The new Office of Financial Research (OFR) is asking for ideas about how it should go about creating a legal entity identifier (LEI) system for financial contracts.

The OFR is a new agency created at the U.S. Treasury Department by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The OFR is supposed to help another new entity, the Financial Stability Oversight Council, keep tabs on the financial services sector as a whole and identity any problems that could hurt the financial system.

The OFR “intends to standardize how parties to financial contracts are identified in the Compassdata it collects on behalf of the Council,” OFR officials say in a notice published today in the Federal Register.

The OFR is starting by issuing a “statement of policy” indicating that it would like to adopt an LEI standard that is established and implemented by private industry and other relevant stakeholders through a consensus process.

The LEI itself would be used to link to databases with information about legal entities, but “the identifier itself should not incorporate substantial information about the entity, such as name or principal place of business,” officials note.

Companies change names and locations all the time, and the OFR wants the LEIs to be more persistent, officials say.

Coming up with a good LEI standard could help counterparties with risk management and margin calculations, and LEIs also could help with efforts to automated financial services company back-office operations, officials say.

“In the public sphere, correctly identifying

parties to financial contracts is critical to assessing the connections among financial firms and to monitoring systemic risk,” officials say.

Private firms and regulators have created a variety of identifiers, but the existence of so many standards creates problems for regulators and policymakers, officials say.

If possible, the OFR would like to issue LEI mandatory use regulations sometime around July 15, 2011.

The request for information does not refer directly to insurance companies or nonbank financial services companies.

Comments are due Jan. 31, 2011.