SEC’s final disclosure rule drops proposed requirement for legal entity identifier reports

3 April 2019 9:01am
A US Securities and Exchange Commission final rule to modernize and simplify corporate filings drops a proposed requirement that public companies, investment advisers and investment companies disclose legal entity identifiers used to pinpoint firms’ global credit risks.

“It would be costly and time-consuming to acquire and maintain LEIs, particularly for registrants with numerous subsidiaries or affiliates operating globally, while at the same time LEIs may not provide additional material information to investors,” the SEC said in the rule published in today's Federal Register.

The 3-1 vote on the rule last month, backed by Chairman Jay Clayton and the two other Republican commissioners, runs counter to other US financial regulators’ push for wider adoption of the 20-digit codes. The SEC’s reasons for scrapping the tag disclosure echoed arguments made by industry.