Does my company need an LEI?

Firms engaged in derivatives trading, and which must report these activities via a transaction register according to EMIR (European Market Infrastructure Regulation), must have had a LEI since 12 February 2014 already.

As from 3 January 2018, the scope of application of the LEI is extended in accordance with the European Regulation MiFID II/MiFIR (Art. 26 of Regulation N° 600/2014). All legal entities that buy or sell certain financial instruments such as shares or bonds also need a LEI.

From 13 April 2020, the European Union (EU) Securities Financing Transaction Regulation (SFTR) further extends the LEI's implementing rules.

Who is affected and where?

In short, all EU financial and non-financial entities are required to report their SFTs and use the LEI to identify themselves. The requirement applies to any party established in the EU, including all of its branches irrespective of where they are located, and any EU branches of non-EU parties.

The regulation covers a wide range of firms, including but not limited to:[2]

  • Banks
  • Brokers
  • Funds and alternative funds
  • Pension funds
  • Investment firms
  • Central Counterparty Clearinghouses (CCPs)
  • Central Security Depositories (CSDs)
  • Insurance companies and reinsurance undertakings
  • Undertakings for Collective Investment in Transferable Securities (UCITs)
  • Accredited Investment Fiduciaries (AIFs), and non-financial counterparties.

Small and medium enterprises do not have to report their transactions with financial entities themselves because these transactions will be reported by their financial counterparty. However, they still need to have an LEI for reporting purposes.

When does the regulation take effect for each SFT participant category?

The reporting requirements are going live between April 2020 and July 2021, and will gradually apply to successive tranches of firms categories. The first group is required to comply by 13 April 2020.

 


Reporting obligation start date 

    Entities under reporting obligation

13 April 2020
(Note: reporting deadline 13 July 2020 due to COVID-19)

Investment Firms

Credit Institutions

Relevant third country entities

13 July 2020

Central Counterparties (CCPs)

Central Security Depositories (CSDs)

Relevant third country entities

13 October 2020

Insurance companies

Funds

Institutions for Occupational Retirement Provision (IORP)

Relevant third country entities

13 April 2021

Third-country issuers

13 July 2021

Non-financial counterparties