Popular Posts:

What’s New:

GLEIF’s verifiable LEI issuer qualification programWhat are Child Entities and How do They Relate to Other Entities?Do I need an LEI when selling shares?Business Transparency: How to Create an Environment of TrustAnti Money Laundering (AML) in Banking: Everything You Need to KnowCorporate Structures Demystified: What You Need to KnowKYC in Banking: Why It’s Important and How to ComplyWhat is a parent company and how does it work?How long does it take to get an LEI?ISO 5009 – Identifying organizational rolesISO 17442 – Standard for LEI code structureESRB discusses the future of LEIGlobal Business Identifier (GBI) – Trade Transformation InitiativeWhat documents are required when registering LEI?How to get an LEI?Who is an LOU in the LEI Dimension?GMEI Utility vs LEI RegisterLapsed LEI – Why should you keep your LEI active?Who is an LEI Registration Agent?Are LEIs public?What is LEI transfer?Can an individual have an LEI?Do LEI numbers need to be renewed?Why is an LEI number required?How much does an LEI number cost?LEI Lookup – Fully dedicated LEI search websiteISIN to LEI mappingGLEIS | Global LEI SystemMiFID regulation | MiFID II LEIvLEIGLEIF | Global Legal Entity Identifier FoundationCompany Autocomplete by LEI RegisterOpen LEIEuropean Market Infrastructure Regulation | EMIRWhat is an LEI database?LEI Application – Apply For An LEI OnlineLEI Checker – Search Your LEI OnlineWho Needs An LEI Number?LEI for TrustsLegal Entity Identifiers in CryptocurrencyLegal Entity Identifiers in KYCDigital Identity Predictions for 2020The Future of Cybersecurity – DeloitteLegal Entity Identifiers in Digital CertificatesBroad Adoption of LEIs Could Save The Global Banking Sector US $2-4 BillionLegal Entity Identifiers for Government EntitiesThe European Market Infrastructure Regulation (EMIR) and Legal Entity Identifiers (LEIs)The FCA Will Take Pragmatic Approach to Supervising Reporting on Brexit DayAdoption of LEI in Payment Messages by the Payments Market Practice Group (PMPG)RegTech London – Event SummaryWhat is LEI-Search?LEI Register and RapidLEI Announce Official Partnership

The European Market Infrastructure Regulation (EMIR) and Legal Entity Identifiers (LEIs)

The EMIR regulation has mandated EU trade repositories, starting on November the 1st 2017, to reject trade reports without a Legal Entity Identifier or LEI, regardless of whether the reports pertain to EU or non-EU market participants.

LEIs are mandatory for entity identification of both parties involved in derivative contracts whether financial or non-financial. Information should include the parties that enter, the beneficiary, the booking entity and the clearing member.

Article 3 of the EMIR regulation No 1247/2012 titled, “Identification of counterparties and other entities” states:

  1. A report shall use a legal entity identifier to identify
    1. A beneficiary which is a legal entity
    2. A broking entity
    3. A CCP
    4. A clearing member
    5. A counterparty which is a legal entity
    6. A submitting entity.

For customers and individuals who do not have a BIC or LEI, ESMA initially adopted the view that a client code, account number or member ID would be sufficient but that has since changed in the publication of a consultation paper by the ESMA. On page 9 point 29 states:

“To avoid any misuse of Interim Entity Identifier, BIC or Client codes, ESMA assessed the necessity of allowing all of those code types in all relevant fields. According to the assessment, in certain instances, a private individual could not be identified in a particular field and therefore it is proposed to delete the possibility of using a client code in that field. As LEIs, fulfilling the ROC principles and the ISO 17442 standard are already in place, there is no need to provide the possibility of using less robust identifiers like BICs or Interim Entity Identifiers any longer and therefore these are proposed to be deleted as well.”

It is now the viewpoint of the ESMA that only individuals should have the ability to use a client ID or account number as identifiers but any entities should use an LEI. It should be noted that individuals acting in a business capacity have the ability to register a Legal Entity Identifier, according to the LEI ROC.

It is also understood that the LEI needs to add a capability to identify branches under the same legal entity. For example, bank branches which come under one legal entity but may require separate identification for cross-border resolution schemes. The LEI ROC has referred to these as “international branches” and has made some recommendations on the conditions in which an international branch would be able to obtain a LEI.

For more information on reporting obligations under EMIR, visit this page.

To purchase a Legal Entity Identifier for your organisation, click here.