The Office of Financial Research, set up legislatively by Dodd-Frank, has been working methodically toward a new global system of identification for legal entities. The idea is to create a global system of identification that would create a lot more transparency when it comes to issues involving counterparties to various transactions. Only then can regulators around the world get a solid grip on systemic risk issues.

There are myriad benefits to banks and other financial firms as well regarding risk management and simply knowing who is on the other side of trades.

The current system is regularly derided by regulators and industry participants as ad hoc and ineffective, shortcomings that were exposed by the financial crisis. The OFR would like the new system to be in place by July.

We're seeing a huge international movement coalesce around the idea right now. A milestone was hit recently when SWIFT was named as the registration authority for the effort, beating out the Association of National Numbering Agencies. Other participants in the effort include the International Standards Organization (ISO) and trade associations from around the globe.

In the United States, SIFMA remains quite involved. On behalf of other trade associations, it recently posted a detailed set of proposed requirements for an identifier system.

Lots of issues still have to be worked out, including the exact data and metadata requirements for the system, the revenue model and the company that will ultimately manage all of this.

For more:
- here are the requirements

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