History of the Global LEI System
In the wake of the 2008 financial crisis, regulators worldwide acknowledged their inability to identify parties to transactions across markets, products, and regions. The Financial Stability Board (FSB), together with the finance ministers and central bank governors represented in the Group of 20 (G20), therefore, advocated developing a universal Legal Entity Identifier (LEI) applicable to any legal entity that engages in financial transactions. Implementation of the LEI will increase the authorities’ ability to evaluate systemic and emerging risk, identify trends and take corrective steps.
At its November 2011 Cannes Summit the G20 called upon the FSB to take the lead in developing recommendations for a global LEI and supporting governance structure.
The resulting FSB recommendations were subsequently endorsed by the G20 at its 2012 Los Cabos summit. The ‘G20 Leaders Declaration’ of 19 June 2012 states: “We endorse the FSB recommendations regarding the framework for development of a global LEI system for parties to financial transactions, with a global governance framework representing the public interest. (...) We encourage global adoption of the LEI to support authorities and market participants in identifying and managing financial risks.”
Following up on the recommendations of the FSB, authorities, working with the private sector, have developed the framework of a Global LEI System that provides, through the issuance of LEIs, unique identification of legal entities participating in financial transactions across the globe.
In November 2012, the G20 finance ministers and central bank governors and the FSB endorsed the Charter of the Regulatory Oversight Committee (ROC). The ROC was established in January 2013.
In January 2014, the FSB Plenary, in its capacity as the founder of the Global Legal Entity Identifier Foundation (GLEIF), endorsed nominees to the initial GLEIF Board of Directors. These nominees were recommended to the FSB by the ROC. GLEIF is a not-for-profit organization created to support the implementation and use of the LEI.
The GLEIF Board held its inaugural meeting in Zurich, Switzerland, on 26 June 2014. The Board of Directors subsequently announced the appointment of Stephan Wolf as GLEIF Chief Executive Officer.
The FSB emphasized that global adoption of the LEI underpins multiple “financial stability objectives” and also offers “many benefits to the private sector”.