the contract as far as they exceed
the expected economic benefits of the contract. Additions to provisions and reversals are
generally recognized in the income statements.
Provisions for pension obligations are recognized by using the projected unit credit method
based on reasonable assumptions for the long-term expected rate of salary increases and
benefit increases, demographic assumptions, and long-term interest rates as of the balance
sheet date. The related plan assets are recognized at their fair value in accordance with IAS 19.
2.9 Lease commitments
At inception of a contract, the GLEIF Group assesses whether a contract is, or contains, a lease.
A contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
At commencement or on modification of a contract that contains a lease component, the GLEIF
Group allocates the consideration in the contract to each lease component on the basis of its
relative stand-alone prices. However, for the leases of IT equipment for the GLEIF data centers
the GLEIF Group has elected not to separate non-lease components and account for the lease
and non-lease components as a single lease component.
The GLEIF Group recognizes a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term, unless the lease transfers ownership of the
underlying asset to the GLEIF Group by the end of the lease term or the cost of the right-of-use
asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset
will be depreciated over the useful life of the underlying asset, which is determined on the same
basis as those of property and equipment. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease
liability.
The lease liability is initially measured at the present value of the lease payments that are
not paid at the commencement date, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the GLEIF Group’s incremental borrowing rate.
Generally, the GLEIF Group uses its incremental borrowing rate as the discount rate.
The lease liability is measured at amortised cost using the effective interest method. It is
remeasured when there is a change in future lease payments arising from a change in an
index or rate, if there is a change in the GLEIF Group’s estimate of the amount expected to
be payable under a residual value guarantee, if the GLEIF Group changes its assessment of
whether it will exercise a purchase, extension or termination option or if there is a revised in-
substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount
of the right-of-use asset has been reduced to zero.
Short-term leases and low-value leases are recognized as expenses on a straight-line basis.
Lease arrangements with a residual lease term under 12 months on the date of initial
application are treated as short-term leases.
2023 Annual Report
18
2.10 Tangible fixed assets
GLEIF Group tangible fixed asset items are initially measured at cost. Cost includes
expenditures that are directly attributable to the acquisition of each item. Tangible fixed
assets are subsequently measured at cost less accumulated depreciation and any accumulated
impairment losses. Depreciation is charged to allocate the cost of assets less their residual
values over their estimated useful lives, using the straight-line method.
The estimated useful lives of all items of tangible fixed assets are as follows:
Technical and computer equipment 3 to 5 years
Motor vehicles 6 years
Office equipment 6 to 10 years
2.11 Intangible fixed assets
Separately acquired intangible fixed asset items are initially measured at cost. Cost includes
expenditures that are directly attributable to the acquisition of each item. After initial
measurement, intangible fixed assets are measured at cost less accumulated amortization
and any accumulated impairment losses. Amortization is charged on a straight-line basis
over the estimated useful lives of the intangible fixed assets.
The estimated useful lives of intangible fixed assets are as follows:
Software 3 to 5 years
As at the end of current financial year, GLEIF Group did not have intangible fixed assets with an
indefinite useful life.
2.12 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and
a financial liability or equity instrument of another entity. Financial assets of the GLEIF
Group mainly include cash and cash equivalents, long- and short-term security deposits, and
receivables from LEI issuers’ fees. Financial liabilities of the GLEIF Group mainly comprise
payables to vendors and to employees and Board Directors. GLEIF Group does not make use of
the option to designate financial assets or financial liabilities at fair value through profit or loss
at inception (Fair Value Option). Based on their nature, financial instruments are classified as
financial assets, and financial liabilities measured at cost or amortized cost, and financial assets
and financial liabilities measured at fair value.
Financial instruments are recognized on the balance sheet when a group entity becomes a
party to the contractual obligations of the instrument. Regular way purchases or sales of
financial assets, i.e., purchases or sales under a contract whose terms require delivery of the
asset within the time frame established generally by regulation or convention in the market
place concerned, are accounted for at the trade date.
Initially, financial instruments are recognized at their fair value. Transaction costs directly
attributable to the acquisition or issue of financial instruments are only included in determining
the carrying amount if the financial instruments are not measured at fair value through profit
or loss. Subsequently, financial assets and liabilities are measured according to the category
– cash and cash equivalents, loans and receivables, financial liabilities measured at amortized
cost – to which they are assigned.
Cash and cash equivalents
The GLEIF Group considers all highly liquid investments that are readily convertible to known
amounts of cash and that are subject to an insignificant risk of change in value and have less
than three months maturity from the date of acquisition to be cash equivalents. Cash and cash
equivalents are measured at cost.
Loans and receivables
Financial assets classified as loans and receivables are measured at amortized cost using the
effective interest method less any impairment losses. Impairment losses on trade and other
receivables are recognized using separate allowance accounts.
Financial liabilities
The GLEIF Group measures financial liabilities at amortized cost using the effective
interest method.
2023 Annual Report
19
2.13 Accounting pronouncements applied in the
financial statements
GLEIF Group has applied all IFRS accounting pronouncements that are effective for this
reporting period. The GLEIF Group has not adopted any standards that have already been
issued but that are not yet effective for this reporting period. The amendments had no material
effect.
Amendments to
standards
Description
Mandatory
application
IFRS 17
Insurance Contracts, including
amendments to IFRS 17 and
amendments to IFRS 17 Insurance
Contracts: Initial Application of IFRS 17
and IFRS 9 – Comparative Information
Jan. 1, 2023
IAS 1
Amendments to IAS 1 Presentation of
Financial Statements and IFRS Practice
Statement 2: Disclosure of Accounting
Policies
Jan. 1, 2023
IAS 8
Amendments to IAS 8 Accounting
Policies, Changes in Accounting
Estimates and Errors: Definition of
Accounting Estimates
Jan. 1, 2023
IAS 12
Amendments to IAS 12 Income Taxes:
Deferred Tax related to Assets
and Liabilities arising from a Single
Transaction
Jan. 1, 2023
IAS 12
Amendments to IAS 12 Income Taxes:
Temporary relief from accounting for
deferred taxes arising from the OECD’s
international tax reform
Jan. 1, 2023
2.14 Not yet adopted recent accounting pronouncements
The following pronouncements issued by the IASB are not yet effective and have not yet been
adopted by the Foundation:
Pronouncement Description
Mandatory
application
Anticipated
effect
IAS 1
Amendments to IAS 1
Presentation of Financial
Statements: Classification
of Liabilities as Current
or Non-current, including
Deferral of Effective Date,
as well as Non-current
Liabilities with Covenants
Jan. 1, 2024
No material
effect
expected
IFRS 16
Amendments to IFRS 16
Leases: Lease Liability in a
Sale and Leaseback
Jan. 1, 2024
No material
effect
expected
IAS 7, IFRS 7
Amendments to IAS 7
Statements of Cash Flows,
IFRS 7 Financial Instruments
– Disclosures: ‘Supplier
Finance Arrangements’
Jan. 1, 2024
No material
effect
expected
IAS 21
Amendments to IAS 21
The Effects of Changes in
Foreign Exchange Rates:
Lack of Exchangeability
Jan. 1, 2025
No material
effect
expected
2023 Annual Report
20
2.15 Critical accounting estimates
The financial statements are prepared in accordance with IFRS as issued by the IASB.
The material accounting policies, as described above and in this section, are essential to
understanding the GLEIF Group’s results of operations, financial positions, and cash flows.
Some of these accounting policies require critical accounting estimates that involve complex
and subjective judgments and the use of assumptions. Some of these assumptions may be
for matters that are inherently uncertain and susceptible to change. Such critical accounting
estimates may have a material impact on the results of operations, financial positions, and cash
flows.
Revenue recognition on service contracts
The allocation of revenue relating to the Foundation’s service contracts with LEI issuers to
the appropriate accounting periods is based on reasonable estimates of the timing of the
underlying LEI service contracts between the LEI issuers and the LEI users. The Foundation
receives quarterly reports from the LEI issuers detailing the number of LEIs renewed or newly
issued by the LEI issuers. GLEIF has applied estimates, assuming that the issuance and renewal
of each LEI, as well as the related start of a standard one-year service period, are distributed
on a straight-line basis within the reported quarters. Changes in these estimates may lead to an
increase or decrease of revenue.
3. Statement of Comprehensive Income
3.1 Fee revenue
The revenues split in regions (based on the legal seat of the LEI issuers) as follows:
Jan. to Dec. 2023 Jan. to Dec. 2022
US$ US$
Europe 12,921,327 12,090,166
Asia 1,206,216 1,047,770
North and South America 1,323,969 1,171,621
Other regions 75,412 73,263
Fee revenues 15,526,924 14,382,820
While a significant portion of the overall GLEIF fees are from LEI issuers with a legal seat in
Europe, the underlying cash flows of GLEIF are generated by a very geographically diverse
population of LEI registrants. Within Europe, 44.6% of the revenue is concentrated on four LEI
issuers.
3.2 Personnel expenses
Jan. to Dec. 2023 Jan. to Dec. 2022
US$ US$
Wages and salaries 8,344,353 7,301,041
Social contributions and
expenses for pension and care
1,055,207 911,792
Personnel expenses 9,399,560 8,212,833
The personnel expenses consist of the fixed and accrued variable remuneration as well as
the bonus accrual for employees employed by the GLEIF Group. Social, pension, and care
contributions are also included as part of these expenses.
As of year-end 2023, GLEIF Group employed 62 (2022: 59) employees. The average headcount
for 2023 is 61 (2022: 57) employees.
2023 Annual Report
21
Pension plan
Under Swiss law, GLEIF has to arrange for an affiliation contract with a pension fund for the
Swiss employees to comply with legal requirements. The pension fund has to provide at least
occupational benefits according to law.
In 2015, GLEIF set up a pension plan in Switzerland with AXA Vorsorgestiftung as a collective
foundation. Based on the plan rules and pension law in Switzerland, the plan qualifies as a
defined benefit scheme under IFRS. The insurance plan is contribution-based and contains a
cash balance benefit formula. Under Swiss law, the pension fund guarantees the vested benefit
amount as confirmed annually to members.
The collective foundation of AXA guarantees a 40% coverage of the retirement accounts
covered by an insurance policy. The other assets are pooled for all affiliated companies. The
collective foundation can adjust risk and cost contributions according to the circumstances.
The employer has to cover at least half of all contributions. The collective foundation is able
to withdraw from the contract with the employer. In that case, the company needs to affiliate
with another pension institution.