The new world of securities product identifiers

Release Date: 10 June, 2019 | News Article

APIR Systems, the Australian provider of identification codes for investment products, is experiencing a big increase in demand for its ‘legal entity identifiers’ (LEIs), prompted by a new September 30 deadline set by ASIC.

The world of securities identifiers is a complex and increasingly global one. To be fair to the Australian regulator, the LEI regulations were introduced about two-and-half years ago however the deadline for introduction postponed from last year while the industry came to grips with the extra paper work. The LEI Is a critical component of the Europe’s MiFIDii regulatory regime.

According to Chris Donohoe, the chief executive of APIR Systems, the new identifiers are about global regulatory harmonisation, which is a good thing. “We see the LEIs as the entity identifiers of the future,” he says.

As of July 1, last year, the company had about 500 in its system. It set a target of 800 by July this year but the number has already mushroomed to 1,600. The largest proportion of the new users is SMSFs, which can be caught as a “legal entity”.

There are other opportunities for APIR Systems, which changed its private ownership structure last year, which are also due to the globalisation of investment vehicles. In Australia, the Financial Services Council has been lobbying for years for changes that would help both the exporting and importing of investment capabilities.

A relatively new proposal is the adoption of ‘CCIVs’ (Corporate Collective Investment Vehicle) which is similar to the popular UCITs system but has a more attractive legal structure for Australian managers, particularly for exporting, according to Donohoe. “But it’s also an opportunity for Australian consumers, too.”

APIR dates back to 1993 and its main operations are still based in Canberra, where it has been identifying, coding and managing reference data for unlisted investment vehicles since that time. Its identifier protocols were endorsed by the FSC (then IFSA) in the early 2000’s. Donohoe is based in Sydney.

“When we register a product, we take a lot of data and we aggregate and distribute that data to a growing number of clients,” he says. “We are looking to enhance that information,” he says. The original APIR code business continues to grow, with the company having more than 15,000 active funds registered in its system and perhaps another 15,000 which have been terminated. APIR Systems is the only wholly owned issuer of LEIs in Australia that charges In Australian dollars and service its clients in Australian standard business hours.