FRB Announces Proposal Requiring Banks to Include LEIs on Certain Reporting Forms
Commentary by Scott Cammarn
The Board of Governors of the Federal Reserve System ("FRB") announced its proposal to require banking organizations to include their existing legal entity identifiers ("LEIs") on certain regulatory reporting forms.
According to the FRB press release, the proposal builds on the framework introduced by the Financial Stability Board, which is intended to implement a global identifier system that would identify parties to financial transactions. LEIs are unique reference codes that enable easier identification of a firm's legal entities. They are assigned by Local Operating Units of the Global LEI System. The system is responsible for registering legal entities and assigning LEIs to institutions in local jurisdictions.
The proposal would require banking organizations to include LEIs for its relevant units on certain reporting forms starting on June 30, 2015. Requested comments on the proposal are due within 60 days of its publication in the Federal Register.
Commentary
If the proposed regulation is adopted, then U.S. bank holding companies would be required to obtain LEIs for each of their subsidiaries worldwide (as foreign banking organizations would be for their U.S. affiliates); they also would be obligated to include this LEI information in their organizational reports to the Federal Reserve (i.e., the FR Y-6 and FR Y-7 annual reports and the FR Y-10 changes report). Currently, the Federal Reserve requires LEI reporting only for top-tier entities and only if such entities happen to have obtained LEIs for other reasons (such as for swap data reporting purposes).