IGTA Journal - Winter 2020/2021

Delivered by Ingenta IP: 193.129.26.79 On: Tue, 28 Jan 2020 14:32:43 Copyright: Henry Stewart Publications - - - - - - - Journal of Payments Strategy & Systems Volume 13 Number 4 Page 322 The value of the Legal Entity Identifier for the payments industry Received (in revised form): 25th October, 2019 Victoria Cleland* Executive Director for Banking, Payments and Innovation, Bank of England Victoria Cleland Victoria Cleland is the Bank of England’s Executive Director for Banking, Payments and Innovation. She leads the teams responsible for the operation and strategic development of payment system services, including the UK’s real-time gross settlement infrastructure and the Bank of England’s wholesale and retail banking operations, including the provision of emergency liquidity assistance. Victoria is also a member of the Bank’s RTGS/CHAPS Board. She has held various roles at the Bank of England, including Chief Cashier, Deputy Head of the Bank’s Special Resolution Unit, Private Secretary to the Deputy Governor and Senior Manager in the Market Infrastructure Division. *Bank of England, Threadneedle Street, London, EC2R 8AH, UK E-mail: victoria.cleland@ bankofengland.co.uk Gerard Hartsink** Chairman, Global Legal Entity Identifier Foundation Gerard Hartsink Gerard Hartsink is Chairman of the Global Legal Entity Identifier Foundation. He is also a member of the World Trade Board, the Inter national Chamber of Commerce Digital Econ omy Commission and the Dutch government’s Forum Standaardisatie. His previous roles include Senior Executive Vice President of ABN AMRO Bank, Chairman of CLS Bank Interna tional and the European Payments Council and Board Member of SWIFT, LCH.Clearnet Group, Euroclear Netherlands and the Euro Banking Association. **Global Legal Entity Identifier Foundation, St.Alban-Vorstadt 5, 4002 Basel, Switzerland E-mail: gerard.hartsink@ gleif.org A BSTRACT In November 2011, the G20 initiated the Legal Entity Identifier (LEI) programme for the develop ment of a global system to uniquely identify parties engaged in financial transactions. Since then, over 1.4 million legal entities in over 200 jurisdictions have registered for an LEI.This paper describes the progress made in the implementation of the pro gramme and sets out the potential benefits that LEIs offer as a global means of verifying identity in payments. It describes existing plans to incorpor ate LEIs into payments through the move to the ISO 20022 messaging standard, and the existing barriers to this adoption. It concludes by laying out a ‘call to action’ to all market participants (national international, public and private) explaining the steps required to realise the full potential LEIs can bring to the payments industry and the wider economy. Keywords: FSB, Bank of England, GLEIF, LEI Regulatory Oversight Committee, ISO 17442 LEI, ISO 20022, Legal Entity Identifier Journal of Payments Strategy & Systems Vol. 13,No. 4 2020, pp. 322–336 Henry Stewart Publications, 1750-1806 INTRODUCTION The 2008 global f inancial crisis high lighted that f inancial parties often found it diff icult to identify quickly the pre cise legal entity of the counterparties in their f inancial transactions, particularly for cross-border trades. The need for a standardised identif ier was recognised as crucial to improving the quality and accuracy of f inancial data. To address this, the G20 called on the Financial Stability Board (FSB) to take the lead in develop ing a framework for a global Legal Entity Identif ier (LEI) system. At the G20 2012 Los Cabos Summit, 1 the G20 endorsed the FSB recommendations for the development of - - IGTA eJournal | Winter 2020/21 | 38