GLEIF | Global Legal Entity Identifier Foundation
What is GLEIF and when was it founded?
The Global Legal Entity Identifier Foundation (GLEIF) was established in June 2014, by the Financial Stability Board. The foundation is supported and looked after by the Regulatory Oversight Committee, an organization representing public authorities from around the world that has joined to drive forward transparency within the global financial markets. GLEIFs’ tasks are to support the implementation and use of the Legal Entity Identifier (LEI), as a supra-national not-for-profit organisation with its headquarters in Switzerland. Along with 15 other Directors, Gerard Hartsink was appointed to be the inaugural chairman of the board.
GLEIF’s role in the LEI dimension
GLEIF is uniquely positioned in the entity identification market, agnostic to any particular political and/or commercial interests. The foundations’ overhaul is to ensure the operational integrity of the Global LEI System. GLEIF is the one behind continuously improving the information available and the quality of the Global LEI Index. GLEIF makes access to information convenient by making the Global LEI Index obtainable to everyone.
The Global LEI Index is the only worldwide online source providing open, standardized, high-quality legal entity reference data. Through this, GLEIF can enable individuals and entities to make smarter, less costly, and more definitive decisions about their possible business partners and clients.
GLEIF’s responsibilities as listed on the website.
- Evaluating the suitability of organizations seeking to operate as issuers of LEIs.
- Providing expertise and reliability throughout the organization and management of the system.
- Ensuring access to the complete global LEI data pool, free of charge, to users.
- Continuously optimizing the quality of the LEI data pool.
- Making available comprehensive information on the LEI and the Global LEI System, as well as timely updates on related global developments and GLEIF activities.
For an overview of GLEIF’s services, refer to the GLEIF Service Catalog here.
Thanks to the work of GLEIF, the LEI remains the industry standard best suited to providing open and trustful data for unique legal entity identification management. The foundation has endorsed the International Open Data Charter, aiming to foster greater consistency and collaboration to promote the increased adoption and implementation of shared open data principles, standards, and procedures across sectors globally.
What does the future hold for the LEI system?
Today LEIs have been assigned to legal entities primarily based in the US and Europe, where regulations now require using LEIs to uniquely identify counterparties to transactions in regulatory reporting. In these jurisdictions, public authorities rely on LEI to assess risk, take corrective steps, and, when necessary, control market abuse whilst improving the integrity of financial data.
Therefore broad LEI adoption will also generate remarkable advantages for the wider business community, by simplifying and globalizing a method of validating organizations and mapping identifiers. This information, on a greater scale, can be used to understand organization identity and hierarchy, consequently, keep contributing to newer technological innovations like blockchain.
One great example of companies that use various identifiers internally to identify the same customer is banks. So do vendors associated with the bank, and LEI has the potential to consolidate many of these inefficiencies.
Taking further the example of a bank, in the future, LEIs will be used to save time onboarding, making processes more efficient and clear – giving confidence to all parties involved. Banks in trade financing could save up to US$500 million per annum overall by using the LEI in issuing letters of credit, as well as saving hours and hours in onboarding time.
Furthermore, LEIs help save time and money in the steps taken to complete a digitalized financial transaction. Verification of Identity, invoicing, and signing are just some of the steps involved – this entire order-to-payment process can be streamlined between organizations in a much more efficient way.
LEIs enable us to immediate, digitized identification of entities and allow banks to drastically cut back the time and other resources spent on background checks and investigation, help to alleviate risk and comply with Anti Money Laundering (AML) regulations, as well as reduce the instance of false reporting.