RBI moots legal entity identifier for bond, money markets by October end

The Reserve Bank of India (RBI) suggested a road map to implement the legal entity identifier (LEI) code for entities trading in government securities and money markets by the end of October. For foreign exchange markets, by end-January 2019. LEI is a 20-character unique identity code, assigned to entities which are parties to a financial transaction. It was conceived as a key measure to improve quality and accuracy of financial data systems, in the wake of the global financial crisis.

RBI in its draft plan has said participants, other than individuals, undertaking transactions in the markets it regulates shall obtain LEI codes as in the schedule. Only entities that get this on or before the due dates will be allowed to transact in these financial markets. The system has been already implemented in a phased manner for participants (other than individuals) in the over-the-counter markets for rupee interest rate derivatives, foreign currency derivatives and credit derivatives in India. Transactions undertaken on recognised stock exchanges are outside the purview of the LEI requirement. It is also not required for transactions in foreign exchange markets involving an amount less than $100,000 or equivalent in other currencies.

Entities operating trading and reporting platforms in the markets identified would be required to capture the LEI code of the transacting participants, RBI added.