WASHINGTON — The Federal Reserve Board issued a proposal Monday that would require certain financial institutions that have been assigned Legal Entity Identifiers to include that information in their regular reports, a first but tentative step toward broader reliance on the universal counterparty ID.

Under the plan, banks and various foreign and nonbanking entities would be required to include their LEIs — if they already have them — in some annual or ad hoc reports to the Fed.

The reports — known as the FR Y-7 and FR Y-6 — are sent to the Fed annually and require holding companies and foreign banking organizations to detail certain financial data, organizational information, domestic branch data and other information. Another report, the FR Y-10, is submitted on an ad hoc basis by a broader base of entities, including state member banks and nationally chartered banks, and requires similar information in the event that there is a material change.

The Fed proposed to include LEIs as part of those regular filings in order to build up a database of LEI information that corresponds with the central bank's existing filing system for financial institutions. Banks would not be required to obtain an LEI for the purpose of the filing, however.

"It is expected that the use of the LEI among the regulators will expand to facilitate better information sharing and coordination regarding domestic financial policy, rulemaking, examinations, reporting requirements, and enforcement actions," the proposal said. "A single global system would help support the shared objective of a more stable financial system."

One of problems uncovered by the financial crisis was that there was no reliable way of knowing how exposed a bank was to various systemic risks because the web of affiliates and counterparty exposures was so opaque. Regulators keep proprietary filing systems for the entities they regulate, such that each regulator will have a different alphanumeric identifier for the same company. International regulators likewise had no common system to identify firms and their affiliates.

The LEI is meant to solve this dilemma with a single, internationally consistent 20-character alphanumeric code that corresponds to a single legal entity, thus helping to untangle the relationships between institutions. LEIs are managed and assigned by the LEI Regulatory Oversight Committee, which was created in January 2013 on the recommendation of the Financial Stability Board.

Treasury Secretary Jack Lew, who chairs the Financial Stability Oversight Council, last October pointed to the LEI as one of the more important aspects of financial regulation left to tackle, saying the benefit of adopting the LEI systemwide is "nothing short [of] having visibility into the risks we face in the future."

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