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.