Released on July 7 by the Financial Stability Board (FSB), the Report sets out recommendations and options for improving the adoption of the legal entity identifier (LEI) in cross-border payments with the aim to foster the use of common message formats, data exchange protocols, among others and improve compliance processes.
This FSB report, in close coordination with the Global LEI Foundation (GLEIF), the Regulatory Oversight Committee (ROC) and national authorities, explores options to promote broader LEI adoption and specifically in cross-border payments.
FSB’s proposed options include:
ROC, GLEIF and national authorities to pursue their effort to promote the quality of LEI reference data
Recommendation that the GLEIF engage in specific pilot projects with relevant stakeholders regarding standards for including the LEI in payment messages and guidance to financial institutions on possible uses of the LEI when transmitted in payment messages
Exploration of the use of LEI for the onboarding process and, possibly, for the purpose of strong customer authentication by public and private sector stakeholders
Public communication and promotion to raise the visibility of the LEI, particularly among non-financial sectors involved in cross-border payments
FSB members to consider the inclusion of an optional field for the LEI in routing message formats for wholesale payment systems, and possibly migration to ISO 20022 messages
FSB members to consider linkage of LEI to domestic identifiers in their digital infrastructures, to promote interoperability of LEI and other identifiers to facilitate automated reconciliation and validation.
The FSB will publish a progress report on the implementation of the recommendations by end-2024.