Clearing Corporation of India to issue unique ID codes to legal entities
India will join global efforts to bring in transparency in OTC derivatives market to avoid a repeat of worst financial crisis seen in recent decades.
By ET Bureau | Updated:
MUMBAI: India is set to join global efforts to bring in transparency in over-the-counter (OTC) derivatives market as part of a series of measures being put in place to avoid a repeat of the worst financial crisis seen in recent decades that was triggered by the collapse of Lehman Brothers in September 2008.
On Tuesday, the Clearing Corporation of India (CCIL) — a clearing and settlement platform for OTC debt, forex, money market and derivative transactions — will become the 20th local operating unit under the Global Legal Entity Identifier System (GLEIS).
Legal Entity Identifier (LEI) is a 20-character global reference number that uniquely identifies every legal entity or structure that is party to a financial transaction, under any jurisdiction.
A critical part of the global financial reforms, GLEIS provides access to information on aggregate trades with different exposures to any legal entity in the world. It is expected to help regulators prevent systemic risk or at least mitigate its disastrous consequences. “It (LEI) is a step forward. This status gives some added confidence to foreign entities in India,” said BV Chaubal, deputy managing director and group executive (global markets) at State Bank of India. “This is part of market infrastructure. By introducing it, they are strengthening the market infrastructure.”
CCIL joins other agencies around the world that have already initiated the process of assigning LEIs. It will be able to assign LEIs — with codes in India beginning with ‘3358’ — to entities such as banks, mutual funds, partnership firms, companies, trusts, special purpose vehicles, corporate houses and other legal forms as notified by the Reserve Bank of India.
So far, about 3.2 lakh LEIs have been issued across the world. ISO ( International Organization for Standardization) 17442 certification has been laid down to achieve standardisation and exclusivity of LEI codes. “We have internally developed the software to develop LEI codes, which will be generated after four layers of duplication check,” a senior official told ET.
On Tuesday, the Clearing Corporation of India (CCIL) — a clearing and settlement platform for OTC debt, forex, money market and derivative transactions — will become the 20th local operating unit under the Global Legal Entity Identifier System (GLEIS).
Legal Entity Identifier (LEI) is a 20-character global reference number that uniquely identifies every legal entity or structure that is party to a financial transaction, under any jurisdiction.
A critical part of the global financial reforms, GLEIS provides access to information on aggregate trades with different exposures to any legal entity in the world. It is expected to help regulators prevent systemic risk or at least mitigate its disastrous consequences. “It (LEI) is a step forward. This status gives some added confidence to foreign entities in India,” said BV Chaubal, deputy managing director and group executive (global markets) at State Bank of India. “This is part of market infrastructure. By introducing it, they are strengthening the market infrastructure.”
CCIL joins other agencies around the world that have already initiated the process of assigning LEIs. It will be able to assign LEIs — with codes in India beginning with ‘3358’ — to entities such as banks, mutual funds, partnership firms, companies, trusts, special purpose vehicles, corporate houses and other legal forms as notified by the Reserve Bank of India.
So far, about 3.2 lakh LEIs have been issued across the world. ISO ( International Organization for Standardization) 17442 certification has been laid down to achieve standardisation and exclusivity of LEI codes. “We have internally developed the software to develop LEI codes, which will be generated after four layers of duplication check,” a senior official told ET.
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