[LEI SHING HONG LIMITED Annual Report 2019]China Finance | LEI Practice and Exploration in China

2021-06-28 01:10:58

  

  Author | Zhang Yongfu “General Manager of China Finance Electronic Company, Executive Director of China National Financial Standardization Research Institute Co., Ltd.”

  Article | “China Finance” 2021 12th

  In the past three decades,Along with the rapid development of the global trade economy,The high speed of information technology has a huge economic digital network with high-speed popularization of information technology to construct global trade activities into a huge economic digital network.Interoperability between domestic and foreign financial supervision and financial activities in the world is more close,The demand for rapid connection between the legal entity is also more powerful.But due to lack of unified technical standards,Transaction subject definitions and rules have diversified,And subject to various factors such as policy, legal system, information monopoly, transaction fraud,The information acquisition of legal entity often needs to pay huge costs.The asymmetry of information also brings potential risks to multifongs participating in trade.Simultaneously,Financial Science and Technology has spawned various innovative financial instruments to bring huge challenges to prevent systematic risks in regulatory authorities.A real estimate of a unified legal person recognition system is urgently needed.

  The global legal person identifies the encoding system should be born

  An important reason for the international financial crisis in 2008 is thatFinancial markets, especially the hustle, complex and opaque in the field derivative market.The pricing and trading mechanism of innovative financial instruments is highly complex.Derivative chain is too long, too many traders,Most free from the regulatory framework,Directly lead to the supervision authorities unable to monitor the balance relationship between different departments,It is difficult to prevent the accumulation and outbreak of systematic risk.In order to build a global unified financial regulatory framework, improve systemic financial risk recognition capacity worldwide,Financial Stability Council (The Financial Stability Board,FSB) In July 2011, the FSB proposed to build a global legal person identification coding system (Global Legal Entity Identifier System,Gleis) motion,Assign the unique legal person to identify the code to participate in international transactions (Legal Entity Identifier,LEI),Strengthen information management of global participation in financial trading institutions,Easy to identify the transaction, improve the supervision of the global financial system, and prevent financial risks.

  The Gleis-dominated Gleis, which was held in June 2012, was officially recognized,The ISO 17442 standard defining the LEI coding structure and its reference data is released in the same year.In June 2013, Gleis completed the three-story organizational architecture.From the top, it is the regulatory committee (ROC), the LEI Foundation (Gleif) and the local system (LOU).

  ROC currently has 73 member agencies and 18 observation agencies.It mainly includes the Ministry of Finance, Central Bank, and Financial Regulators,And the Global Financial System Commission (CommTee on the Global Financial System), the Committee on Payment and Settlement Systems, the International Organization Officer (International Organization Of Securities Commysions).

  China’s research and contribution to the LEI system

  Financial Organization Code,FOC) is one of my country’s financial infrastructure.There is 14 meanings (last two as check code),The scope covers all financial institutions in China.To achieve identity identification, information sharing, risk prevention and other goals.Before the international financial crisis broke out,When the People’s Bank of China is studying the statistical related statistics of domestic financial industry agencies,It has been recognized that financial institutional identification risks may trigger risk hazards,In 2009, it began unifying domestic financial industry agencies and imparted FOC encoding.This is basically consistent with the 2011 FSB build LEI coding.In an open economic environment,FOC encoding is located “ID card” similar to domestic financial industry,LEI coding is similar to the “passport” of cross-border financial transactions.The basis of data exchange or fusion in the future.therefore,my country has studied in-depth study of FOC coding and LEI code.At the 2012 LEI Working Group (IG) fourth working meeting,It is recommended that the 7th to 18th of LEI encoding is allocated by each Lou.The meeting was obtained.after that,China’s legal person LEI code 7 ~ 18 digits use FOC encoded 1 ~ 12 digits,Lay the foundation for the automatic acquisition of LEI coding for the financial industry.

  For my country,Actively participate in Gleis construction,On the one hand, it is conducive to strengthening the information management of the legal person.Enhance the transparency of my country’s financial system,To a greater extent, systemic risks are avoided; on the other hand, it is also conducive to our country to play a greater role in the international financial sector.Enhance the right to discuss international financial affairs.It has opened up a new field for my country’s financial industry participation in international affairs and international exchanges.Lei encoding in the unified implementation of international financial transactions,Focus on the supervision responsibility of my country’s central bank, prevent financial risks to provide a valid path.

  China’s LEI system construction

  People’s Bank of China as ROC members,Unified Guidance and Coordination LEI Coding Domestic Falling Implementation.Lou is now set up in Beijing National Financial Standardization Research Institute (hereinafter referred to as “Golden Medium” in China Financial Electronic Electronics.Responsible for communication, internal research,In the early stage, the translation has written a large number of research materials.Simultaneously,Gold labard is based on the interpretation and research of national policies, legal persons and GLEIF new regulations.Application of advanced processing technology such as big data,Actively carry out LEI application promotion, related standards, and new technology research,Establish and improve our LEI system as soon as possible.August 2014,China’s LEI local system runs on the Internet and has passed the ultimate consideration of international mutual recognition.Through the construction of two years, the construction of two years later,The system was approved by Gleif in December 2017.It is marked with the initial construction of China’s LEI system and officially integrated into Gleis.The LEI code issued by my country can be approved by other national regulators.Meet the needs of my country’s participation in international financial trading agencies to get LEI coding,Guarantee that domestic institutions will be successfully carried out in international financial transactions.As of April 30, 2021,A total of 4,2924 LEI coding coding agencies in China.The number of draws is ranked 12th in the world.

  In 2019,In order to explore the application of LEI encoding in my country’s digital economic development,Follow the global LEI system 2.0 upgrade,The People’s Bank of China carries out the digital identification of cross-border legal people.China’s LEI local system completed system docking with large commercial banks, financial infrastructure, self-trade areas, financial data platforms, cross-border trade platforms,The basic functions of LEI coding registration, annual inspection, change, and query are implemented.Through the docking of the pilot unit,Effectively expand the code channels of LEI encoding.As of April 30, 2021,13 pilot units have completed docking with China’s LEI local system.

  China’s LEI system Next construction ideas

  Building a new generation of China LEI local system.Currently,The world has 39 LOU systems, including my country.With the continuous development of the LEI system,Roc, Gleif has released new business specifications and technical standards,New data specification requirements for each Lou system,Push the corresponding system to retrore upgrade and other work.In the past six yearsThe existing system is stable,Solidly completed the daily maintenance management of LEI coding information,A new generation system will continue to maintain and focus on domestic daily business maintenance management.Focus on building an authority, specification, comprehensive, accurate LEI code international basis information database.The database looks at the international application scenario of “walking out”,Provide data support for its own overseas business scenarios for partnerships,Provide the necessary information retrieval for the LEI coder holder.Provide starting at home and abroad, LEI standard rules,To stand out in many LOU systems around the world,Enhance the recognition and discipline right of our country in Gleis.

  Create a cross-border legal information service platform.The core of the cross-border legal information service platform is to include the data chain, including LEI encoding.Combined with the relevant information of the overseas legal person,Digital and processing through data depth,Form a large data level “data lake”,Provide information services for financial infrastructure, financial institutions, etc.Help institutions understand their corporate customers,Implementation of legal personnel due diligence.Connect the continuous tracking management of legal personnel information during business relationships,In order to fulfill the obligation of anti-washing money, the anti-terrorism financing volunteer organization provides the necessary technical means.The auxiliary regulatory authorities conduct risk identification and risk monitoring,Implement penetrating supervision.

  Cross-border legal information service platform integrates other business data,To establish an authority, standard, comprehensive, accurate global LEI code “localization” information database,Maximize data resource utility,Improve the value of LEI coding information,Make relevant decision analysis more scientific, accurate,Finally, it is implemented as government, regulatory agencies, financial institutions, and non-financial enterprises to provide data support in accordance with domestic business applications.

  In addition,Into the needs of “introduced” domestic application scenarios,Cross-border legal information service platform covers inside and outside the new generation of China’s LEI local system, complement each other, forming a cycle,Refer to international cases,On the basis of relevant legal data acquisitions,Realize pre-evaluation code,Easy to regulate the supervision department, financial institutions can effectively utilize encoding when setting the application scenario.Under the voluntary authorization of the legal person,The pre-assignment code can be transformed into formal encoding.Implement data fusion and deep data cleaning,Promote legal persons at home and abroad and its information to carry out application expansion in the corresponding field.

  my country’s LEI system suggestion initiative

  Enhance the landscape tissue linkage.my country’s LEI coding application is far-reaching,Only in the financial industry,Take the financial industry such as monetary authorities, regulatory authorities, banking deposits, banking, non-deposits, securities industry and insurance industry.In addition,Most of the competent organizations or companies are vertical organizations.LEI encoding is to facilitate the promotion to the application, and it is necessary to face “joint promotion, depth advancement”.It is prone to “out ofhibition” slightly lacking.This requires the relevant parties to strengthen coordination linkage.Through the media, network, conference and other platforms,Multi-level, multi – angle promotion of LEI coding and significance,Improve participants’ understanding of LEI coding.

  Promote the application rules.Currently,There are three ways to apply LEI encoding (mandatory use,That is, the legal person must hold and use LEI code; if there is newspaper,That is, a legal person who has already held LEI encoding must use LEI coding; selective use),There are approximately 70 regulatory rules in Europe, and there are about 30 regulatory rules in the United States.Europe and America has become the main area of LEI encoding.As of April 30, 2021,my country’s financial sector involves 9 LEI public issuance rules, 8 internal issuance (Internet is not released), and 6 rules are being developed.

  Mining data application value.LEI encoding plays a “passport” for holders at home and abroad.Although the reference data design is only two layers (the first layer is the basic information of the legal person,Including the official name of the legal person, the address, the legal office address, the legal office address, etc. The second layer is related data,Designed to depict the control relationship between the legal people),Once the land is applied in different fields, it is suitable for different rules.It will transcend the passport itself “identification” and “access conditions” two basic properties,Data application value shows broad prospects.But we also believe thatCurrently in the code, the code range, and the data depth,Also don’t have a mature coding system at home and abroad.future,Over time, Lei coding is full of thousands, wide application,After the system is mature,We must pay more attention to data applications,Mining data application value.to this end,Must be fully prepared,Do a good job in rules,Data fusion is made in technology.■


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