TABB Alacra LEI Quality Q3

8/10/2019 TABB Alacra LEI Quality Q3

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TABB Group

115 Broadway 12thFloor New York, NY 10006 T: 646 722-7800 F: 508 519-0519 www.tabbgroup.com

The TABB Group, Europe LTD 60 Cannon Street, Suite 413 London EC4N 6NP T: +44 (0) 203 207 9027

Alacra

100 Broadway Suite 1101 New York, NY 10005 T: 212 363-9620 F: 212 363-9630 www.alacra.com

125 Old Broad Street, 6th Floor London EC2N 1AR T: +44 (0) 20 3059 5765 F: +44 (0) 20 3192 5577

TABB Group / Alacra Issue Q3 LEI Ranking on LEI Quality Statistics

LEI Process Continues to Come Up Short

TABB and Alacra Provide New In-Depth Metrics Tracking Ongoing LEI Relevance to the

Financial Services Industry

TABB Group maintains a ranking of the 14 LEI (Legal Entity Identifier) registration authorities

(Local Operating UnitsLOUs) around the globe based on data consistency and uniformity.

While DTCC/SWIFT led the other 13 LEI providers in LEI completeness, with a score of 98%, TABB

Group, along with Alacra (the leading provider of legal, counterparty and reference data

solutions), believes the LEI process continues to face challenges. Only 15% of entities with a

credit rating, 14.5% of entities that are listed on global exchanges, 17% of organizations with a

SWIFT BIC code (global banks), and 51.4% of European Banking Association entities (EBAs

European Banks) have an LEI. While many are properly set up, a large percentage of LEIs havebeen issued to organizations that do not engage in financial markets transactions, let alone the

complex derivatives transactions that LEIs were developed to track.

The TABB Group LEI Rankings compare LEI providers on the consistency and uniformity of their

LEI data as aggregated by P-LEI.org. Three metrics are used: validity of primary record

information, completeness of address and regional information, and the quality of supporting

metadata information.

Alacra provides a more in-depth analysis of LEIs, comparing issued LEIs against the body of

global rated, regulated and listed counterparties and entities that should have an LEI.
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TABB Group / Alacra

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Exhibits 1 & 2

TABB Group LEI Measures

Source: TABB Group, P-LEI Data downloaded on Oct. 22, 2014

NameTotal

Comprehensiveness Rank

DTCC/SWIFT 98% 1

Takasbank (Turkey) 93% 2

Institut National de la Statistique et des Etudes Economiques (France) 91% 3

Centrln depozit cennch papr, a.s. (Czech) 89% 4

Dutch Chamber of Commerce 87% 5

Registro Mercantil del Reino de Espaa 87% 6

Unione Italiana per le Camere di Commercio, Industria, Artigianato e Agricoltura 87% 7

London Stock Exchange 83% 8

WM Datenservice 81% 9

Bundesanzeiger Verlag GmbH 81% 10

National Settlement Depository (Russia) 73% 11Krajowy Depozyt Papierw Wartociowych S.A. (Poland) 73% 12

National Board for Patents and Registration (PRH) (Finland) 71% 13

Irish Stock Exchange 69% 14

Name

Address / Region


USA Specific

Validity Rank

Field-level


DTCC/SWIFT 93% 1 100% 2 99.3% 5

Takasbank (Turkey) 67% 10 N/A 100.0% 1

Institut National de la Statistique et des Etudes Economiques (France) 65% 11 100% 3 99.8% 3

Centrln depozit cennch papr, a.s. (Czech) 55% 13 100% 4 100.0% 1

Dutch Chamber of Commerce 75% 3 100% 1 85.7% 6

Registro Mercantil del Reino de Espaa 74% 6 100% 5 85.7% 7

Unione Italiana per le Camere di Commercio, Industria, Artigianato e Agricoltura 33% 14 N/A 99.7% 4

London Stock Exchange 80% 2 98% 9 71.4% 8

WM Datenservice 75% 5 99% 7 71.3% 10

Bundesanzeiger Verlag GmbH 73% 7 100% 6 71.4% 9National Settlement Depository (Russia) 67% 9 N/A 57.1% 11

Krajowy Depozyt Papierw Wartociowych S.A. (Poland) 67% 8 N/A 57.1% 14

National Board for Patents and Registration (PRH) (Finland) 56% 12 N/A 57.1% 11

Irish Stock Exchange 75% 4 99% 8 57.1% 11

TABB Group LEI Measurement Process

TABB Group tests regional information against standard country and region codes to determine

the percentage of accurate records. LEI entries are then analyzed to determine the

completeness of field-level data entered for information such as Legal Address, Registered City,

Entity Status Code, Entity Legal Form, LEI Status Code, LEI Assignment Date, LEI CertificationStatus, LEI Record Last Update Date, and LOU Mapping Profile. The higher the percentage, the

more populated fields each LEI record contains. While we are unable to validate the accuracy of

every field, our measure tracks that these important fields are being supplied.

The tables below highlight both the nominal score and ranking of the 14 LEI providers by the

three metrics.


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TABB Group / Alacra

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Exhibit 3

LEI Universe & Universe of Listed, Rated, Regulated

Entities

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

March April May November

Listed, Rated, Regulated Universe Total LEI Universe Overlap

LEI CGR: +6.02%

Listed,

Rated &

Regulated

CGR:

+0.01%

Overlap

CGR:

+4.5%

CGR = Compound Growth Rate

Source: Alacra, TABB Group

Exhibit 4

Percentage of LEI Universe Overlapping with Universe of

Listed, Rated, Regulated Entities

7.40

7.60

7.80

8.00

8.20

8.40

8.60

8.80

9.00

9.20


TABB/Alacra Effectiveness Index

Source: Alacra, TABB Group

Going Beyond Consistency

Having a consistent and uniform database is only part of the picture in implementing an

effective LEI system. Ensuring the appropriate entities are covered is as, if not more, important.

Although the LEI universe is growing, the universe of relevant and covered institutions isnt. To

better gauge this, TABB has partnered with Alacra to track important LEI adoption statistics.Alacras process forassessing and tracking ongoing LEI relevance to the financial services

industry, enables us to have greater insight into whether the LEIs that are being created are

relevant to institutions, regulators,

and the health of the industry.

While LEI records have increased,

the universe of listed, rated, and

regulated entities has remained

constant (see Exhibit 3). The

overlap between these twouniverses tracks the number of

listed, rated, and regulated entities

that have been assigned an LEI.

This overlap is the key to assessing

the effectiveness of the LEI system.

Having entities that are likely to

execute financial risk-incurring

transactions registered with LEIs is

the reason why the LEI system was

created in the first place.

Exhibit 4 (right) introduces the

TABB/Alacra Effectiveness Index,

which portrays the overlap as a

proportion of the LEI Universe. The

index has decreased from 8.9 in

March to 8.0 in November. This

means that the number of non-

relevant LEIs is growing faster than

the number of useful LEIs. When

the LEI database is being filled with

financially non-relevant entities

faster than financially significant

entities, the overall quality and

usefulness of the LEI regime is

degraded.


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TABB Group / Alacra

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Exhibit 7

BICs with and without LEI

Source: Alacra

3.0%17.0%

97.0%83.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

May November

% of BICs with a LEI % of BICs without a LEI

Exhibit 5

Rated Entities with and without LEI

Source: Alacra

13.4% 15.0%

86.6% 85%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

May November

% of Rated Entities with a LEI % of Rated Entities without a LEI

Exhibit 6

Listed Entities with and without LEI

Source: Alacra

9.0% 9.7% 10.7%14.5%

91.0% 90.3% 89.3%85.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%


% of Listed Entities with a LEI % of Listed Entities without a LEI

Segmenting the LEI entities with a

credit rating, or those likely to

raise debt or borrow money from

financial institutions, we can

observe a slight uptick from May

to November in LEIs. But the

quarterly increase was only 1.6%.

The vast majority, 85%, of rated

entitles still have yet to register or

be registered (see Exhibit 5).

The LEI entities listed on a national

stock exchange grew at a faster

rate in terms of LEI registration

from May to November; but

overall, the same conclusion can

be drawn about the vast majorityof yet-to-be-registered entities, as

only 14.5% of listed entities have

an LEI (see Exhibit 6).

While rated and listed entities or

entities that are likely to be a bank

counterparty are very low in LEI

registration rates, it would be

expected that regulated banks

would have a much higher

registration level. While BICs have

a higher registration than

corporate entities, and have

shown significant growth over the

past quarter (almost a 600%

increase), BICsLEI growth rate is

still only 17%, which is very poor

given the G20 mandate for greater

transparency and the CFTCs LEI

requirements (see Exhibit 7).


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TABB Group / Alacra

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Exhibit 9

Registered Entity Types in GMEI

Source: Alacra

64.5% 65.7% 67.8%

35.5% 34.3% 32.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

May November

Categorized Entity Types Entity Types that are "Other"

Exhibit 8

EBAs with and without LEI

Source: Alacra

38.6%51.4%

61.4%48.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

May November

% of EBAs with a LEI % of EBAs without a LEI

The European Banks are by far the

most engaged in the LEI process.

The European Banking Association

entities (EBAs) are the most

comprehensively covered universe

in terms of LEI registration (see

Exhibit 8).

Taking a closer look at GMEI, the

most populous LEI database, about

32.2% of entities indicate a legal

form of Other despite the fact

that there are more than 200 legal

forms to choose from. Lastly,

around 39,000 of the 160,000 LEIs

in this database have lapsed andare out of date.

Note: Neither TABB Group nor Alacra have been engaged by any local, national, or global entity to create this analysis, and this

analysis is not financially sponsored by any entity outside of either TABB Group or Alacra. TABB Group is a financial markets research

and advisory firm with locations in New York, London, and Westborough, MA. Alacra develops workflow applications that enable

300,000 end users at over 200 financial institutions, professional service firms and corporations to find, organize, analyze and

present mission-critical business information. It has offices in New York and London.

TABB Alacra LEI Quality Q3

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