On October 9, the European Securities and Markets Authority (ESMA) published a briefing (Briefing) on the importance of the legal entity identifier (LEI) in enabling firms to comply with their obligations under the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR), beginning January 3, 2018.

The LEI is a 20-digit, alpha-numeric code that enables clear and unique identification of legal entities participating in financial transactions. LEIs, like other identifiers, are needed by firms to fulfil their reporting obligations. In order to obtain an LEI, entities should contact an LEI issuer. The list of LEI issuers is available on the Global LEI Foundation (GLEIF) website.

The LEI plays an important role in the new harmonized data-reporting regime under MiFID II, in particular under Articles 26 and 27 of MiFIR, and it is crucial to ensure the quality and consistency of the data reported to EU supervisors. ESMA states that it is also key to improving market surveillance and transparency, and generates important benefits for businesses in terms of costs reduction, improved risk management and increased operational efficiencies.

The Briefing is available here.