REFERENCE

DATA

Alacra Reference Data Alert

march

2015

Inside the LEIIssue V

Recent conversations with executives close to the GLEIF (Global Legal Entity
Identification Foundation) revealed an underlying conflict in the creation of the
LEI database. The LEI registration process and data collection activities are being
optimized for three constituencies: the regulators, the registrants, and the Local
Operating Units (LOUs). However, a fourth constituency, equal in importance to the
other three, has been ignored. These are non-regulatory data consumers who are
ultimately the users of the LEI. Unless the data can be widely utilized for purposes
other than transaction reporting, the vision of a ubiquitous LEI solving a broad
range of financial market problems will not be realized.
Alacras current analysis indicates that, while the number of registered entities
has increased, quality and utility issues within the database have increased as well.
For example, there are now a large number (about 50,000) of lapsed entities in
the database. The Tokyo-based LOU is registering entities in Japanese, which may
be appropriate, but makes it difficult for many firms to consume the data as their
systems do not recognize Japanese characters. And coverage of entities where there
has been a regulatory mandate or recommendation is still not complete, so the
LEI universe is an eclectic set of entities.

Overlap between Alacra Authority File and LEI Universe

These issues (and many others) can be

resolved but a stronger central presence
(the GLEIF) needs to step in to insist on

Overlap

better process, better quality, and better

26,381

coverage.
The Alacra Authority File provides
reference data and entity identifier

Listed
Rated
Regulated

215,813

LEI
Universe

336,480

mapping on a universe of over 200,000

entities that are either rated, regulated
or listed. This dataset contains
most of the common customers and
counterparties of large, global financial
institutions. The chart to the left shows
the overlap between the rated, regulated
and listed universe and the LEI universe
(without the entities registered by the
Japanese LOU).

Number of LEIs Assigned by LOU

Turkey
Takasbank
Slovakia
Central Securities Depository
Russia
National Settlement Depository
Luxembourg
LuxCSD
Norway
Brnnysund Register Centre

This chart shows the number of LEIs that have

been assigned by 17 of the 21 endorsed LOUs.

CEIReg
Bundesanzeiger Verlag

The GMEI has assigned about twice as many

Finland
Finnish Patent and Registration Office

LEIs as the rest of the LOUs combined.

Ireland
Irish Stock Exchange
Poland
Krajowy Depozyt Papierw Wartosciowych S.A.
Czech Republic
Central Securities Depository
Spain
Registro Mercantil de Madrid
Netherlands
Dutch Chamber of Commerce
France
INSEE
Italy
Unone Italiana per le Camere
IEI
London Stock Exchange
GEI
WM Datenservice
GMEI
DTCC/SWIFT
0

20,000

40,000

60,000

80,000

100,000

120,000

140,000 160,000

+

180,000

Percentage of Listed Entities Assigned an LEI

Listed with LEI

15%

Listed without LEI

85%

Alacra tracks all entities that have either a debt or equity listing on a global exchange.
Of the 88,177 entities that are listed, only 15% have been assigned an LEI.



Percentage of Rated Entities Assigned an LEI

Rated with LEI

16%

Rated without LEI

84%

The rated universe Alacra covers includes those entities/issuers rated by A.M. Best,
Fitch, Moodys, and S&P. This totals around 70,000 entities globally. About 16% of
these entities have been assigned an LEI, a slight increase from November 2014.

Percentage of Regulated Entities Assigned an LEI

IC

AS

RA

FI

FC
US
A
Fe
Re d
se era
rv l
e

dv
.

v.
A

In

AF

N
FA

89+74+67+21+20+11+9+4+4
M

20%

SE
C

40%

n
de B a
Fr nq
an ue
ce

60%

Fi

80%

Ba

100%

Alacra tracks the regulatory status of legal entities around the world. We monitor
over 50 global financial market regulators that are currently regulating about
85,000 entities. Ideally all regulated entities worldwide would have an LEI,
replacing the entity identifiers currently used by regulatory bodies.

Top 10 Registration Domiciles for LEIs

90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000

n
Sw
ed
en

ai
Sp

ng
do
Lu
m
xe
m
bo
ur
N
g
et
he
rl
an
ds
Ca
na
da

ce
ite

Ki

Fr
an

al
y
It

y
an
rm

Ge

Un

Un

ite

St

at
es

The United States continues to be the country with the largest number of LEI
entities. The top 4 countriesthe US, Germany, Italy and Franceare the
domicile for about 50% of the entities that have received an LEI.

+5+

Percentage of LEI Entities that are Either Funds, Trusts, or SPVs

Funds

16%

Trusts & SPVs

5%

Other entity types

79%

Similar to our analysis in November 2014, about 21% of all the entities that have
been assigned an LEI are either a fund, a trust, or an SPV.

LEI Registrations in the G20

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

ic

of

Ko
re
a
Ru
ss
ia
Tu
rk
So
ey
ut
h
Af
ric
a
In
do
ne
si
a
Ar
ge
nt
in
Sa
a
ud
iA
ra
bi
a

di
In

in

pa

Ch

co

Ja

il

ex
i

ia

Br
az

da

ra
l

Au

st

na
Ca

ce

do

ng

Fr
an

Ki

bl

ed

Re

Un

pu

it

al
y
It

an

Ge

Un
it
ed

rm

St
at
es

In June 2015 it will be 3 years since the G20 endorsed the establishment of the LEI
registration system. In most G20 countries adoption has been modest.



Percentage of BICs Assigned an LEI

BICs with LEI

20%

BICs without LEI

80%

There are about 34,000 top-level BIC entities. (A BIC is a business identifier code
for financial and non-financial institutions used for addressing messages, routing
business transactions and identifying business parties. SWIFT is the registration
authority for BICs.) About 20% of entities that have been assigned a BIC have also
been assigned an LEI, a slight increase since 2014.
5

Top 10 Legal Forms for GMEI Registered Entities

+76432+


Cayman Islands Ordinary Non-Resident Company

Incorporated/Incorporee

3%

Privata Aktiebolag

2%

Cayman Islands Exempted Limited Partnership

2%

4%

Limited

6%

Other

Limited
Partnership

37%

6%

Corporation

7%

Incorporated

10%

Limited
Liability Company

23%

The GMEI utility, which has assigned about half the total number of LEIs, allows a
registrant to submit its legal form during the registration process. Currently over
200 different legal forms have been submitted, but the most common legal form,
making up over one-third of the total, is Other.

LEIs Assigned to Large Fund Families

Raiffeisen
Blackrock
HSBC
Allianz
BNP
Fidelity
Pimco
Axa
iShares
Aberdeen
Vanguard
RBS
Bernstein
RBC
Aegon
Putnam
BNY Mellon
Scottish Widows

Lombard Odier
Ashmore

200

400

600

800

1000

1,200

1,400

In all our previous issues of Inside the LEI, Blackrock was the fund family with
the largest number of entities having an LEI. Raiffeisen has now taken the lead
with about 1,300 funds registered.



EBA Entities that have been Assigned an LEI

EBAs
with LEIs

50%

EBAs
without LEIs

50%

In January 2014 the European Banking Authority published a recommendation

on the use LEIs as a unique identification code for supervisory purposes. To date,
about 50% of EBA-supervised banks have registered for an LEI.

Some Interesting Counts

Number of entities with LLC in the name

29,572

Number of entities with L.L.C. in the name

2,913

Number of entities with LP in the name

7,975

Number of entities with L.P. in the name

6,356

Number of entities with Trust in the name

11,976

Number of entities with Limited Partnership in the name

1,310

Number of entities with CDO in the name

438

Number of entities with LLLP in the name

117

Number of entities with Vineyard in the name

61

Number of entities with Pizza in the name

42

Number of entities with ETF in the name

2,382

Number of entities with SICAV in the name

6,283

Number of entities with YMCA in the name

22

Number of entities with Country Club in the name

Number of entities with Segregated Portfolio in the name

118
787

A Look at Hierarchies
On a recent webinar, representatives of the GLEIF announced that work would begin on adding
hierarchy data to the LEI dataset this year. Hierarchies are critical for identifying systemic financial
risk and to solve for the Lehman problem in the event of another market meltdown. (At the time
of the financial crisis Lehman had over 7,000 legal entities in more than 40 countries. These
relationships proved difficult to untangle.)
In the US, companies are required to attach Exhibit 21 to their annual financial statement (10-K)
which lists their subsidiaries. The Alacra research team looked at the 2013 Morgan Stanley Exhibit
21 and found 883 subsidiaries. Of these, only 345 or 39% had an LEI assigned to it. To effectively
incorporate hierarchies into the LEI system a much greater percentage of financial institutions
subsidiaries need to have LEIs and the update cycle would need to be more frequent than annual (as
it is today). These are among a number of other challenges that exist before hierarchies can provide
value to consumers of LEI data. A sample of the Morgan Stanley hierarchy from December 31, 2013
can be seen below.
NAME

COUNTRY NAME

REGION

LEI

United States

DE

IGJSJL3JD5P30I6NJZ34

United States

DE

United Kingdom

ENW

Bayfine DE LLC

United States

DE

Belmondo LLC

United States

DE

549300U76MV4PBGZUE31

Cauca LLC

United States

DE

54930061FM3STX1F7868

United States

DE

Dean Witter Capital Corporation

United States

DE

Dean Witter Realty Inc.

United States

DE

United States

DE

United States

DE

Dean Witter Leasing Corporation

United States

DE

Realty Management Services Inc.

United States

DE

Dean Witter Reynolds Venture Equities Inc.

United States

DE

Early Adopter Fund Manager Inc.

United States

DE

Fuegos LLC

United States

DE

Fundlogic (Jersey) Limited

Jersey

n/a

FV-I, Inc.

United States

DE

United States

DE

Japan Core Funding, Inc.

United States

DE

549300ZM5ARC5JXSW343

Morgan Stanley Biscay LLC

United States

DE

549300IM3EO445XMHM97

Morgan Stanley
Bayfine DE Inc.
Bayfine UK3

Cournot Holdings Inc.

Dean Witter Holding Corporation

Civic Center Leasing Corporation

Bellevue Towers Condominiums, LLC

549300J73P3R1UCNKX05

Contact Us
AMERICAS (HQ)

EMEA & APAC

ALACRA RESEARCH TEAM

100 Broadway, Suite 1101

125 Old Broad Street, 6th Floor

Steve Ortman

New York, New York 10005

London EC2N 1AR

Colin duSaire

United States

United Kingdom

Matthew Donigian

+1 (212) 363-9620

+44 (0) 20 3059 5765

Christina Taylor

+1 (212) 363-9630

+44 (0) 20 3192 5577

Charlie Goldstein

info@alacra.com

www.alacra.com/reference-data-solutions/

03/15 2015 Alacra, Inc.