April 4th, 2018 / Insight posted in Articles

Legal Entity Identifier (LEI) – Does your organisation need one?

The Requirement

From 3 January 2018, legal entities such as companies, trusts, partnerships, societies or associations will need to have a Legal Entity Identifier (LEI) if they have an investment portfolio and wish to ensure their investment managers can continue to provide them with investment services after that date.

This is due to a new EU Markets in Financial Instruments Directive which comes into force on that date.

What is an LEI?

An LEI is a unique 20 character reference number used to identify a legal entity that is a party to a financial transaction. It will enable the regulatory authorities to monitor trading activity and detect market abuse.

How do you obtain an LEI?

The LEI can be obtained directly from the London Stock Exchange (LSE) for an initial fee of £115 + VAT plus an annual renewal fee of £70 + VAT. The responsibility for obtaining the LEI rests with the legal entity but a number of the investment management firms are offering assistance with the process and will apply for the LEI on their client’s behalf for a similar fee.

Action required

Any legal entities with a portfolio of listed investments should contact the relevant investment manager as soon as possible to check whether an LEI is required and if so, confirm who will make the application, to ensure continuity of investment services after 3 January 2018.