NSCC Rolls Out LEI Requirement for Traders and Members
Published Date: 5/8/2025
Notice
Summary
The National Securities Clearing Corporation (NSCC) is updating its rules to make sure all members and their sponsored participants have a Legal Entity Identifier (LEI) on file. This means anyone applying to join, current members, and certain Canadian participants must provide and keep their LEIs up to date. These changes take effect immediately and help keep the financial system clear and organized without extra costs.
Analyzed Economic Effects
8 provisions identified: 1 benefits, 6 costs, 1 mixed.
Applicants Must Provide a 20‑Character LEI
If you apply to become a Member or Limited Member of NSCC, you must obtain and provide a 20-character Legal Entity Identifier (LEI) to NSCC as part of your membership application. This requirement was filed April 25, 2025 and is effective immediately.
Members Must Keep Current LEIs On File
Each NSCC Member and Limited Member must always have a current LEI on file with NSCC, and NSCC will notify any participants who lack an LEI. Those notified will have 60 calendar days from the Important Notice to submit the required LEIs.
Sponsoring Members Must Supply Sponsored Members' LEIs
Sponsoring Members must provide NSCC with an LEI for each existing Sponsored Member and for each newly added Sponsored Member. Sponsoring Members given notice will have 60 calendar days to submit the LEIs; the 60-day period then sunsets.
CDS Must Provide LEIs for CDS Participants
CDS Clearing and Depository Services Inc. (CDS) must provide NSCC with an LEI for each current CDS Participant for which CDS maintains a subaccount and for each newly added CDS Participant going forward. The filing states that 100% of CDS Participants currently have an LEI.
Average LEI Registration and Maintenance Costs
The filing states the average cost to register a new LEI is approximately $71 and the average annual maintenance cost is approximately $62, with typical processing in 24–48 business hours. NSCC describes these expenses as minimal.
NSCC Says LEIs Improve Data and Risk Controls
NSCC states that requiring LEIs will simplify KYC and onboarding, enhance counterparty risk management, reduce record duplication, and let NSCC leverage DTCC technology to validate participants and manage data across subsidiaries.
Noncompliance Can Lead to Fines
The filing states failure to adhere to the LEI requirement could result in discipline, including fines, under NSCC Rule 48. The rule change was filed April 25, 2025 and is effective immediately, subject to possible Commission suspension within 60 days.
Existing LEI Coverage Rates Reported
NSCC reports that about 88% of Members, 48% of Limited Members, and 100% of CDS Participants currently have an LEI on file. Entities that do not have one will be required to obtain and submit an LEI.
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