Have you registered your LEIs?

Emily Deane TEPEvery legal entity will need to get a Legal Entity Identifier (LEI) by 3 January 2018. Emily Deane TEP explains what LEIs are, and how to get one.

What is an LEI?

The Global Legal Entity Identification Foundation (GLEIF) has designed a system where every ‘legal entity’ will need to register and obtain a unique identification number – a Legal Entity Identifier (LEI) before it can trade on financial markets in the UK after 3 January 2018.

The London Stock Exchange (LSE) requires investors who are deemed to be legal entities to obtain an LEI, which is a 20-character alphanumeric reference code that is unique to the legal entity. Legal entities include Trusts (but not Bare Trusts), Companies (Public and Private), Pension Funds (but not Self-invested Personal Pensions), Charities and Unincorporated Bodies that are parties to financial transactions.

Do trusts need one?

Bare trusts have been excluded from the requirement to obtain an LEI, but all other trusts will be obliged to obtain one if they are parties to financial transactions. In the case of discretionary trusts which have legal restrictions and cannot disclose trust details, the LSE will accept a validation from the trust itself and will not require sight of the trust deed. However, in all other cases the LSE will generally accept a scanned copy of the first couple of pages of the trust deed in the same way that many banks do for AML compliance.

Entities other than trusts are obliged to provide information such as their official registry details and business address. All LEI data will be consolidated in one database in an effort to improve global entity identification and standardisation.

What if I don’t apply?

If the LEI has not been obtained by 3 January 2018 then investment firms will not be able to provide the legal entity with investment services. The legal entity itself is ultimately responsible for obtaining the LEI, but some investment firms may agree to apply for the LEI on behalf of their legal entity clients. The LSE has produced a draft format (pdf) which will be acceptable in order to transfer the application authority from the entity to a third party such as a management company.

The LSE will charge an initial allocation cost of GBP115 + VAT and annual maintenance cost of GBP70 + VAT per LEI.

How do I register?

Registration for individual LEI allocation requests started on 5 August 2013. You can request your LEI via the link below, and there are two user guides to help you:

More information can be found on the Financial Conduct Authority’s website:


Emily Deane TEP is STEP Technical Counsel

 

7 thoughts on “Have you registered your LEIs?

  1. Nothing is said about whether an estate in the course of administration is or is not a “legal entity” for the purposes of the Stock Exchange. A little guidance would be helpful, not least because if one is, the number of potential applicants will skyrocket

  2. you advise “Bare trusts have been excluded from the requirement to obtain an LEI” how do identify if they are a Bare Trust

    • A bare trust holds a gift in trust for the benefit of a specified beneficiary who becomes absolutely entitled to the trust property at the age of 18. Once the gift has been made the beneficiaries cannot be changed and money cannot be withheld from them beyond the age of 18.

  3. Given the LEI provides publicly accessible information about entity and ownership, NON-EU Clients with entity accounts have chosen NOT to apply for an LEI and have been told by multiple international banks with whom they have accounts, it simply means they cannot undertake Derivatives trading, which they are already NOT interested in.

    I am not sure how that fits into this blog.

  4. There appears to be some confusion regarding bare trusts. The article above states that a bare trust does not need an LEI. We deal with an investment platform where we hold bare trusts to hold investments for minors. They have taken legal advice which has confirmed “The conclusion was that Bare Trusts do indeed require LEIs because we accept instructions from Trustees in respect of investments. Therefore they cannot be considered as purely an individual’s account where we would report the natural person”.

    Any comments welcome.

    • Thanks Stuart. I believe the position now is that it depends whether firms classify bare trusts as legal entities or as individual/joint accounts. Where it is the latter the buyer/seller for non-discretionary accounts involving a minor (bare trust, minor, Junior ISA, Child Trust Fund) would be the minor (CONCAT) and the decision maker would be the individual responsible for opening the account. Where the account is discretionary, the decision maker would be someone at the investment firm.

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