Original Press Release
Draft International Standard Seeks to Bolster Global Financial Services Industry
Press release date: July 25, 2011
In the wake of the 2008 financial crisis, a new draft standard from the International Organization for Standardization (ISO) is designed to help the global financial services industry more effectively measure and manage risk, and improve operational efficiency.
Targeted for publication in January 2012, ISO 17442, Financial services -- Legal Entity Identifier (LEI), enables the unique identification of global entities involved in financial transactions, including banks, finance companies, and entities that trade stock or debt, partnerships, and pension funds.
By defining a universal method of identifying parties to a financial transaction, ISO 17422 is intended to reduce the cost of data reconciliation, ensure data consistency, and facilitate the aggregation of positions and risk monitoring. A demand for LEIs was expressed by the European Systemic Risk Board (ESRB) and the U.S. Treasury's Office for Financial Research, which mandated U.S. banks to report on over-the-counter derivatives via identifiers by July 2011.
Development of the draft international standard (DIS) is being led by ISO Technical Committee (TC) 68, Financial Services, which develops standards in the field of banking, securities, and other financial services.
As the U.S. member body to ISO, the American National Standards Institute (ANSI) holds the Secretariat of ISO TC 68, which has been delegated to Accredited Standards Committee X9 (X9), an ANSI member and accredited standards developer. Karla McKenna of Citigroup serves as chair of TC 68 on behalf of the United States. X9 also administers the ANSI-accredited U.S. Technical Advisory Group (TAG) to ISO TC 68, and is responsible for bringing U.S. positions forward in this area.
ISO TC 68 has selected the Society for Worldwide Interbank Financial Telecommunications (SWIFT) as the primary ISO registration authority for the standard.
ISO 17422 was recently recommended by the Global Financial Management Association (GFMA) - a federation of global financial services trade associations - as a basis for a viable, uniform and global LEI solution. GFMA recommends ISO 17442 as the foundation for an LEI system including a central registry, the assignment of LEIs in accordance with requirements outlined by industry and regulator, and a federated model for LEI application and collection of company information.
An article on ISO 17442 appeared in April 2011 issue of ISO Focus+ magazine and can be accessed free of charge on the ISO website.