152. ESMA provided in the Consultation Paper a complete and comprehensive background on the use of the ISO 17442 LEI standard to identify the parties of a transaction. ESMA notes that EMIR has been the first Regulation to require the use of LEIs and since the entry into force of the reporting obligation the LEI has officially become the unique identifier for counterparties that conclude derivatives contracts and that are legal entities.

153. ESMA also clarified in the Consultation Paper that since the introduction of the ITS on reporting no indications were made in the regulation about the validity of LEI codes which instead has been further clarified in the Q&A. For this reason, ESMA proposed in the Consultation Paper to include in the new reporting standard, the rule according to which the LEI code of the reporting counterparty should be duly renewed and maintained according to the terms of any of the endorsed LOUs (Local Operating Units) of the Global Legal Entity Identifier System.

154. Almost all respondents welcomed the ESMA proposal as the inclusion of such a provision in the technical standards will likely reduce reporting issues due to lapsed LEI.

155. Furthermore, considering the feedback received in the consultation, ESMA proposes that the renewal of the LEI will be validated only for the reporting counterparty and the entity responsible for reporting, while for entities other than the counterparty 1 and the entity responsible for reporting a lapsed LEI should be allowed.