What’s Next for the Global LEI System? Toward a Safer and More Transparent Global Digital Economy

What's Next for the Global LEI System? Toward a Safer and More Transparent Global Digital Economy

As the world's business landscape pivots toward digitalization, the crucial role of digital trust and reliability in fostering a safer environment for global trade and economic inclusion is increasingly evident. Amid this transformation, Alexandre Kech, CEO at GLEIF, reflects on the evolution of the Global Legal Entity Identifier (LEI) System, highlights the unparalleled opportunities that lie ahead, and celebrates the contributions of LEI stakeholders from across the world.

In just a decade, the Global LEI System has revolutionized how legal entities are identified and tracked globally, providing a robust framework for uniquely identifying legal entities participating in financial transactions. From the beginning, the LEI initiative has served as a 'broad public good,' evident mostly in global financial markets where its use has been widely mandated, creating much-needed transparency. Today, as businesses undergo rapid digital transformation, this trust and reliability have become more critical than ever in securing a more transparent and safer environment for global trade and advancing economic inclusion.

Given the increasing need for global transparency and identifiability, there is growing industry momentum for using of the Legal Entity Identifier (LEI) and its digitally trustworthy version, the verifiable LEI (vLEI), in cross-border ecosystems.

The growing role that the LEI is playing in bringing trust and transparency to cross-border payments is a good example. Here the LEI is easing KYC and onboarding, tackling the plague of financial crime, and simplifying complex supply chains. Elsewhere, the vLEI is already addressing the urgent global need for digitized, automated authentication and verification of organizations and the individuals acting on their behalf or engaged with them. This brings increased efficiencies and security to streamline global trade.

As we look ahead to GLEIF's second decade and beyond, continuing to expand the utility and value of the Global LEI System as a 'public good' by hardwiring verifiable organizational identity-and therefore trust-into every business relationship is a key strategic priority, enabling individual organizations to realize new opportunities while simultaneously addressing a range of global macro-economic challenges.

Acknowledging excellence across the Global LEI System

The journey towards a more transparent and inclusive global market requires ongoing collaboration, commitment to interoperability and global standards. With the steadfast support of the Global LEI System stakeholders, our global network of LEI issuers, and other business partners, we will further enhance the positive impact of the LEI and vLEI on the global economy.

Recognizing the major contributions of LEI issuing organizations is particularly important, given that their dedication to accuracy, data quality, and continuous improvement has helped create a more transparent and resilient financial ecosystem.

To celebrate the exceptional work of LEI issuers in upholding data quality and service level agreements, GLEIF established the GLEIF Awards in 2023. These dedicated awards were introduced to foster healthy competition and bolster the Global LEI System's effectiveness in promoting transparency, enhanced risk management, and improved regulatory reporting.

Winners of the 2024 awards, announced at this week's annual GLEIS Forum Event, were:

• Best-Performing LEI Issuer in the Large-Cap Category (more than 100,000 LEIs under management) - InfoCamere
• Best-Performing LEI Issuer in the Mid-Cap Category (between 5,000 and 100,000 LEIs under management) - KDPW
• Best-Performing LEI Issuer in the Small-Cap Category (less than 5,000 LEIs under management) - Depozitarul Central S.A

Following the introduction of the Policy Conformity Flag earlier this year, GLEIF has also introduced a new award category for 2024: the 'Transparency in Global Markets Challenge'. The Policy Conformity Flag was launched to clarify to global data users whether an LEI record is up-to-date and complete with relationship reporting. This signalled the strong and continued commitment of the Regulatory Oversight Committee (ROC) and GLEIF to encouraging renewals and promoting current, complete data reporting by legal entities.

The new award recognizes the LEI issuer that initiated the most innovative outreach campaign for the Policy Conformity Flag and has achieved a strong improvement in Conforming LEIs. Following a vote by delegates, Legal Entity Identifier India Limited (LEIL) was unveiled as the inaugural winner.