Financial news

The Commonwealth Bank of Australia (CBA) has become the latest financial institution to be approved as a Validation Agent in the Global Legal Entity Identifier (LEI) System.

The Global Legal Entity Identifier Foundation (GLEIF) explained that by becoming the first Validation Agent based in Australia, CBA is now uniquely positioned to deliver a seamless experience for its clients when obtaining an LEI; while also realising significant operational efficiencies.

The news comes as converging industry developments are anticipated to drive a sharp increase in LEI adoption by SMEs and non-financial organisations across the region.

Key local initiatives shaping LEI adoption include updated over-the-counter (OTC) derivative transaction reporting rules from the Australian Securities & Investments Commission (ASIC).

Stephan Wolf, CEO of the Global Legal Entity Identifier Foundation, commented: “The continued expansion of the Validation Agent network further demonstrates the value derived for both the agent organisation and their clients, helping to deliver trust with increased simplicity, convenience, and expediency. And with industry momentum for the LEI gathering pace across the globe, GLEIF fully endorses and welcomes CBA’s commitment to proactively support its clients in getting ahead of the LEI adoption curve.”

The regulation, which comes into force in October 2024, mandates the LEI as the only permitted entity identifier for counterparty identification, phasing out the use of the AVID code and Business Identifier Code (BIC).

This will increase alignment with global market practices to reduce costs and complexity while helping to address the challenge of identifying smaller, non-financial counterparties.

Championing industry efforts

In its role as a Validation Agent, the Commonwealth Bank of Australia is also championing broader industry efforts to harmonise the use of identifiers to promote greater transparency and contribute to the fight against financial crime across the global economy.

Strong market traction stems from the support of key stakeholders advocating for the inclusion of the LEI within ISO 20022 payment messages.

GLEIF’s Validation Agent Framework enables financial institutions and other supervised organisations involved in legal entity identity verification and validation to obtain and maintain LEIs for their clients in cooperation with accredited LEI Issuers. Validation Agents achieve this by leveraging their ‘business-as-usual’ client identification procedures in Know Your Customer (KYC), client onboarding, or standard client refresh update processes.

The number of Validation Agents globally increased to 15, with the network now spanning Africa, Australia, China, Europe, India, the Middle East, as well as North America.