On December 20, 2017, the European Securities and Markets Authority (ESMA) published a statement intended to support a smooth introduction to the legal entity identifier (LEI) requirements of the Markets in Financial Instruments Regulation (MiFIR).
MiFIR’s transaction reporting regime requires EU investment firms to identify that their clients are legal persons with LEIs. Trading venues are also required to identify each issuer of a financial instrument traded on their systems with an LEI when making daily data submissions to ESMA’s Financial Instruments Reference Data System (FIRDS).
ESMA became aware, however, that not all investment firms would succeed in obtaining LEI codes from all of their clients ahead of MiFIR coming into force on January 3. ESMA stated that this may also may have been the case for non-EU issuers, whose financial instruments are traded on European trading venues.
Consequently, for six months after January 3, ESMA will allow:
- An investment firm to provide a client service triggering the obligation to submit a transaction report, where the investment firm did not previously obtain an LEI code from its client, under the condition that before providing such service the investment firm obtains the necessary documentation from this client to apply for an LEI code on their behalf; and
- Trading venues to report their own LEI codes instead of the LEI codes of non-EU issuers that do not currently have their own LEI codes.
The statement is available here.