Regulatory compliance in Singapore: Legal Entity Identifier

A Legal Entity Identifier (LEI) is a number given to a legal entity to identify without ambiguity all the parties in a financial transaction across the globe. It is a unique 20 digits alpha-numeric code, assigned to the entity for the duration of its life by Local Operational Units (LOU) part of the Global Legal Entity Identifier System.

The system was created under the authority of the G20 and the Financial Stability Board (FSB), in 2011, in order to allow more transparency and monitoring to financial transactions. The structure of the LEI code is defined in ISO standard 17442. According to it, LEI code is composed of:

  • Characters 1-4: Prefix used to ensure the uniqueness among codes from LEI issuers (LOUs).
  • Characters 5-18: Entity-specific part of the code generated and assigned by LOUs according to transparent, sound and robust allocation policies. As required by ISO 17442, it contains no embedded intelligence.
  • Characters 19-20: Two check digits

Eligibility

As defined in ISO standard 17442, “any legal entity that enters into a financial transaction is eligible for an LEI”. However, “any legal requirement to have an LEI will come from national financial regulators.

‘Legal entity’ includes, but is not limited to, unique parties that are legally or financially responsible for the performance of financial transactions or have the legal right in their jurisdiction to enter independently into legal contracts, regardless of whether they are incorporated or constituted in some other way (e.g. trust, partnership, contractual). It excludes natural persons, but includes governmental organizations and supranationals.”

LEI data

ISO standard 17442 supplies the minimum reference data a legal entity must supply to obtain an LEI:

  • The official name of the legal entity as recorded in the official registers
  • The registered address of this legal entity
  • The country of formation
  • The codes for the representation of names of countries and their subdivision
  • The date of the first LEI assignment; the date of last update of the LEI information; and the date of expiry, if applicable
  • Other information may be added depending on the agreement between the LEI issuing organisation and the entity.

The full data of the whole LEI population is freely available to the public for unrestricted use.

LEI requirements in Singapore

Legislation concerning LEI in Singapore comes from MAS (Monetary Authority of Singapore). Any organisation subjected to its Securities and Futures (Reporting of Derivatives Contracts) Regulations 2013 are required to have an LEI. This text concerns the reporting of specified derivatives contracts, meaning:

  • Any interest rate derivatives contract which is traded in Singapore or booked in Singapore,
  • Any credit derivatives contract which is traded in Singapore or booked in Singapore.

Compliance requirements by MAS often vary depending on the type of license a company have, its size, its activity, or other factors. Argus Global can help you set up thorough and pertinent policies and procedures to make sure you comply with all the latest regulations concerning your business, as well as provide any regulatory compliance services you may need from licensing to risk management.

 

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