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FRB Proposes Adding LEIs to Bank Reporting Forms
Practical Law Legal Update 6-605-5026 (Approx. 4 pages)
FRB Proposes Adding LEIs to Bank Reporting Forms
by Practical Law Finance
| Published on 23 Mar 2015 • USA (National/Federal) |
The Federal Reserve Board announced a proposal that would require banking organizations to include their existing legal entity identifiers (LEIs) on certain additional regulatory reporting forms.
On March 16, 2015, the Federal Reserve Board (FRB) announced a proposal that would require banking organizations to include their existing legal entity identifiers (LEIs) on certain regulatory reporting forms. The LEI is a unique, 20-letter alphanumeric identification code associated with a legally distinct entity that engages in a financial transaction. LEIs are not yet required by all US regulators, however, the FRB already requires them in certain reports.
Under the proposal, the FRB would collect the LEI for all banking and nonbanking legal activities reportable on the banking, nonbanking, savings and loan holding company, and 4(k) schedules of the FR Y-10. The FR Y-10 is a report that provides data on organizational structure changes for a number of reportable companies, including top-tier bank holding companies and savings and loan holding companies.
The proposal would also, effective with the fiscal year beginning on June 30, 2015, add the LEI to the organizational charts for the:
- FR Y-6 (a report, filed by all top-tier holding companies, that requires the submission of an organizational chart and an annual verification of domestic branches within the organization and includes information on the identity, percentage ownership and business interests of principal shareholders, directors and executive officers).
- FR Y-7 (an annual report of foreign banking organizations (FBOs) that have a US banking presence that collects financial statements, organizational structure information, shares and shareholder information and data on the eligibility to be a qualified FBO).
The proposal would only require the reporting of an LEI if one has already been issued for the reportable entity at the time of collection. Under the proposal, the FRB would not require an LEI to be obtained for the sole purpose of reporting the LEI on the FR Y-6, FR Y-7 and FR Y-10.
According to the FRB, a uniform, global LEI would assist regulators to more effectively measure and monitor systemic risk and counterparty exposure, as well as improve operational efficiencies. The aim of the LEI system is to uniquely identify counterparties to financial transactions and to provide high-quality reference data (such as names, addresses and basic ownership information) for them. LEIs are designed to enhance and standardize global transactional data reporting and identification. For more background on LEIs, see Legal Updates, US Treasury Releases Plan for LEIs (Legal Entity Identifiers) and FSB Notice on Technical Features of the Legal Entity Identifier.
The FRB is requesting public comment on whether collecting existing LEI information only from entities that are reportable on the FR Y-10 would be sufficient rather than collecting LEI information from all entities reportable on the FR Y-6 and FR Y-7 organizational charts. Comments are due on or before May 19, 2015. Paper comments should be addressed to Robert deV. Frierson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW., Washington, DC 20551. Online submission can be sent by email to [email protected]. Submissions can also be faxed to 202-452-3819 or 202-452-3102. All submissions should be identified by FR Y-6, FR Y-7, FR Y-10 or FR Y-10E.