EACT Treasury Roundtable with Global Legal Entity Identifier Foundation (GLEIF) on use of the LEI in Treasury

On 4 February the EACT and the Global Legal Entity Identifier Foundation (GLEIF) hosted a roundtable with a number of senior corporate treasury representatives to discuss how the LEI and the global system it is embedded in can simplify, secure, and digitise processes across treasury departments.

The roundtable focused predominantly on use of the LEI in Know-Your-Customer (KYC) processes, in payments, and in invoicing. For all of these, the LEI system – as an open source database – provides opportunities for increasing the efficiency and security of the necessary processes, provided wider use of the LEI system were to be offered by financial counterparties or asked for by corporate end-users. For example issuance of an LEI could be incorporates as part of regular bank account opening procedures. This would result in an increase in LEIs issued and likely also drive down the cost of individual identifiers.

The LEI system incorporates regularly updated source data that is frequently requested by bank counterparties as part of KYC and customer due diligence (CDD) processes. This is information that relates to legal entity information, corporate structure, and data for authorised signatories. Therefore, encouraging use of the LEI for these processes would enable counterparties to directly access a golden source of information and ease ongoing compliance pressures felt by corporates of various sizes. This in turn would significantly contribute to reducing the potential for fraud or unauthorized use of bank accounts. Similarly, incorporating the LEI in payment messages and in e-invoicing procedures could help reduce the risk of fraud treasury department are confronted with as it would allow for verification of invoice issuers and payees, but also allow the matching of bank accounts against LEIs.

The roundtable participants agreed that there is significant untapped potential for wider use of the LEI system – also in cooperation with other industry led efforts such as those spearheaded by SWIFT like the SWIFT KYC Registry or SWIFT GPI. Participants agreed that there is a need for wider stakeholder participation and engagement to highlight possible benefits of the LEI system and encourage a wider uptake across the industry.

EACT will continue to remain engaged in this process and together with its members ensure that the views and suggestions of corporate treasurers – as one of the main stakeholder groups – are reflected in the ongoing discussions. 

Tarek Tranberg, Head of Public Affairs & Policy, EACT

Cornelia Hesse, Officer and Board Member, EACT

Articles


Photo from Flying Start: Taming SITA’s Vast and Complex Payments Set-up

Flying Start: Taming SITA’s Vast and Complex Payments Set-up

Determined to bring order to its payments infrastructure, SITA called upon Unifiedpost, and its cloud-based PowertoPay corporate payments hub, for help.

Read
Photo from Does a Health Crisis Have an Impact on Treasury Technology?

Does a Health Crisis Have an Impact on Treasury Technology?

The fundamental changes businesses are facing have inevitably impacted the way treasury is managed. Has the current health crisis had an impact on treasury technologies and the digital transformation of organisations?

Read
Photo from Regulatory Round-up with the EACT

Regulatory Round-up with the EACT

With the current European Parliament’s term running from 2019 to 2024, now is a good time to cast an eye over what is and what will be in terms of financial market regulations.

Read
Photo from From Bitcoin to Central Bank Digital Currency (CBDC)

From Bitcoin to Central Bank Digital Currency (CBDC)

In recent months, we have seen the first steps of concerted moves towards CBDCs. This change of attitude is welcome as it complements other private and public initiatives in the world of payments which is innovating at a greater pace than ever.

Read
Photo from Stronger FX Hedging Strategies: a Pandemic Game-changer

Stronger FX Hedging Strategies: a Pandemic Game-changer

As the pandemic continues to throw markets into confusion, forcing corporates to battle against unprecedented volatility, treasury functions have an opportunity, albeit uninvited, to prove their strategic value – especially in relation to FX risk management.

Read