How many LEIs have been issued due to MiFID II? Has LEI issuance crested, and if so, when? Did many wait until the end of the year to apply for an LEI? Is MiFID II-related LEI issuance still occurring? At LEI Smart we’re naturally interested in these questions. That interest was further piqued by ESMA’s last-minute delay to some of MiFID II’s LEI related requirements. We’ve analyzed LEI issuance data to come up with answers to these questions.
On December 20th, 2017 ESMA issued a statement announcing steps intended to smooth the introduction of MiFID II’s legal entity identifier (LEI) requirements. Some of the news headlines regarding the statement might lead you to believe that all of MiFID II’s LEI requirements have been delayed six months, but that’s not the case. Additionally, the delayed requirements have conditions attached. If you are actively involved in LEI data management or are working on MiFID II implementation, it’s worth reading ESMA’s brief, two-page statement.
“No LEI, No Trade” means investment firms must know their client’s LEI before entering a trade. Without the client’s correct LEI, the trade is not allowed. This rule is part of MiFID II’s transaction reporting requirements. This post reviews the LEI-related specifics of these requirements. This is our second in a series of posts on MiFID II and the LEI. If you are brand new to the LEI or MiFID II, the first post introduces both.
Seventeen different types of corporate actions trigger LEI data updates, according to a consultative paper published in late July by the LEI Regulatory Oversight Committee (ROC). The paper proposes data model and process enhancements to make these updates easier to track and timely. We’ve reviewed the thirty-page paper and provide a summary and some comments. Corporate Actions Resulting in LEI Updates These are the corporate actions that trigger LEI data updates:
“No LEI, No Trade” captures the essence of MiFID II’s legal entity identifier (LEI) requirements. You may have seen this phrase in a financial markets publication or blog post. Its use is invariably accompanied by a call for European market participants to apply for a legal entity identifier in advance of the January 3rd go-live. Please heed this call. If your firm or fund doesn’t have an LEI by that date, you won’t be able to trade in European markets.