ESMA Issues MiFID II LEI implementation requirements


We are less than two weeks close to the launch of MiFID II regulations, and ahead of the event, EU regulator ESMA Issues MiFID II LEI implementation requirements to ensure the smooth obligations implementation process.

21 December, AtoZForex The European Securities and Markets Authority (ESMA) has published a statement in order to ensure the smooth implementation of Legal Entity Identifiers (LEI) requirements under the Markets in Financial Instruments Regulation (MiFIR).

MiFID II LEI implementation obligations

As we previously reported, all investment firms need to identify their clients that are legal persons with LEIs under the upcoming MiFIR regulations. The purpose behind this is to comply with MiFID II transaction reporting.

All the trading venues across the EU are required to identify each issuer of a financial instrument traded on their systems with LEI code. This needs to be done when making daily data submission to the Financial Instruments Reference data System (FIRDS).

However, over the period of the last weeks, ESMA along with national competent authorities (NCAs) have found out that not all of the investment firms will be able to obtain LEI codes from all their clients ahead of the MiFID II deadline. In fact, the same might be the case for the trading entities’ non-EU issuers whose financial instruments are subject to trade on the EU trading venues.

ESMA Issues MiFID II LEI implementation requirements

In regards to that, and to back the successful implementation of the MiFID II LEI requirements, ESMA decided to a allow for a temporary period of six months the following:

  • 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; and
  • trading venues report their own LEI codes instead of LEI codes of non-EU issuers currently not having their own LEI codes.

The EU regulator also mentions that this approach will be shared by both ESMA and NCAs.

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