1.
RBI/FEMA has introduced the
concept of Legal Entity Identifier (LEI) code as a key measure to improve the
quality and accuracy of financial data systems for better risk management post
the Global Financial Crisis. LEI is a 20-digit unique code to identify parties
to financial transactions worldwide.
2.
The LEI for the
participants of the OTC derivatives market has since
been implemented vide circular RBI/2016-17/314 FMRD.FMID No.14/11.01.007/2-16-17
dated June 01, 2017 in a phased manner.
3. In the Statement
on Developmental and Regulatory Policies dated October 4, 2017 it was indicated that LEI system for all borrowers of
banks having total fund based and non-fund based exposure of ₹ 5 crore and
above will be introduced in a phased manner (extract enclosed). Accordingly, it
has been decided that the banks shall advise their existing large corporate
borrowers having total exposures of ₹ 50 crore and above to obtain LEI as per
the timelines provided. Borrowers who do not obtain LEI as per the scheduled
timeline are not to be granted renewal / enhancement of credit facilities. A
separate roadmap for borrowers having exposure between ₹ 5 crore and upto ₹ 50
crore would be issued in due course.
4. Banks should encourage
large borrowers to obtain LEI for their parent entity as well as all
subsidiaries and associates.
5. Entities can obtain
LEI from any of the Local Operating Units (LOUs) accredited by the Global Legal
Entity Identifier Foundation (GLEIF) – the entity tasked to support the
implementation and use of LEI. In India, LEI code may be obtained from Legal
Entity Identifier India Ltd (LEIIL), a subsidiary of the Clearing Corporation
of India Limited (CCIL), which has been recognised by the Reserve Bank as
issuer of LEI under the Payment and Settlement Systems Act, 2007 and is
accredited by the GLEIF as the Local Operating Unit (LOU) in India for issuance
and management of LEI.
6. Based
on the feedback and requests received from market participants, and with a view
to enable smoother implementation of the LEI system in non-derivative markets:
a.
The timelines for implementation (Phase I and Phase II) for OTC
derivatives are extended as under:
·
Phase 1: Net Worth of Entities above
Rs.10000 million – December 31, 2019.
·
Phase 2: Net Worth of Entities between
Rs.2000 million - Rs 10000 million December 31, 2019.
·
Phase 3: Net Worth of Entities up to
Rs.2000 million– March 31, 2020.
b.
The schedule of large Corporate borrowers
from Scheduled Commercial banks (SCB’s) to obtain LEI is as follows:
·
Phase 1: Total exposure to SCBs of 1000
Cr and above – March 31, 2018.
·
Phase 2: Total exposure to SCBs of 500 Cr
and 1000 Cr– June 30, 2018.
·
Phase 3: Total exposure to SCBs of 100 Cr
and 500 Cr – March 31, 2019.
·
Phase 4: Total exposure to SCBs of 100 Cr
and 50 Cr – Dec 31, 2019.
Anjali
Suri
Company
Secretary
Global
Jurix LLP
Advocates
& Solicitors
International
Legal Consultants
M/+91
8130300046
T/
+91 11 22481711
E/corporate@globaljurix.com
W/
www.globaljurix.com
No comments:
Post a Comment