ABC Bank gets transaction transparency boosting certification from London bourse

The London Stock Exchange has awarded local financier African Banking Corporation (ABC Bank) a Legal Entity Identifier (LEI) certification that will help it better identify parties dealing with the lender.

The identification code allows banks to instantly determine all parties in transactions, which enhances transparency in the financial system.
The certification, which the bank said was amongst the first in East Africa, comes ahead of the global enforcement of the European market infrastructure regulation expected to kick off on January 1, 2018.

“This will avail us new international business opportunities since prospective partners will easily and speedily identify us and transact,” said ABC Bank general manager for treasury and financial institutions Philip Wambua in a statement issued on Monday.

“We believe this certification places us at great advantage vis-à-vis other banks for customers as we can reach a large pool of counterparties and offer finer pricing for customers.”

The LEI identification code allows consistent and accurate identification of legal entities that are parties to financial transactions, including non-financial institutions.

The European regulation was introduced in May 2014 at the request of the G20 countries after the global financial crisis of 2007-2008.

It links back to a data set of critical information about the transacting entity, which can also include information on the ultimate ownership of the entity.

Global Legal Entity Identifier Foundation (GLEIF) said globalisation of the financial markets has made businesses across the world to grapple with the challenge of developing and implementing a common entity identification system.

Once certified, a firm is included in a global data system that connects to key reference information that enables clear and unique identification of legal entities participating in financial transactions in any jurisdiction.

The globe has been grappling with complex transactions that allow dubious parties to turnover billions of dollars. Several regulations have been crafted by the US and EU to prevent dubious transactions.