Let's make sense of some word salad. Salad is good and healthy for you. Professional fields use coded language both expedite internal communication and obscure outsiders. We all like to feel special! But it's not in harm. Here let's look behind the words which you will making up the LEI system while also explaining how these bodies relate to each other and provide some historical context.
The first body to exist was the LEI ROC. The ROC stands for Regulatory Oversight Committee. This was a direct outcrop of the 2007-2009 global real estate crisis. The G-20 group desired greater clarity surrounding entity identification. The LEI ROC was the initial operating mechanism for LEIs. Today, operation of the LEI system by the ROC has ceased. The GLEIF is the direct antecedent and maintains the LEI records as well as doing daily outreach to further the case for these little 20-digit beauties. The ROC continues to operate as a board would function.
There are also the LOUs. This stands for Local Operating Units. There are over 30 currently. They are generally organizations with strong backgrounds in software, security, and financial instruments. Any firm can become a LOU, but will have to face a technical audit by the GLEIF. Only the best should test their mettle in this arena. LOUs are like nodes. There has been an analogy drawn. In a decentralized system, LOUs would act as PoS validators. The GLEIF operates a standard, centralized database. It is very much an old-world model, but gives a ripe body for building on top if there ever is a massive change such as blockchain beckons. LOUs issue the LEI code for your organization. The initial four digits of the LEI correspond to the LOU. They follow the ISO standard for creating LEIs; the interoperable standard in company identification.
In 2017, the final layer of governance was added. The RA. Registration Agent. That's what we are. We are an Official Registration Agent. Registration Agents create strategic alliances with one or more LOUs. RAs hopefully can expand LEI adoption by making it easier for companies and applying a local face to what can be an obscure, alienating process. It can be a sleeker way to get and manage a LEI. However, RAs do not issue the LEI themselves, and will basically act as a between the LOU and you. Make sure you choose an RA which can provide some material benefit such as fast applications or automated issuance and renewals.
We hope this article shed some dressing the word salad. You are probably from a world that has its own unique ways of speaking. Use this as a guide to feel more comfortable speaking about a LEI. Knowing the origin of a thing can prove essential in knowing where it is going. And we hope the LEI concept continues to grow legs. Adoption can only be driven outside enforcement when creating actual value.