CUSIP, DTCC to Simplify Legal Entity ID Process
February 28, 2013
CUSIP Global Services will work The Depository Trust & Clearing Corporation (DTCC) to create a Legal Entity Identifier (LEI) application process that allows users to simultaneously apply for CUSIP numbers and interim compliant identifiers required by the Commodity Futures Trading Commission.
Those identifiers, known as CICIs, are antecedents to LEIs, which are still in final stages of launch, through the global Financial Stability Board.
“CUSIP will act as an interface conduit to DTCC’s CICI repository,” says CUSIP spokesman John Roderick. Both DTCC and CME Group have been vying to dominate the processing and storage of CICIs (Commodity Futures Trading Commission Interim Compliant Identifiers). Both have established so called Swaps Data Repositories (SROs), for keeping details on swap transactions overseen by the CFTC.
A CUSIP identifies most securities, including: stocks of all registered U.S. and Canadian companies, and U.S. government and municipal bonds. The CUSIP system—owned by the American Bankers Association and operated by Standard & Poor’s—facilitates the clearing and settlement process of securities.
The number consists of nine characters (including letters and numbers) that uniquely identify a company or issuer and the type of security. A similar system is used to identify foreign securities (CUSIP International Numbering System). Now with the DTCC partnership that number will be applied to the Swaps as they’re added to the DTCC SRO.
DTCC and CUSIP, have a long standing relationship. This collaboration aims to assist market participants who must have legal entity identifiers (LEIs) to meet new regulatory requirements, increase market efficiencies regarding LEI registration, and aid widespread adoption of LEIs.
Under this new arrangement, CUSIP will develop an integrated interface with the CICI Utility, offering issuers a streamlined solution to simultaneously apply for both CUSIP numbers and CICIs by using a single interface. This assistance with registration will greatly aid issuers by making the adoption and maintenance of legal entity identifiers (LEIs) a seamless part of the new security issuance workflow.
The CICI Utility, developed by DTCC in conjunction with SWIFT, is part of a larger global effort to solve a long-standing problem: how to standardize the identification of legal entities that engage in financial transactions, and make entity reference data readily accessible.
That global effort is now led by a Regulatory Oversight Committee established in January, which includes financial regulators from around the world.
CICIs will transition into LEIs once the global LEI system is operational.