On the afternoon of November 8, 2012, Professor Li Renzhen of Wuhan University brought a salon lecture with the theme of “'Lei' in the Financial Market- Global Legal Entity Identifier System” to the teachers and students of the International Law Institute.
Professor Li humorously started the forum with expression of "Radium" element discovered by Mrs. Curie and introduced her new "Global Legal Entity Identification System" to teachers and students. Different from the "Ra" discovered by Mrs. Curie, the "Radium" explored by Professor Li means the Legal Entity Identifier (LEI), which in Chinese shares the same pronunciation as LEI.
Professor Li first described the concept of the system and its background. The Global Legal Entity Identifier is a globally identifiable identifier established by the international regulatory community to effectively identify legal entities in financial markets. The Global LEI system is an organic system established by the international regulatory community under the auspices of the G20 Summit to promote the establishment and implementation of this standard on a global scale. On November 5th, the G20 finance ministers and central bank governors meeting approved the ROC (regulatory oversight committee) charter, and the global LEI system was formally established. Professor Li thought the characteristics of the global LEI system are uniqueness, universality, public welfare and convenience.
Secondly, Professor Li has successively described the governance framework of the LEI system from the aspects of the scope, organization, registration, continuous capital injection, and competition and anti-monopoly arrangements of the global LEI system, and at the same time, he also evaluated the value of the global LEI system from the two aspects of public welfare value and private benefit value. The global LEI system is designed as a public welfare platform. From the perspective of its public welfare value, the system can promote the aggregation and analysis of financial data, strengthen prudential supervision and cross-border supervision, support the effective disposal of financial institutions and curb the market abuse and financial fraud. From the perspective of its private value, the system can improve social and economic benefits, avoid financial institutions to spend huge amounts of money to clear data or establish new systems; at the same time promote internal financial group risk management, improve the accuracy and integrity of financial data; and the quality of regulatory reports provides documentary support for financial institutions and regulatory authorities to develop“living wills”.
Finally, Professor Li analyzed the practical challenges faced by the international regulatory community from the aspects of coverage, operability and legal compulsory, and made a summary and prospect. Professor Li proposed that the establishment and implementation of the global LEI system is of great significance and far-reaching impact on effectively preventing systemic risks, maintaining the stability of the entire financial system, and reconstructing the legal order of the financial market. As a member of the FSB, China should fully recognize the strategic value of the global LEI system as a financial standard and implement it as a key task to promote the standardization of financial regulation.
After the report, Professor Zhang Qinglin first asked the professor Li Renzhen about the "uniqueness" of the system and had an extensive discussion, and Professor Yu Minyou and Professor Yi Xianhe also put forward their own opinions on the issue. Then, Mr.Xu Xiang also discussed with Professor Li from several questions such as identification, bank code, intellectual property, and platform carrier of LEI system. The report ended in a lively discussion.
