In previous posts, I’ve written about the importance of the Global Legal Entity Identifier Foundation’s LEI system as a valuable means for entity matching, and as a necessity for identifying organizations for regulatory purposes. Many regulations worldwide are now accepting or mandating LEI for validating key reference information.
This week, I thought I’d talk about the importance of ISIN-to-LEI mapping, a collaborative initiative that was piloted first in 2019 between GLEIF and ANNA, the registration authority for ISIN.
Pre-populating reference data systems by mapping these two identification systems together provides a strong foundation that creates a trustworthy universe of instruments and issuers that can then be further enriched with the addition of data from other sources.
This approach is more reliable than trying to piece together information from various data providers and then reconciling it with ISIN and LEI data afterwards. Here are just a few reasons why starting with ISIN-to-LEI mapping can be so beneficial:
Enhanced Data Quality and Consistency helping ensure that securities are accurately linked to their issuing legal entities, and allowing for consistent, reliable identification across systems and markets while minimizing errors and discrepancies.
Supporting Regulatory Compliance with frameworks such as MiFID II, EMIR, SFTR, and others, all of which require or reference both ISIN and LEI codes in reporting and transparency obligations.
Improved Transparency and Risk Management enabling firms and regulators to clearly identify the issuer of a security, facilitating better aggregation and analysis of exposures, risk concentrations, and counterparty relationships.
Operational Efficiency with the assurance that mappings are up to date, thereby reducing the burdensome need to do manual reconciliations.
ISINs together with LEIs are also heavily used in mitigating market abuse and enhancing security by helping detect unusual patterns, potential fraud, and market abuse and providing a secure, validated connection between instruments and entities.
I believe the ISIN-to-LEI mapping really can be a cornerstone of effective Security and Entity Masters. It provides a standardized, reliable building block that helps ensure the secure and robust oversight essential for confident data management.