The Bermuda Stock Exchange (BSX) today confirmed that it is authorsied to issue Legal Entity Identifiers (LEI) to Bermuda domiciled companies and has been doing so for several months.
In making the announcement BSX Operations Manager Mr. Neville Caines noted:
The BSX through its relationship with CUSIP Global Services, is now issuing LEIs to Bermuda domiciled companies in association with the Global LEI Foundation. A LEI is a unique 20-character alphanumeric identification code designed for regulators to globally identify all legal entities engaging in financial transactions.
Mr. Caines went on to explain further:
LEIs do not replace current CUSIP ISIN numbers, which specifically identify a security for the purpose of facilitating clearing and settlement of trades. Rather, the LEI code is associated with specific reference data for the financial entity, including core identification information such as the official name of the legal entity, the address of its headquarters and the address of legal formation, as well as any parent company information.
The Global LEI Foundation was formed in 2014 by the Regulatory Oversight Committee (ROC) to act as the not-for-profit operational arm of its Global LEI System. The ROC was itself established as a stand-alone committee after recommendations by the International Financial Stability Board and the endorsement of its Charter by the Group of Twenty (G-20) Nations in November 2012, as one of the recommendations coming out of the 2008 financial crisis.
The LEI is seen as the linchpin for the collection of financial data as it is the first global entity identifier which enables risk managers and regulators to identify parties to financial transactions instantly and precisely.
In closing Mr. Caines explained the timing of the Exchange’s announcement:
The BSX actually began issuing LEI’s last year. However, LEIs are only now garnering the attention of many companies following the passage on January 3rd of the latest MiFID II regulation which states that all relevant to entities within the EU, including the UK, which are subject to the MiFID II Directive and associated regulations, must have an LEI in order to trade. Specifically the MiFID regulations state that trade without a LEI is ‘henceforth not possible’.