global lei system business report q2 2018 - gleif.org · the business card information available...

Global LEI System Business Report

Q2 2018

https://www.gleif.org/en

© 2018 GLEIF and/or its affiliates. All rights reserved. | Release date 2018-08-08 | Version 1.0 | Public

India features the highest LEI growth rate at country level in both the first and the second quarter of 2018 (100.5% in Q2 2018). This trend could be attributed to the Reserve Bank of India’s adoption of the LEI for large corporate borrowers.

Competition in the Global LEI System

The report identifies the least and most competitive markets of those with more than 1,000 LEIs, based on the number of LEI issuers providing services in the country. In the second quarter of 2018, Italy, Spain, the Netherlands and the U.S. remained among the five least competitive markets. Bulgaria, Portugal, Malta, and South Africa were among the five most competitive markets.

LEI renewal rates

In the second quarter of 2018, the overall renewal rate1 of 66.6 percent remained essentially unchanged compared to the previous two quarters. At the end of the second quarter of 2018, 84 percent of all LEIs were in good standing (no change compared to the previous quarter). In the reporting period, these five countries demonstrated the highest renewal rates: Japan (90.1 percent), Finland (85.8 percent), Austria (79.9 percent), Switzerland (76.5 percent) and Norway (76.0 percent).

Transfer of LEIs

Following the accreditation of GS1 AISBL by GLEIF as an LEI issuer, GS1 Germany GmbH transferred all LEIs under its management to GS1 AISBL. Going forward, GS1 Germany GmbH will operate as a Registration Agent. (A Registration Agent helps legal entities to access the network of LEI issuing organizations responsible for performing LEI issuance and related services.)

Global LEI System Business Report | Q2 2018 | page 02

SummaryState of play of LEI issuance and LEI growth potential

At the end of the second quarter of 2018, the total LEI population neared 1.2 million. Approximately 71,300 LEIs were issued in the second quarter of 2018 compared to approximately 167,000 in the first quarter. This represents a growth rate of 6.3 percent in the second quarter (first quarter: 17.8 percent).

LEI issuance in the second quarter of 2018 confirms that the market is well prepared to comply with the LEI requirements established under the European Union revised Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR), which took effect on 3 January 2018. According to MiFIR, investment firms should obtain LEIs from their clients before providing services which would trigger related reporting obligations.

Reflecting this development, the European Securities and Markets Authority (ESMA) confirmed on 20 June 2018 that transitional arrangements relevant to the LEI requirements under MiFID II / MiFIR introduced in December 2017 “will not be further extended”. The six-month temporary period “will last until the 2nd July 2018, including.” (On 20 December 2017, ESMA had stated that it allowed for a

“period of six months that investment firms may provide a service triggering the obligation to submit a transaction report to the client, from which it did not previously obtain an LEI code, under the condition that before providing such service the investment firm obtains the necessary documentation from this client to apply for an LEI code on his behalf.”) ESMA and national competent authorities

“have concluded that there is no need to extend the initial six month period granted to support the smooth introduction of the LEI requirements under MiFIR.”

Level 1 reference data corroboration

The business card information available with the LEI reference data, e.g. the official name of a legal entity and its registered address, is referred to as ‘Level 1’ data. It provides the answer to the question of ‘who is who’. The Level 1 data is considered fully corroborated if, based on the validation procedures in use by the LEI issuer responsible for managing an LEI record, there is sufficient information contained in authoritative public sources to corroborate the information that the legal entity has provided for the record. If this is not the case, the business card information available with an LEI record is classified as ‘entity-supplied only’. In the second quarter of 2018, the percentage of fully corroborated Level 1 reference data decreased to 76.1 percent (first quarter: 84.6 percent). This change reflects the fact that the largest LEI issuer, Business Entity Data B.V, adjusted the status of a significant number of historic LEIs under its management from ‘fully corroborated’ to ‘entity-supplied only’. GLEIF is investigating the matter.

Statistics on the reporting of parent information by legal entities

By the end of the second quarter of 2018, about 1.1 million LEI registrants representing 93 percent of the total LEI population reported information on direct and ultimate parents (previous quarter: 75 percent). The percentage of legal entities that cited legal obstacles preventing them from providing or publishing parent information increased substantially from 4 percent to 19 percent. This is due to a change in reporting by one LEI Issuer, Business Entity Data B.V. This change in reporting is erroneous and is expected to be remediated during the third quarter of 2018.

1 This includes countries with at least 1,000 LEIs in total at the previous quarter-end date.



105,869

163,365

12,175

48,019

45,989

26,742

84,468

17,668

23,018

19,435

20,920

15,320

2,156

4,239

1,2652,553

1,081

1,591

9,154

3,185

7,7392,254

1,460

1,213

2,732

9,168 4,481

1,401

1,086

5,261

3,592

4,065

1,082

438

413

133

911

315

210

853

642

122

983

746

896

276

900

204

575

506

446

275

50

11

61

36

45

28

1372

12

76

63

21

87

15

22

18

79

47

99

15

12

19

8013

95

26

22

38

47

25

23

13

74

10

25

3

6

5

5

7

32

7

4

4

6

3

2

72

5

1

1

1

2

1

3

7

4

5

1

8

1

2

4

4

7

2

Active LEIs

Total Number of Active LEIs by Countries | Fig.-1


Level 1 data report

Q2 2018



Active LEIs

Total LEI Trend-Top 5 Countries | Fig.-2 Total LEI Trend-Top 5 LEI issuers | Fig.-3

Tsd.

180

160

140

120

100

80

60

40

20

0

Tsd.

400

350

300

250

200

150

100

50

0

Q3–2017 Q3–2017Q4–2017 Q4–2017Q1–2018 Q1–2018Q2–2018 Q2–2018

United States

United Kingdom

Germany

Netherlands

Italy

Business Entity Data BVLondon Stock ExchangeWM DatenserviceKamer van Koophandel (KvK)InfoCamere




Growth in Total Number of Active LEIs

New LEI Issuance | Fig.- 4

Quarterly LEI Growth – Top 5 Countries | Fig.- 61

LEI Forecast | Fig.-5

Quarterly LEI Growth – Top 5 LEI issuers | Fig.-7

Tsd.

1,400

1,200

1,000

800

600

400

200

0

Q3–2017 Q1–2018Q4–2017 Q2–2018

Growth rate of countries Total issuance in thousands at most recent quarter-end date in parenthesis

Growth rate of LEI issuers Total issuance in thousands at most recent quarter-end date in parenthesis

Q1–2018 Q3–2018Q2–2018 Q4–2018

Total LEI issued

100.5%

24.7%15.8% 15.2%

11.1%

106.1%

52.4%

35.9%19.0% 15.4%

Slovenia (2)

Mexico (2)

Portugal (5)

Estonia (4)

India(9)

1. Analysis includes only those countries with at least 1,000 LEIs in total at the previous quarter-end date

Bloomberg (56)

KDD Slovenia (3)

LEIL (8)

Federal Statistical Office (4)

EQS (15)


Forecasted Active LEI Actual Active LEI

1,069,000

1,164,0001,182,0001,194,265

1,200,000

1,123,014

New issuance



LEI Renewal Activity

Reference Data Corroboration by LEI issuers

LEI Renewal | Fig.- 8

LEI Renewal – Top 5 Countries | Fig.-91

LEI non-Renewal (Lapsed LEIs) – Top 5 Countries | Fig.-101

Q3–2017 Q4–2017

Non-Renewal ratio of countries Total issuance in thousands at most recent quarter-end date in parenthesis

Q1–2018 Q2–2018

Total Active LEIs

Active and verified LEIs

90.1%

85.8%

79.9%76.5%

76.0%

Austria(22)

Switzerland(12)

Norway(21)

Finland(23)

Japan (8)

62.8%55.5%

54.4%44.6% 42.8%

Brazil(1)

United States(163)

Virgin Islands, British (18)

Mexico(2)

Denmark(48)


Percentage of Fully Corroborated LEIs | Fig.- 11

Q3–2017 Q4–2017 Q1–2018 Q2–2018

Tsd.

1,200

1,000

800

600

400

200

0

87.2% 84.8% 84.6%76.1%

Renewal ratios of countriesTotal issuance in thousands at most recent quarter-end date in parenthesis

1. Analysis includes only those countries with at least 1,000 LEIs in total at the previous quarter-end date



Competition amongst LEI issuers

Least Competitive (Most Concentrated) Markets | Fig.-121 Most Competitive (Least Concentrated) Markets | Fig.-131

Concentration score of countriesTotal issuance in thousands at most recent quarter-end date in parenthesis

Number of LEIs transferred outTotal issuance in thousands at most recent quarter-end date in parenthesis

Number of LEIs transferred inTotal issuance in thousands at most recent quarter-end date in parenthesis

Concentration score of countriesTotal issuance in thousands at most recent quarter-end date in parenthesis

1 Analysis includes only those countries with at least 1,000 LEIs in total at the previous quarter-end date. The higher the percentage the more concentrated LEI management is with a single LEI issuer.

Bulgaria(2)

Portugal(5)

Malta(3)

South Africa (1)

Cyprus(5)

Transfers out of LEIs – Top 5 LEI issuers | Fig.-14 Transfers in of LEIs – Top 5 LEI issuers | Fig.-15

EQS(15)

91.6%

19.9% 20.8%21.0% 23.3% 24.2%

89.5% 88.9% 88.4% 86.8%

Italy(87)

Spain(84)

Netherlands(93)

United States (163)

Finland(23)


22,848 22,983

810 667577 594268 316

139 138

London Stock Exchange(156)

Business Entity Data BV(386)

Federal Statistical Office (4)

Insee(56)

Business Entity Data BV(386)

Bloomberg(56)

GS1 Germany(–)

WM Datenservice(121)

GS1 AISBL(25)



Each legal entity reports information on its ultimate parent3:

Each legal entity reports information on its direct parent2:

Level 2 data report

Q2 2018


69% of legal entities reported having no ultimate parent according to the definition used

6% of legal entities reported ulti-mate parents having an LEI4

(See next page for additional details.)

6% of legal entities reported ulti-mate parents who do not have an LEI

19% of legal entities cited legal obstacles preventing them from providing or publishing ultimate parent information

1,109,522 legal entities reported level 2 data in May 2017 through June 2018

6% of legal entities reported direct parents having an LEI4

(See next page for additional details.)

6% of legal entities reported direct parents who do not have an LEI

69% of legal entities reported having no direct parent according to the definition used

19% of legal entities cited legal obstacles preventing them from providing or publishing direct parent information

1 Referenced to level 2 relationship record CDF concatenated file dated 04 July 20182 99.9% legal entities reported direct parent3 99.9% legal entities reported ultimate parent4 The definitions of ultimate and direct parent are based on percentage share of accounting consolidation as per LEI Regulatory Oversight Committee prescription.

Related link https://www.gleif.org/en/about-lei/common-data-file-format/level-2-data-reporting-exceptions-format

Top 5 countries of the legal entities for level 2 reporting | Fig.-1

162,654

125,083 90,52779,980

72,428

Spain ItalyUnited Kingdom

UnitedStates

Germany

In May 2017, the process of enhancing the LEI data pool, by including ‘Level 2’ data to answer the question of ‘who owns whom’, began. The graphic below provides information on direct and ultimate parent data collected through June 20181.


Level 2 data report

Q2 2018


Number of ultimate parents | Fig.-5Number of direct parents | Fig.-3

Additional information on ultimate parents having an LEI

Identification of the direct and ultimate parents of a legal entity with an LEI allows users to research entities owned by individual companies. It provides a better understanding of the entity from which a company or individual is buying goods or services or in which it is investing. The following charts provide additional information on relationships where the direct or ultimate parents are identified by an LEI.

Additional information on direct parents having an LEI

1 2 3 4 5 5 plus1 2 3 4 5 5 plus

Number of child entities per parentNumber of child entities per parent

Tsd.

9

7

5

3

2

0

Tsd.

14

12

10

8

6

4

2

0

Validation status of the ultimate parent relationship | Fig.-4

Validation status of the direct parent relationship | Fig.-2

DISCLAIMER: All figures of this Global LEI System Business Report are derived from the Global Legal Entity Identifier Foundation (GLEIF)‘s LEI-Common Data File (CDF) format version 2.1, Relationship Record (RR) CDF format version 1.1 and Reporting Exceptions format version 1.1 excluding LEIs with registration statuses DUPLICATE, ANNULLED, MERGED and RETIRED. While every care has been taken in the compilation of this information, GLEIF will not be held responsible for any loss, damage or inconvenience caused because of inaccuracy or error within the Global LEI System Business Report. The text and graphic content of the Global LEI System Business Report may be used, printed and distributed ONLY with the copyright information displayed (© Copyright Global Legal Entity Identifier Foundation (GLEIF)).

3% Partially corroborated

3% Partially corroborated

70% Entity supplied only

64% Entity supplied only

27% Fully corroborated

33% Fully corroborated

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