LEI update

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.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

Clients that need an LEI should still obtain one as soon as possible but this temporary solution offers a little leeway where that cannot be done on time.

Action Required By You

For information and action as indicated.

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About the Author

Technical Manager - Often referred to as the Oracle or the Sage, Alistair has a wealth of financial services experience. He is our go-to Technical Manager and enjoys nothing more than a complicated conundrum. Feel free to test his renowned knowledge by getting in touch.

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