The Global Legal Entity Identifier Foundation (GLEIF), the body responsible for ensuring the operational integrity of the Global Legal Entity Identifier (LEI) System, is calling on market participants that will have to comply with the forthcoming European Union (EU) revised Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR) to obtain an LEI as soon as possible.
Failure to obtain an LEI (by the firm or its client) in time will prevent firms from being able to comply with the reporting requirements applicable in the EU as of 3 January 2018.
To further streamline the issuance of LEIs, GLEIF has introduced the concept of the Registration Agent, which allows organisations to help their clients to access the network of LEI issuing organisations.
MiFID II and MiFIR, which cover trading venues, investment firms and intermediaries, will take effect on 3 January 2018. The MiFID II/MiFIR implementing legislative acts require a significant number of actors to obtain an LEI that are under no such obligation to date. With regard to transaction reporting under MiFIR, the European Securities and Markets Authority (ESMA) has clarified that investment firms should obtain LEIs from their clients before providing services which would trigger reporting obligations in respect of transactions carried out on behalf of those clients.
The concept of the Registration Agent, introduced by GLEIF, aims to help investment firms and their clients to comply with reporting requirements in general. The Registration Agent’s role in the Global LEI System is directly connected to the LEI issuing organisation. LEI issuing organisations – also referenced as Local Operating Units – supply registration, renewal and other services, and act as the primary interface for legal entities wishing to obtain an LEI.
GLEIF chief executive Stephan Wolf (pictured) says: “We urge impacted market participants to get an LEI as soon as possible. The LEI issuing organisations are standing ready to assist legal entities to obtain an LEI as well as to collaborate with firms interested in acting as a Registration Agent. However, we cannot guarantee that LEIs will be issued in time for MiFID II/MiFIR to apply if registration is delayed until the fourth quarter of 2017.
“ESMA has also confirmed to GLEIF that compliance with MiFIR requires investment firms to maintain its own LEI duly renewed. This means that the reference data, i.e. the publicly available information on legal entities identifiable with an LEI, is re-validated annually by the managing LEI issuer against a third party source. An investment firm should therefore ensure that its LEI is renewed by the date stated with its LEI record.”
