In September 2018, a joint report was issued by the Global Legal Entity Identifier Foundation (GLEIF) and the Data Foundation. Among other things, the report considered how Legal Entity Identifier (LEI) adoption across US federal agencies “could streamline entity identification and produce benefits within and beyond financial markets.”
One of the key issues mentioned in the report was the fact that there are 50 separate entity identifications being used by federal governments across the US, which aren’t compatible with each other. Such a finding is a clear suggestion that more could be done to improve identification systems in the US.
The report argues that introducing an entity identification system based on the LEI could have a range of benefits, including reducing risk in markets and providing clearer information to stakeholders such as regulators, researchers, and even grant officers.
While LEIs are a mainstay feature of financial markets, as they used by regulators in a number of countries as a way of identifying entities that partake in financial transactions, the issues highlighted by the joint GLEIF/Data Foundation report appear to mirror other calls for greater data standardization and transparency across the US.
For example, the OPEN Government Data Act would require federal agencies to release their data online in a standardized, machine-readable format.
While any steps to improve the quality of data transparency and comparability would be welcome, such proposals aren’t solely reserved for government or federal agencies.
In fact, when it comes to the area of regulatory compliance, the SEC recently announced that it will begin to check for any issues in XBRL tagging and will notify filers when XBRL tagging issues are spotted. This announcement coincided with the release of the latest draft EDGAR Filer Manual.
Although there are only a few new XBRL errors that the SEC will check, including whether the SEC filing uses deprecated tags in the submission, it’s certainly a step in the right direction, as the more XBRL filing errors that are caught, the better the overall data quality should be when it comes to both XBRL filing and SEC reporting.
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