December 20, 2017

ESMA issued a statement to support the smooth implementation of Legal Entity Identifier (LEI) requirements under the Markets in Financial Instruments Regulation (MiFIR). MiFIR obliges EU investment firms to identify the clients that are legal persons with LEIs for the purpose of MiFID II transaction reporting. Trading venues are equally obliged to identify each issuer of a financial instrument traded on their systems with an LEI code, when making daily data submission to the Financial Instruments Reference Data System (FIRDS).

ESMA and national competent authorities recently received a number of indications that not all investment firms will succeed in obtaining LEI codes from all their clients that are legal persons, ahead of January 03, 2018. These firms might be approached by such clients, after January 03, 2018, with the request to provide a service triggering the obligation to submit a transaction report. Similarly, ESMA and the national competent authorities are aware of the concerns raised by some trading venues that additional time might be required to reach out to non-EU issuers whose financial instruments are traded on European trading venues, to inform them about the applicable MiFIR and Market Abuse Regulation, or MAR, requirements and obtain their LEI codes. To support smooth introduction of the LEI requirements, ESMA will allow the following for a temporary period of six months:

  • Investment firms may provide a service triggering the obligation to submit a transaction report to the client, from which it did not previously obtain an LEI code, under the condition that before providing such service the investment firm obtains the necessary documentation from this client to apply for an LEI code on his behalf
  • Trading venues report their own LEI codes, instead of LEI codes of the non-EU issuers, while reaching out to the non-EU issuers

 

Related Link: Press Release

 

Keywords: Europe, EU, LEI, FIRDS, MiFID/MiFIR, Trading Venues, ESMA

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