Read this page if you are a firm subject to UK MiFIR transaction reporting obligations. This page will also be of interest to your clients who are legal entities or structures, including a company, charity or trust, and eligible for an LEI.
Who UK MiFIR transaction reporting obligations apply to
UK MiFID investment firms, UK operators of trading venues, UK branches of MiFID investment firms with a Part 4A permission and UK branches of EEA MiFID investment firms who have entered the temporary permissions regime must comply with transaction reporting obligations.
How UK MiFIR impacts LEIs
Firms subject to UK MiFIR transaction reporting obligations will not be able to execute a trade on behalf of a client who is eligible for a Legal Entity Identifier (LEI) and does not have one.
What an LEI is
An LEI is a unique identifier for persons that are legal entities or structures including companies, charities and trusts. The obligation for legal entities or structures to obtain an LEI was endorsed by the G20 (the leaders of the 20 largest economies). For more information on LEIs, including answers to frequently asked questions, see the Legal Entity Identifier Regulatory Oversight Committee (LEIROC) and Global Legal Entity Identifier Foundation (GLEIF) websites.
The purpose of an LEI
An LEI is a code unique to that legal entity or structure. When an LEI code is allocated to you, the code is included in a global data system. This enables every legal entity or structure that is a party to a relevant financial transaction to be identified in any jurisdiction.
What you need to do
If you are subject to the UK MiFIR transaction reporting obligations, you will need to ensure that your clients eligible for an LEI have one before executing a transaction in a financial instrument subject to the UK MiFIR transaction reporting obligations on their behalf.
If you are a client who is a legal entity or structure, including a company, charity or trust, you will need to make arrangements to obtain an LEI code if you want the firm to act on your instructions or make a decision to trade on your behalf.
How to obtain an LEI
An LEI is available from bodies accredited by the GLEIF, or bodies endorsed by the LEIROC, as an authorised Local Operating Unit for the global allocation of LEIs. A list of all Local Operating Units can be found on the GLEIF’s website.
The GLEIF has also introduced the concept of a ‘registration agent’ to assist legal persons to access Local Operating Units. Issuing and arranging for the issue of an LEI is not an activity we regulate.
A Local Operating Unit may charge a fee for allocating the LEI. The precise fee is at the discretion of the Local Operating Unit.
Renewing your LEI annually
To renew your LEI you must provide the Local Operating Unit with updated information so that it may verify the data held on the LEI. The Local Operating Unit may charge the holder of an LEI an additional annual fee per LEI for this annual renewal process.
Firms need, as part of having effective systems and controls, to have adequate client details. However, the requirement under UK MiFIR to renew the LEI on an annual basis applies to all firms that are subject to UK MiFIR transaction reporting obligations.
This issue is covered in the ESMA guidelines on transaction reporting, which remain relevant to the UK MiFIR transaction reporting regime, which state (section 5.5):
‘While executing Investment Firms should ensure that their LEI is renewed according to the terms of any of the accredited Local Operating Units for the Global Entity Identifier systems pursuant to Article 5(2) of the Commission Delegated Regulation (EU) 2017/590, there is no requirement under Article 13(3) to ensure that a LEI for a client or a counterparty has been renewed.’
For any additional questions please email [email protected]