Global LEI System Business Report Q3 2018 · exceeded 1.2 million. Approximately 56,800 LEIs were issued of 4.8% in the third quarter (second quarter: 6.3%). when market participants

Global LEI System Business Report

Q3 2018

https://www.gleif.org/en

© 2018 GLEIF and/or its affiliates. All rights reserved. | Release date 2018-11-06 | Version 1.0 | Public

LEI renewal rates

In the third quarter of 2018, the overall renewal rate1 of 69.1% remained essentially unchanged compared to the previous two quarters. At the end of the third quarter of 2018, 81.8% of all LEIs were in good standing. The renewal rate in both the EU (70%) and non-EU countries (52.3%) remained stable.

In the reporting period, these five countries demonstrated the highest renewal rates: Japan (90.4%), Finland (89.5%), India (87.6%), Liechtenstein (87%) and Norway (82.7%).

Level 1 reference data corroboration

The business card information available with the LEI reference data, e.g. the official name of a legal entity and its registered address, is referred to as ‘Level 1’ data. It provides the answer to the question of ‘who is who’. The Level 1 data is considered fully corroborated if, based on the validation procedures in use by the LEI issuer, there is sufficient information contained in authoritative public sources to corroborate the information that the legal entity has provided for the record. If this is not the case, the business card information available with an LEI record is classified as ‘entity-supplied only’.

In the second quarter of 2018, the percentage of fully corrobo-rated Level 1 reference data within the entire LEI population decreased from 84.6% to 76.1%. This was triggered by the fact that the largest LEI issuer, Business Entity Data B.V., had suddenly adjusted the status of a significant number of historic LEIs under its management from ‘fully corroborated’ to ‘entity-supplied only’. Business Entity Data B.V. currently manages about 32% of the entire LEI population.

Specifically, in the second quarter of 2018, the percentage of fully corroborated Level 1 reference data for LEIs managed by Business Entity Data B.V. dropped sharply from 84.5% to 59.1%, which impacted the overall result for this metric as indicated. This issue should be solved by the end of 2018.

Global LEI System Business Report | Q3 2018 | page 02

SummaryState of play of LEI issuance and LEI growth potential

At the end of the third quarter of 2018, the total LEI population exceeded 1.2 million. Approximately 56,800 LEIs were issued in the third quarter of 2018 compared to approximately 71,300 in the second quarter. This represents a quarterly growth rate of 4.8% in the third quarter (second quarter: 6.3%).

A peak in LEI issuance was observed towards the end of 2017 when market participants readied to comply with the LEI requirements established under the European Union’s revised Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR), which took effect on 3 January 2018. Since then, average monthly issuance has stabilized at about 20,000 LEIs in 2018. This represents approximately double the number of newly issued LEIs per month compared to pre-MiFID II / MiFIR levels.

In the third consecutive quarter, India features the highest LEI growth rate at a country level (52.3%) followed by Mexico (36.5%) and Australia (22%). The increase in the LEI population in these countries is attributed primarily to regulatory action mandating the use of the LEI.

Competition in the Global LEI System

The report identifies the least and most competitive markets of those with more than 1,000 LEIs, based on the number of LEI issuers providing services in the country. In the third quarter of 2018, Italy, Spain, the Netherlands, the U.S. and Finland remained among the five least competitive markets in descending order. Romania, Lithuania, Portugal, Bulgaria and Malta were among the five most competitive markets in descending order.

Pending resolution of the matter by this LEI issuer, 76.6% of Level 1 reference data provided with the entire LEI data pool were identified as fully corroborated in the third quarter of 2018.

Statistics on the reporting of parent information by legal entities

In the second quarter of 2018, available statistics identified that approximately 1.1 million LEI registrants representing 93% of the total LEI population had reported information on direct and ultimate parents. However, Business Entity Data B.V. then informed that it had erroneously over-reported 100,000 LEIs that would have provided parent information in that quarter.

Based on adjusted information made available by Business Entity Data B.V., by the end of the third quarter of 2018, 1,081,323 LEI registrants representing 86% of the total LEI population reported information on direct and ultimate parents.

The overall percentage of legal entities that cited legal obstacles preventing them from providing or publishing parent infor-mation (‘opt-out’) increased substantially from 4% to 19% in the second quarter. This was due to a change in reporting by Business Entity Data B.V. In the third quarter of 2018, Business Entity Data B.V. reported that 30.2% of LEIs under its management would have opted out from providing parent information. As a result of reporting by this one LEI issuer, statistics for the entire LEI population indicate that 10% of legal entities would have cited legal obstacles preventing them from providing or publishing parent information.

It should be noted however, that the opt-out rate regarding the reporting of parent information for the LEI population exclud-ing the Business Entity Data B.V. portfolio drops to only 2.5%.

1 This includes countries with at least 1,000 LEIs in total at the previous quarter-end date.



27,505

169,664

2,943

957 16

2,318

3,416

18,72320,357

3,917

663

2

222

63

11

3

872

53

217

25

110

291

1,559

93

5 7

13 6

24

4

4

6

446

325

13

4

1

81

1,239

23,912

48,089

4,321

1,055

110,038

63,699

88,706

72

2,863 22

131

1

1124 67

29

2027

2623

1,155

20

3

18

7

3

1

135353 1,744

10112 5 4

28

49

13,961

19

1,499

129

556

59732

9

11,170

952

725

65

49

17

450

204

1.3045,695

5,222

50,050

92,085

129,412

12822,191

8

4695

2

24

86

974

7,837

4,734313

14

3 1.197

462

1687

89

1,141

1

4,454

933

1,004

11

72

28

801

Active LEIs

Total Number of Active LEIs by Countries | Fig.-1


Level 1 data report

Q3 2018



Active LEIs

Total LEI Trend-Top 5 Countries | Fig.-2 Total LEI Trend-Top 5 LEI issuers | Fig.-3

Tsd.

180

160

140

120

100

80

60

40

20

0

Tsd.

400

350

300

250

200

150

100

50

0

Q4–2017 Q4–2017Q1–2018 Q1–2018Q2–2018 Q2–2018Q3–2018 Q3–2018

United States

United Kingdom

Germany

Netherlands

Italy

Business Entity Data BVLondon Stock ExchangeWM DatenserviceKamer van Koophandel (KvK)InfoCamere




Growth in Total Number of Active LEIs

New LEI Issuance | Fig.- 4

Quarterly LEI Growth – Top 5 Countries | Fig.- 61

LEI Forecast | Fig.-5

Quarterly LEI Growth – Top 5 LEI issuers | Fig.-7

Tsd.

1,400

1,200

1,000

800

600

400

200

0

Q4–2017 Q1–2018Q1–2018 Q2–2018

Growth rate of countries Total issuance in thousands at most recent quarter-end date in parenthesis

Growth rate of LEI issuers Total issuance in thousands at most recent quarter-end date in parenthesis

Q2–2018 Q3–2018Q3–2018 Q4–2018

Total LEI issued

52.3%

36.5%

22.0%

10.6% 10.6%

47.0%

31.6%

20.8%

12.5% 11.3%

Belize (1)

Croatia (1)

Australia (11)

Mexico (3)

India(14)

1. Analysis includes only those countries with at least 1,000 LEIs in total at the previous quarter-end date

CFSTC (1)

Bloomberg (63)

LEIL (12)

Federal Statistical Office (5)

EQS (20)


Forecasted Active LEI Actual Active LEI

1,069,000

1,164,0001,182,0001,194,265

1,251,066 1,200,000

1,123,014

New issuance



LEI Renewal Activity

Reference Data Corroboration by LEI issuers

LEI Renewal | Fig.- 8

LEI Renewal – Top 5 Countries | Fig.-91

LEI non-Renewal (Lapsed LEIs) – Top 5 Countries | Fig.-101

Q4–2017 Q1–2018

Non-Renewal ratio of countries Total issuance in thousands at most recent quarter-end date in parenthesis

Q2–2018 Q3–2018

Total Active LEIs

Active and verified LEIs

90.4% 89.5% 87.6% 87.0% 82.7%

India(14)

Liechtenstein(10)

Norway(22)

Finland(24)

Japan (8)

62.1%55.6%

49.2%43.4% 42.0%

Brazil(2)

United States(170)

Virgin Islands, British (19)

Canada(28)

Hungary(8)


Percentage of Fully Corroborated LEIs | Fig.- 11

Q4–2017 Q1–2018 Q2–2018 Q3–2018

Tsd.

1,400

1,200

1,000

800

600

400

200

0

84.8% 84.6%76.1% 76.6%

Renewal ratios of countriesTotal issuance in thousands at most recent quarter-end date in parenthesis

1. Analysis includes only those countries with at least 1,000 LEIs in total at the previous quarter-end date



Competition amongst LEI issuers

Least Competitive (Most Concentrated) Markets | Fig.-121 Most Competitive (Least Concentrated) Markets | Fig.-131

Concentration score of countriesTotal issuance in thousands at most recent quarter-end date in parenthesis

Number of LEIs transferred outTotal issuance in thousands at most recent quarter-end date in parenthesis

Number of LEIs transferred inTotal issuance in thousands at most recent quarter-end date in parenthesis

Concentration score of countriesTotal issuance in thousands at most recent quarter-end date in parenthesis

1 Analysis includes only those countries with at least 1,000 LEIs in total at the previous quarter-end date. The higher the percentage the more concentrated LEI management is with a single LEI issuer.

Romania(3)

Lithuania(1)

Portugal(5)

Bulgaria(2)

Malta(3)

Transfers out of LEIs – Top 5 LEI issuers | Fig.-14 Transfers in of LEIs – Top 5 LEI issuers | Fig.-15

GS1 AISBL(26)

91.6%

17.1% 17.6%

19.7% 20.0% 20.6%89.0% 88.8% 87.2% 86.8%

Italy(92)

Spain(89)

Netherlands(95)

United States (170)

Finland(24)


1,633 1.523

499417

340308

193275

118152

GS1 AISBL(26)

Business Entity Data BV(399)

Federal Statistical Office (5)

LuxCSD(7)

London Stock Exchange(160)

EQS(20)

Business Entity Data BV(399)

WM Datenservice(124)

Bloomberg(63)



Each legal entity reports information on its ultimate parent3:

Each legal entity reports information on its direct parent2:

Level 2 data report

Q3 2018


76% of legal entities reported having no ultimate parent according to the definition used

7% of legal entities reported ulti-mate parents having an LEI4

(See next page for additional details.)

7% of legal entities reported ulti-mate parents who do not have an LEI

10% of legal entities cited legal obstacles preventing them from providing or publishing ultimate parent information

1,081,323 legal entities reported level 2 data by the end of Q3 2018

6% of legal entities reported direct parents having an LEI4

(See next page for additional details.)

7% of legal entities reported direct parents who do not have an LEI

77% of legal entities reported having no direct parent according to the definition used

10% of legal entities cited legal obstacles preventing them from providing or publishing direct parent information

1 Referenced to level 2 relationship record CDF concatenated file dated 01 October 20182 99.9% legal entities reported direct parent3 99.9% legal entities reported ultimate parent4 The definitions of ultimate and direct parent are based on percentage share of accounting consolidation as per LEI Regulatory Oversight Committee prescription.

Related link https://www.gleif.org/en/about-lei/common-data-file-format/level-2-data-reporting-exceptions-format

Top 5 countries of the legal entities for level 2 reporting | Fig.-1

126,492105,366

94,52784,149 83,839

Netherlands SpainUnited States

United Kingdom

Germany

In May 2017, the process of enhancing the LEI data pool, by including ‘Level 2’ data to answer the question of ‘who owns whom’, began. The graphic below provides information on direct and ultimate parent data collected through September 20181.


Level 2 data report

Q3 2018


Identification of the direct and ultimate parents of a legal entity with an LEI allows users to research entities owned by individual companies. It provides a better understanding of the entity from which a company or individual is buying goods or services or in which it is investing. The following charts provide additional information on relationships where the direct or ultimate parents are identified by an LEI.

Validation status of the direct parent relationship | Fig.-2

4% Partially corroborated

68% Entity supplied only

29% Fully corroborated

Validation status of the ultimate parent relationship | Fig.-4

3% Partially corroborated

61% Entity supplied only

35% Fully corroborated

DISCLAIMER: All figures of this Global LEI System Business Report are derived from the Global Legal Entity Identifier Foundation (GLEIF)‘s LEI-Common Data File (CDF) format version 2.1, Relationship Record (RR) CDF format version 1.1 and Reporting Exceptions format version 1.1 excluding LEIs with registration statuses DUPLICATE, ANNULLED, MERGED and RETIRED. While every care has been taken in the compilation of this information, GLEIF will not be held responsible for any loss, damage or inconvenience caused because of inaccuracy or error within the Global LEI System Business Report. The text and graphic content of the Global LEI System Business Report may be used, printed and distributed ONLY with the copyright information displayed (© Copyright Global Legal Entity Identifier Foundation (GLEIF)).

Number of direct parents | Fig.-3

1 2 3 4 5 5 plus

Number of child entities per parent

Tsd.1816141210

86420

Number of ultimate parents | Fig.-5

1 2 3 4 5 5 plus

Number of child entities per parent

Tsd.10

9876543210

Additional information on ultimate parents having an LEIAdditional information on direct parents having an LEI

Documents

Global LEI System Business Report Q3 2018 · exceeded 1.2 million. Approximately 56,800 LEIs were issued of 4.8% in the third quarter (second quarter: 6.3%). when market participants