Legal Entity Atributes Definition (LEAD) Project

Impact of entity definition and identification on stability and regulation in a digitalised financial market – European perspective

The LEAD is the own research & development project.

The financial markets operating in a digitalised world face the new challenges, requiring academics to overcome the traditional understanding of scientific disciplines. Dematerialisation of financial transactions, markets operating using virtual infrastructures, legal rights and obligations effective in milliseconds, anonymization of trade and representation of parties in transactions exclusively by a digitalised acronym – all this requires the bridging of economic sciences, management of financial systems and legal sciences to understand what’s going on, who stands behind , and to properly estimate unavoidable risks associated with, various actions on the financial market.


In a similar way as the Human Genome Project (HGP), this research will focus on identifying the genome of the digitally born entity. Using competence provided by the scientists of law, economy and management, we will aim to identify those autonomous elements (attributes) of the legal entity, which are able to emulate the private–law rights of legal persons. Following the methods applied in the natural sciences, and very much derived from genetics, the newly established team of scientists will analyse the expression of the executed powers (and not the structural analysis of the legal forms) of these entities in their contractual activities (e.g. by analysing processes defined by the given regulations and executed on the digitalised financial markets); the method can be easily recognised as similar to the one of RNA-seq developed by the HGP;

The reduction of the attributes to those, which do matter for the stability of the financial markets, will also be achieved by analysing those attributes which proved not to be effective in the contracts conclusions (e.g. by analysing courts sentences), or did not serve any other regulatory or analytical purposes, which mirrors the first genetics research conducted on the pea plants in the XVII century. Using the advantages of the availability of natural sciences deliverables, we also expect to face similar challenges.

The amount of data, which needs structuring and analyses, the variations of the existing legal forms in Europe (more than 1100 are already catalogued), will have to be overcome. The modern technologies, including the AI, should help us on this fascinating path. But what is more important is that members of the newly established research team can bridge the borders between the disciplines, faculties, and siloes of traditionally designed organisations. Having a passionate group of researchers and using modern technologies for exploring thousands of legal acts and transactional systems, allows us to believe in this Project’s success.
The conclusions of the proposed Project enable the identification of these attributes of the entity’s legal definition and identification, which are relevant for concluding transactions on the digitalised market. Such definitions of the attributes might be not only further developed by the scientific disciplines of legal, technology, and economic studies, but have immediate and fundamental impact on the fulfilling of the missing elements in these sciences. The latter brings an added value for the industry, improves supervisory and regulatory actions, and finally ensures better consumer protection and market stability.