GLEIF Published the Quarterly Global LEI System Business Report Covering the First Quarter of 2019
The Global LEI System Business Reports highlight main trends relevant to the adoption of the LEI and provide in-depth analysis of the LEI data pool
Author: Stephan Wolf
Estimated Reading Time: 6 minutes
In May 2019, the Global Legal Entity Identifier Foundation (GLEIF) published the latest quarterly report, which highlights key developments relevant to the adoption of the Legal Entity Identifier (LEI). Specifically, the reports assess annual growth and renewal expectations, evaluate the level of competition between LEI issuing organizations operating in the Global LEI System and analyze LEI renewal rates and reference data corroboration. Since July 2017, we also deliver statistics on direct and ultimate parent information provided by legal entities.
To download the ‘Global LEI System Business Report’ which covers the first quarter of 2019, refer to the ‘related links’ below.
This blog post summarizes the main findings of the latest report. Sources cited are included in the ‘related links’ below.
Main findings of the latest Global LEI System Business Report
The Global LEI System Business Report, which was published in May 2019, analyses developments observed in the first quarter of 2019. It shows:
LEI issuance and LEI growth potential: State of play
At the end of the first quarter of 2019, the total LEI population neared 1.36 million. Approximately 53,000 LEIs were issued in the first quarter of 2019 compared to approximately 55,000 in the fourth quarter of 2018. This represents a quarterly growth rate of 4.1% in the first quarter (previous quarter: 4.4%).
In the first quarter, China featured the highest LEI growth rate at a jurisdiction level (115.3%) followed by Turkey (48.3%), Mauritius (24.8%), India (23.6%), and Australia (12.9%). Growth in China, India, Turkey and Australia is primarily attributed to regulatory initiatives mandating the use of the LEI.
Competition in the Global LEI System
The report identifies the least and most competitive markets of those with more than 1,000 LEIs, based on the number of LEI issuers providing services in the jurisdiction. In the first quarter of 2019, Italy, Netherlands, Spain, Finland and Czech Republic were the five least competitive markets in descending order. Romania, Lithuania, Portugal, Malta and Bulgaria were the five most competitive markets in descending order.
LEI renewal rates
The annual renewal process ensures that the legal entity and the LEI issuing organization review and re-validate the legal entity reference data at least once per year. The Global LEI System is unique in providing absolute transparency on the timeframe when data has last been verified.
In the first quarter of 2019, the overall renewal rate of 70.8% remained essentially unchanged compared to the previous quarter (70.1%). (This includes jurisdictions with at least 1,000 LEIs in total at the previous quarter-end date). At the end of the first quarter of 2019, 73.4% of all LEIs were in good standing (previous quarter: 76%).
It is worth noting that about 170,000 LEIs were issued in the first quarter of 2018, due to the impact of the revised EU Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR), which took effect on 3 January 2018. Approximately 67% of these, which were due for renewal in the first quarter of 2019, were renewed on time.
The renewal rate in the EU increased from 70.3% to 71.7%. In non-EU jurisdictions, it improved to 59.7% (previous quarter: 57.6%). In the reporting period, these five jurisdictions demonstrated the highest renewal rates: India (95.5%), Finland (93.5%), Japan (91.9%), Liechtenstein (91.1%) and Norway (85.7%). Brazil (54.9%), the United States (53.9%), South Africa (48.3%), the United Kingdom (46.6%), and the Russian Federation (46.3%) were the top five jurisdictions demonstrating the highest non-renewal rates.
Level 1 reference data corroboration
The business card information available with the LEI reference data, e.g. the official name of a legal entity and its registered address, is referred to as ‘Level 1’ data. It provides the answer to the question of ‘who is who’. The Level 1 data is considered fully corroborated if, based on the validation procedures in use by the LEI issuer, there is sufficient information contained in authoritative public sources to corroborate the information that the legal entity has provided for the record. If this is not the case, the business card information available with an LEI record is classified as ‘entity-supplied only’.
In the first quarter of 2019, the percentage of fully corroborated Level 1 reference data within the entire LEI population increased from 78.2% to 78.8%.
Statistics on the reporting of parent information by legal entities
In the first quarter of 2019, approximately 1,200,000 LEI registrants representing 88% of the total LEI population had reported information on direct and ultimate parents. 99.9 % of LEI registrants who obtained a newly issued LEI or renewed an existing LEI in this quarter reported parent information.
In the reporting period, 7% of legal entities reported a direct parent that has an LEI (previous quarter: 6%). The percentage of legal entities reporting an ultimate parent that has an LEI remains stable at 7%.
The share of legal entities that cited legal obstacles preventing them from providing or publishing parent information decreased from 9.6% to 8.6%.
The quarterly reports refer to concepts and definitions unique to the Global LEI System. To facilitate an easy understanding of the reports, we have summarized relevant concepts in the document ‘Background Information on Global LEI System Business Report’.
GLEIF also makes available the ‘Business Reporting Dictionary’, which defines formulas and algorithms used to report on the LEI activity highlighted with the quarterly reports.
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Stephan Wolf is the CEO of the Global Legal Entity Identifier Foundation (GLEIF). Since January 2017, Mr. Wolf is Co-convener of the International Organization for Standardization Technical Committee 68 FinTech Technical Advisory Group (ISO TC 68 FinTech TAG). In January 2017, Mr. Wolf was named one of the Top 100 Leaders in Identity by One World Identity. He has extensive experience in establishing data operations and global implementation strategy. He has led the advancement of key business and product development strategies throughout his career. Mr. Wolf co-founded IS Innovative Software GmbH in 1989 and served first as its managing director. He was later named spokesman of the executive board of its successor IS.Teledata AG. This company ultimately became part of Interactive Data Corporation where Mr. Wolf held the role of CTO.