For financial market participants in derivative transactions, the possession of a Legal Entity Identifier (LEI) is required by law and is written in Article 9 of the European Regulation EMIR (European Market Infrastructure Regulation).
The Legal basis is however different worldwide. The European Commission is constantly seeking to expand transparency in European financial markets, which is why commitment of the LEI in Europe is an intensely debated subject. They are trying to give the company a reason to request such an identification number even without being mandatory. Consequently, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) advises to follow the international standard as early as possible in order to prevent making a uniform and large-scale identification more difficult. Since the LEI can be used uniformly throughout the world, it is the simplest and most reliable way of global identification.
As of January 3 2018, all investment service companies whose transactions are subject to reports must ensure that all their clients and business partners have an active LEI. This has been defined in accordance with Article 26 of the European Financial Markets Regulation (MiFIR). This also applies to branches from countries outside the European Economic Area in order to correctly identify and track all messages worldwide. If a LEI is not available, the transactions that are subject to report cannot be executed.
The EQS Group has been an expert in the field of reporting obligations for many years. Therefore, we are looking forward to working with you in the future as a LEI distributor and to help you with our know-how competently.