No LEI, No Trade
Time has now run out. Well, for those legal entities that have yet to obtain an LEI that is. Since June 3rd, EU investment firms without a Legal Entity Identifier have been subject to a restriction on providing any services that trigger an obligation to submit a transaction report for a transaction entered into on behalf of a client who is eligible for an LEI code. This step change occurs as the MiFID II regulation finishes its 6-month transition since its commencement on January 3rd, to allow firms to catch up with its requirements.
This new legislative framework seeks to strengthen investor protection and improve the overall functionality of financial markets to make them more efficient, resilient and transparent. Prior to this recent deadline, EU investment firms have been able to offer their services to eligible entities, on the proviso that they obtain the clients’ LEI code or necessary documentation on its behalf. However, this month’s deadline marks the cut-off point, whereby approved reporting mechanisms and national competent authorities will now reject transaction reports that fail to meet MIFiR II requirements.