Investment IDentifiability Project

About Investment IDentifiability

All investment decisions start with the ‘who’. This means that investors should be able to quickly and easily identify the legal entity/entities in which they are investing. A transparent, current, and accurate view of the names, locations, and legal forms of subsidiaries, parents, and holdings of a company is imperative to understand the nature and systemic risks of an investment fully. However, it is impossible to understand a company’s overall activities without a clear and standardized entity identification system underpinning financial markets globally.

The Global Legal Entity Identifier Foundation (GLEIF) has collaborated with Sociovestix Labs to develop an assessment and scoring project enabling responsible asset owners and managers to demonstrate their own commitment to transparency while enabling an ecosystem that enables responsible investments and informed decision-making.

The project aims to massively advance the identifiability of legal entities across global marketplaces so as to enable ‘investing wisely’. This means focusing not just on returns, but more broadly on environmental, social and governance (ESG) considerations.

With the Global Investment IDentifiability Indicator (GIII), GLEIF and Sociovestix Labs are providing investors an easy-to-use measure of corporate transparency and identifiability. This indicator empowers investors to leverage the Global LEI System to their advantage by requiring invested companies to demonstrate a commitment to transparency and provide easy access to investment information via the LEI.

More than 200 regulations across 23 jurisdictions around the world mandate the LEI’s use for identifying parties to financial transactions. Additionally, more than two million LEIs are now in active use globally, accessible to any interested party — from regulator to curious consumer — resulting in never-before-seen levels of transparency into legal entities’ identities and ownership structures.

Investment Identifiability and the Legal Entity Identifier

For asset owners and managers, the ability to verify the identity of invested companies and their corporate organizational structure underpins responsible investments and informed decision-making.

The Legal Entity Identifier (LEI) is the only global solution providing organizations with reliable data to identify companies and corporate structures worldwide unambiguously. As a universal ISO identification standard and a code that connects entities to key reference information, including ownership structure, the Legal Entity Identifier (LEI) tackles data reconciliation problems across borders and promotes an interoperable identity standard.

Via the LEI reference data, an investor can confirm when reference data was last corroborated by an authoritative source and the details of that authoritative source. The Global LEI Index empowers organizations, regardless of sector, to cut costs, simplify and accelerate operations and gain deeper insight into the global marketplace. Corporate customers, providers and other business partners can all be uniquely, easily and speedily identified with the LEI, providing organizations with cost benefits and new business opportunities. An investor can also access links to other identification systems such as the local registration number, Business Identifier Code (BIC), International Securities Identification Number (ISIN), and S&P Global ID. The relationships between fund entities are also readily accessible. These links facilitate investor analysis, enabling better decision-making.

Global Investment IDentifiability Indicator (GIII) - How does it work?

We evaluate the entities listed in one of the three indices: S&P500, MSCI World, or Bloomberg Barclays Global Aggregate. The assessment follows different levels of maturity of the data: