The European Systemic Risk Board (ESRB)’s Recommendation A proposes that:
- EU legislation incorporates a common EU legal framework governing the identification of legal entities established in the EU that are involved in financial transactions by way of a legal entity identifier (LEI);
- EU legislation that imposes an obligation on legal entities to report financial information includes the obligation to identify by way of a LEI the legal entity subject to the reporting obligation and any other legal entity about which information must be reported; and
- EU legislation incorporates an obligation on authorities to identify by way of its LEI any legal entity about which they publicly disclose information.
Recommendation B calls on relevant authorities (which include national competent authorities, ESMA, EIOPA and the EBA) to require all legal entities involved in financial transactions under their supervisory remit to have an LEI. It also suggests that such authorities should include in their financial reporting obligations an obligation to identify, by way of an LEI, the legal entity subject to the reporting obligation and any other legal entity about which information must be reported and to identify, by way of its LEI, any legal entity about which they publicly disclose information.
The ESRB has asked the Commission to deliver a report on the implementation of Recommendation A by 30 June 2023 and it hopes that a report on the implementation of Recommendation B will be delivered by 31 December 2021.