ROC Rule Changes Force Purge Of CICIs

More than 86,000 entities registered with the CFTC Interim Compliant Identifier (CICI) utility, and the many organizations that download data from it, will be impacted by changes being made to its portal and processes to ensure it complies with new guidance published by the Regulatory Oversight Committee (ROC), which is administering the legal entity identifier (LEI).

On July 27, the ROC published a series of principles that pre-Local Operating Units (pre-LOUs), such as the CICI utility, must comply with to integrate with the interim global LEI system. The principles provide additional details about the use of the ISO 17442 standard, the process for registering for pre-LEIs and measures for ensuring records are unique.

To comply with the ROC principles, the operators of the CICI utility—Swift and the Depository Trust and Clearing Corporation (DTCC)—will have to remove approximately 18,000 CICIs that do not satisfy its requirements. They must change the utility's policy of issuing CICI numbers before all data validation work is complete and will have to add five additional ISO 17442 data fields to the utility's portal and database.

The ROC's detailed principles state that the only pre-LEIs accepted within the interim global LEI system are those that were registered by an entity itself or by a third party with the entity's explicit permission, and those that have already been used for regulatory reporting.

As a result, Swift and DTCC will remove 18,000 records that do not meet this requirement. The records were registered with the CICI utility before November 16, 2012, when the utility changed its rules regarding third-party registration.

The CICI utility is also changing its procedure for issuing CICIs to comply with the ROC requirement that pre-LEI numbers may only be issued to new registrants after the validation process is complete.

Paul Janssens, Swift's Namur, Belgium-based LEI program director, says CICIs have been issued before data validation is complete, because when the CICI utility was established, it was important to issue CICIs quickly so users could comply with regulatory requirements.

"As per requirements that were agreed upon by various industry players, the idea was to be able to issue a code as soon as possible, because codes are needed for reporting transactions and therefore entities," says Janssens. "Certainly in the run-up [to the implementation of reporting requirements], this was essential because not everybody had a code at the starting time. Now the principles, as defined by the ROC, require that the validation process is complete before the code is issued, so that will change."

The ROC pre-LOU principles also mean five additional ISO 17442 fields must be added to CICI records. These include headquarters address, business registry name, business registry number, date of expiry and reason for expiry. Janssens says these fields were not previously included because the CICI utility was designed before the ISO 177442 standard was completed.

Janssens says Swift and DTCC expect to capture some of the additional data fields by asking entities to supply it when they perform the mandatory annual recertification of their data. He says the plan is to start introducing the changes before the end of August.

Janssens says users of the CICI utility will have to make changes as a result of the modifications Swift and DTCC are introducing. "If we add fields to the data, it means those users consuming the data today will have to make some changes in their systems as well, so they are ready to start receiving and uploading the new information in their respective reference data systems," says Janssens.

The CICI utility was the first pre-LOU launched in August 2012. It has issued more than 80,000 more pre-LEIs than the other three pre-LOUs combined.

Florian Sicherl, WM Datenservice's Frankfurt-based head of LEI project management, says its Germany Entity Identifier utility, which has issued nearly 2,200 codes, "meets most [of the ROC] requirements." He says there are no plans "for any major adjustments" as a result of the ROC principle, but adds the utility will publish another XML file with all the required ISO data before the end of August.

A spokesperson for the LEI France utility, which has issued more than 60 of its pre-LEIs, says it believes it is compliant with the ROC principles.

Emma Kalliomäki, the London Stock Exchange's (LSE) London-based head of SEDOL masterfile, says she believes the company's pre-LOU is compliant with the ROC principles. However, she says the LSE will continue to work on the portability functionality of its pre-LOU, which was launched August 5.