Swift Wins ISO Vote for RA Role

Swift has been selected as the registration authority (RA) for the new International Organization for Standardization (ISO) standard for legal entity identification (LEI), following a one-month ISO TC68 voting process, where members could vote on proposals from Swift and the Association of National Numbering Agencies (Anna).

Brussels-based Paul Janssens, senior product manager, reference data, Swift, says the next step is for Swift to sign an RA agreement with ISO, and this process has already started. “We are prepared to sign, and we have experience in that from other standards, such as BIC and IBAN,” he says, explaining that it is now up to the legal team to review the contract.

The proposal document submitted for review included details on Swift’s experience as a registration authority and the plans to work with the Depository Trust & Clearing Corporation, using the Avox data collection and cleansing capabilities.

At an industry meeting in London in April, Swift presented the latest developments on the LEI process. Janssens then said it could benefit the market to have Swift as the RA, as BIC codes and LEI codes will need to be mapped. Swift is the registration authority for the BIC, and “if we are the registration authority for both we can map the identifiers so that implementation costs are minimized,” he said.

ISO Group Proposes 20-Character ID
Meanwhile, the ISO legal entity identifier working group has now said the new identifier proposed is a 20-character code, which is being circulated for voting as part of the ISO standard process.

The proposed standard is an alphanumeric code with one or two check digits and without embedded intelligence. ISO member countries have until late June to vote and comment on this, and if there were to be any comments, some market participants say they could relate to the length of the code, the methodology used for check digits and the decision not to include a country code.

The new code is longer than some of the other standards that have been proposed for identifying legal entities, such as the 11-character BIC code and the 13-digit Global Location Number, also ISO standards. The reason the working group suggested the new code should be 20 characters was linked to the work done on the issuer and guarantor identifier (IGI).

IGI was also 20 characters long, but the ISO study group reviewing legal entity identification recommended that instead of using the IGI or BIC, ISO should have a new standard without intelligence.

“It was agreed to make the new standard 20-characters long—18 alphanumeric characters and one to two check digits—because the group felt there was merit in the original principles behind the work to develop an IGI standard,” says Anna chairman Dan Kuhnel.

The length of the new standard could become a topic of discussion, as some market participants say there are enough combinations to cover all entities even if using a lot fewer characters.

In addition, another feature of the code is the check digits. Many identifiers include check digits that enable firms to automatically verify the code has been inputted correctly. The group decided the check digit formula used for the ISIN standard should not be used for the new legal entity identifier, as that formula is not an official ISO standard, explains Kuhnel.

Zurich-based Nourredine Yous, chair of ISO sub-committee 4 (SC4), and head of reference data management at SIX Telekurs, who co-leads the Identifier Study Group at the ISO TC68 level, says the check digit formula proposed in the new LEI standard is modulo 97, which is also used for IBAN codes. But Yous does not expect to see any specific part of the identification structure to be debated. “Whatever the comments are, I’ve never seen a structure of a standard change following the country voting process,” he says.

The main area of disagreement in the legal entity identification discussion has so far been the need for the identifier to include a country code. The proposed standard does not include a country code, or any other intelligence, which is what it has been interpreted that the US regulators are requesting.

Anna’s Kuhnel says standard bodies in Europe have still expressed an interest in having a country code. Both the proposed IGI and BIC standards as a legal entity identifier originally included country codes. “In the new proposal, it was left open to include or link to a country code,” he says.