For those of you not on the FCA Newsletter mailing list, you might find the information below of interest as it applies to LEIs which are due to be required for certain clients from 3 January 2018. This is a direct replication of the FCA email as it applies to clients.
FCA Response to EMSA’s public statement on LEIs
On 20 December, ESMA issued a public statement to support the smooth introduction of the Legal Entity Identifier (LEI) requirements for MiFID II implementation.
This statement outlines temporary measures in respect of LEI for clients that are legal persons, and LEI for issuers.
The FCA recognises the importance of LEIs to deliver safer and cleaner markets, but also the need that ESMA has identified for a smooth introduction to the new regime.
The temporary process outlined in ESMA’s statement for LEIs of legal persons will last for six months from 3 January 2018.
As ESMA’s statement notes, this approach requires the FCA to temporarily amend a validation rule in our transaction reporting system, the Market Data Processor (MDP). We will do this as soon as possible, but that change will not be made by 3 January.
We will communicate further with executing firms and Approved Reporting Mechanisms (ARMs) on this issue, including the date when we intend to make the change to the validation rule related to the LEI issuance date. Until then, executing firms should not seek to submit reports that would not normally pass that validation. We will have the facility to accept these reports when the validation rule change has been made.
We continue to expect firms to make every effort to secure a clients’ LEI before trading on their behalf. Our analysis shows that trading with missing LEI is likely to represent a very small fraction of total trading volumes.