Inside the LEI—Issue VIIREFERENCE DATA Inside the LEI—Issue VII In line with growth over the...
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REFERENCE DATA Inside the LEI—Issue VII In line with growth over the last year, the LOUs continue to issue around 20,000 LEIs a quarter, taking the total number of LEIs assigned to around 385,000. This growth in issuance continues to be driven by a small number of LOUs. Almost half of the LEIs that have been issued to date have come from one LOU, the US GMEI Utility, while over 80% of the LEIs have been issued by only 4 LOUs – GMEI (US), WM Datenservice (Germany), London Stock Exchange (UK) and UICCIAA (Italy). A number of LOUs have grown their global business operations to assign LEIs across multiple countries. While some LOUs are merely “filling the gap” by being a source of LEIs for neighboring countries without their own LOU, some LOUs are actively operating in jurisdictions that have their own LOUs. In particular, we are seeing the rise of the “super-LOU” where three of the major LOUs are each assigning LEIs across over 100 countries. These “super-LOUs” are actively marketing their services and, in some cases, competing with each other. At the same time, almost 85,000 of the LEI registrations have not been renewed— meaning that almost 22% of the total LEI universe have lapsed. When you remove the universe of LEIs that are less than a year old (and thus have not reached their first renewal date) the lapse rate is closer to 28%. On a positive note, however, the lapse rate appears to be trending lower from its previous highs. The lapse rate for entities issued LEIs in 2014 (prior to September) is only 23%, while the lapse rate for entities issued LEIs in 2013 is 36% and for entities issued LEIs in 2012 is 27%. It is also interesting to note that among the listed, rated and regulated universe of entities with LEIs, the lapse rated is lower, coming in at under 23% (rather than 28%). As issuance of LEIs to entities that are active in the financial markets grows (as evidenced by them being rated, regulated and/or listed) we expect the LEI lapse rate to decrease as the LEI will become increasingly important within this universe. Alacra Reference Data Alert SEPTEMBER 2015 Lapse Rates by Entity Type All Entities 0% 10% 20% 30% 40% Listed Rated Regulated Listed Regulated Rated
Transcript of Inside the LEI—Issue VIIREFERENCE DATA Inside the LEI—Issue VII In line with growth over the...
REFERENCEDATA
Inside the LEI—Issue VIIIn line with growth over the last year, the LOUs continue to issue around 20,000 LEIs a quarter, taking the total number of LEIs assigned to around 385,000. This growth in issuance continues to be driven by a small number of LOUs. Almost half of the LEIs that have been issued to date have come from one LOU, the US GMEI Utility, while over 80% of the LEIs have been issued by only 4 LOUs – GMEI (US), WM Datenservice (Germany), London Stock Exchange (UK) and UICCIAA (Italy).
A number of LOUs have grown their global business operations to assign LEIs across multiple countries. While some LOUs are merely “filling the gap” by being a source of LEIs for neighboring countries without their own LOU, some LOUs are actively operating in jurisdictions that have their own LOUs. In particular, we are seeing the rise of the “super-LOU” where three of the major LOUs are each assigning LEIs across over 100 countries. These “super-LOUs” are actively marketing their services and, in some cases, competing with each other.
At the same time, almost 85,000 of the LEI registrations have not been renewed— meaning that almost 22% of the total LEI universe have lapsed. When you remove the universe of LEIs that are less than a year old (and thus have not reached their first renewal date) the lapse rate is closer to 28%.
On a positive note, however, the lapse rate appears to be trending lower from its previous highs. The lapse rate for entities issued LEIs in 2014 (prior to September) is only 23%, while the lapse rate for entities issued LEIs in 2013 is 36% and for entities issued LEIs in 2012 is 27%.
It is also interesting to note that among the listed, rated and regulated universe of entities with LEIs, the lapse rated is lower, coming in at under 23% (rather than 28%). As issuance of LEIs to entities that are active in the financial markets grows (as evidenced by them being rated, regulated and/or listed) we expect the LEI lapse rate to decrease as the LEI will become increasingly important within this universe.
Alacra Reference Data Alertseptember 2015
Lapse Rates by Entity Type���������All
Entities
0%
10%
20%
30%
40%
ListedRated
Regulated
Listed RegulatedRated
��Rated with LEI
20%
Rated without LEI
80%
Percentage of Rated Entities Assigned an LEI
The rated universe Alacra covers includes those entities/issuers rated by A.M. Best, Fitch, Moody’s, and S&P. This totals around 62,000 entities globally. About 20% of these entities have been assigned an LEI, a continued increase from 16% in March 2015 and 18% in June 2015.
Overlap29,146
ListedRated
Regulated213,111
LEIUniverse
383,456
Overlap Between AAF and LEI Universe
The Alacra Authority File provides reference data and entity identifier mapping on a universe of almost 215,000 entities that are either rated, regulated or listed. This dataset contains most of the common customers and counterparties of large, global financial institutions. The chart above shows the overlap between the rated, regulated and listed universe and the LEI universe (without the entities registered by the Japanese LOU).
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Alacra tracks all entities that have either a debt or equity listing on a global exchange. Of the approximately 90,000 entities that are listed, only 16% have been assigned an LEI. This is the same as the 16% assignment level from June 2015.
�+�Listed with LEI
16%
Listed without LEI
84%
�����������������AFM
20%
40%
60%
80%
100%
Banque
de FranceBaFin
SEC Inv. A
dv.NFA
FCA
US Federal
Reserve FIN
RAASIC
Percentage of Listed Entities Assigned an LEI
Percentage of Regulated Entities Assigned an LEI
Alacra tracks the regulatory status of legal entities around the world. We monitor over 65 global financial market regulators that are currently regulating about 87,000 entities. Ideally all regulated entities worldwide would have an LEI, replacing the entity identifiers currently used by regulatory bodies.
LOU Global PenetrationWhen obtaining an LEI, an entity can work with any LOU, irrespective of the location of the entity, or of the LOU. A number of LOUs have grown their global business operations to assign LEIs across multiple countries.
While some LOUs are merely “filling the gap” by being a source of LEIs for neighboring countries without their own LOU, we are seeing LOUs actively operating in jurisdictions with their own LOUs.
0
5
10
15
United States
PolandLa
tvia
Germany
Netherlands
Great Brita
in
Luxe
mbourg
Countries With Most Multi-LOU Activity
5
0 20 40 60 80 100 120 140 160 180 200
MauritiusCentral Depository & Settlement Co Ltd
IndiaReserve Bank of India
KoreaKorea Financial Services
NigeriaSecurities & Exchange Commission of Nigeria
ArgentinaRegistro de Identificacion de Entidades del BCRA
CroatiaZagreb Stock Exchange
TurkeyTakasbank
SlovakiaCentral Securities Depository
NorwayBrønnøysund Register Centre
RussiaNational Settlement Depository
LuxembourgLuxCSD
GermanyBundesanzeiger Verlag
FinlandFinnish Patent and Registration O�ce
IrelandIrish Stock Exchange
PolandKrajowy Depozyt Papierów Wartosciowych S.A.
Czech RepublicCentral Securities Depository
SpainRegistro Mercantil de Madrid
NetherlandsKamer van Koophandel
FranceINSEE
ItalyUnone Italiana per le Camere
United KingdomLondon Stock Exchange
GermanyWM Datenservice
United StatesGMEI
LOU Presence in Multiple Countries – Rise of the Super-LOU
We are seeing the rise of the “super-LOU” where three of the major LOUs are each assigning LEIs across over 100 countries. These “super-LOUs” are actively marketing their services and in some cases competing with each other.
This chart shows the number of LEIs that have been assigned by 23 of the 25 endorsed LOUs. The gold bars represent LEIs that have been assigned but have since lapsed, i.e., they have not been renewed by the entity since first being registered. The percentage of lapsed LEIs to active LEIs is shown next to each LOU’s bar.
The US-based GMEI continues to lead the way having assigned almost as many LEIs as the rest of the LOUs combined. However, it also has the greatest percentage of lapsed LEIs at 31% (though closely trailed by INSEE, the French LOU, at 27% and RMM, the Spanish LOU, at 26%).
Overall, around 85,000 LEIs have lapsed, representing 22% of the total LEI universe. This represents an increase of 15,000 LEIs since June 2015 pushing the lapse rate up from 20%.
Number of LEIs Assigned by LOU
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000
MauritiusCentral Depository & Settlement Co Ltd
IndiaReserve Bank of India
KoreaKorea Financial Services
NigeriaSecurities & Exchange Commission of Nigeria
ArgentinaRegistro de Identificacion de Entidades del BCRA
CroatiaZagreb Stock Exchange
TurkeyTakasbank
SlovakiaCentral Securities Depository
NorwayBrønnøysund Register Centre
RussiaNational Settlement Depository
LuxembourgLuxCSD
GermanyBundesanzeiger Verlag
FinlandFinnish Patent and Registration O�ce
IrelandIrish Stock Exchange
PolandKrajowy Depozyt Papierów Wartosciowych S.A.
Czech RepublicCentral Securities Depository
SpainRegistro Mercantil de Madrid
NetherlandsKamer van Koophandel
FranceINSEE
ItalyUnone Italiana per le Camere
United KingdomLondon Stock Exchange
GermanyWM Datenservice
United StatesGMEI 31%
12%
11%
14%
27%
5%
26%
13%
10%
6%
2%
2%
2%
0%
10%
0%
0%
0%
0%
0%
0%
1%
3%
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LEI Lapse Rates Over Time
Almost 85,000 of the LEI registrations have not been renewed meaning that almost 22% of the total LEI universe has lapsed. However, when you remove the universe of LEIs that are less than a year old (and thus have not reached their first renewal date) the lapse rate is closer to 28%.
0
10%
20%
30%
40%
50%
60%
Sep-14Aug-14
Jul-14
Jun-14
May-14Apr-1
4Mar-1
4Feb-14
Jan-14Dec-13
Nov-13Oct-13
Sep-13Aug-13
Jul-13
Jun-13
May-13Apr-1
3Mar-1
3Feb-13
Jan-13Dec-12
Nov-12Oct-12
Sep-12Aug-12
Jul-12Jun-12
LEI Issuance Over Time
0
50,000
100,000
150,000
200,000
250,000 All LOUs
Top 4 LOUs
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
While LEI issuance has been fairly stable at around 20,000 new LEIs being assigned per quarter, it is interesting to note that there was a major spike at the end of 2013 and the beginning of 2014. Indeed, over 120,000 new LEIs were issued in the first quarter of 2014.
Almost half of the LEIs that have been issued to date have come from one LOU, the US GMEI Utility, while over 80% of the LEIs have been issued by only 4 LOUs—GMEI (US), WM Datenservice (Germany), London Stock Exchange (UK), and UICCIAA (Italy).
�����0%
10%
20%
30%
40%
2012 2013 2014
Average LEI Lapse Rate
On a positive note, however, the lapse rate appears to be trending lower from its previous highs. The lapse rate for entities issued LEIs in 2014 (prior to September) is only 23%, while the lapse rate for entities issued LEIs in 2013 is 36% and for entities issued LEIs in 2012 is 27%.
Lapse Rates by Entity Type
Among the listed, rated and regulated universe of entities with LEIs, the lapse rate is lower, coming in at under 23%.
���������All
Entities
0%
10%
20%
30%
40%
ListedRated
Regulated
Listed RegulatedRated
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Percentage of LEI Entities that are Either Funds, Trusts or SPVs
Similar to our analysis in June 2015, about 19% of all the entities that have been assigned an LEI are either a fund, a trust, or an SPV.
�+4+�Funds
15%
Other entity types
81%
Trusts & SPVs
4%
Overlap Between LEI and LED
On a daily basis, Alacra’s Legal Entity Directory tracks a superset of over 4.5 million unique legal entities maintained by the major data vendors. Where an entity has an LEI, it will typically be covered by a major data vendor, but millions of entities in their universes do not yet have an LEI assigned.
LEIUniverse
383,456
Legal EntityDirectory
4,508,788
Overlap353,135
Overlap Between the GIIN Universe and the LEI Universe
LEIUniverse
383,456
GIINUniverse
172,346
Overlap27,605
The GIIN (Global Intermediary Identifier Number) is issued by the IRS to foreign financial institutions (FFIs) as part of the Foreign Account Tax Compliance Act (FATCA). The goal of FATCA is to reduce US tax evasion by requiring FFIs such as banks, funds, trusts, asset managers and insurance companies to report certain information to the IRS about their US accounts. The chart above shows how many FFIs in the GIIN universe also have an LEI.
Overlap Between BIC Entities and the LEI Universe
LEIUniverse
383,456
Overlap7,895
BICUniverse34,572
SWIFT (The Society for Worldwide Interbank Financial Telecommunication) supplies secure messaging and payment instruction services to financial entities. The Bank Identifier Code (BIC) is a unique identification code for a particular financial institution and is used when transferring money between banks, particularly for international wire transfers. The chart above shows how many top level entities in the BIC universe also have an LEI.
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www.alacra.com/reference-data-solutions/ 09/15 © 2015 Alacra, Inc.
ALACRA REFERENCE DATA TEAMSteve OrtmanCharlie GoldsteinJeremy WilkSarah LiangHaley FullerAlan Samuels
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