Leis: ESMA Grace Period Ends On 2 July 2018

Author:Mr Phil Cody, Robert Cain, Maedhbh Clancy and Kim O'Dowd
Profession:Arthur Cox
 
FREE EXCERPT

The grace period given by ESMA in December 2017 to investment firms and trading venues in respect of their LEI-related obligations under MiFIR (the Markets in Financial Instruments Regulation) expires on 2 July 2018, and will not be renewed.

MiFIR

MiFIR required, from 3 January 2018, any entity subject to transaction reporting obligations under MiFIR to use the relevant client's Legal Entity Identifier (LEI) for identification purposes when reporting transactions.

In-scope entities include investment firms and operators of trading venues.

THE GRACE PERIOD

In our Legal Entity Identifiers: January 2018 Update, we drew your attention to the fact that, because:

ESMA had become aware that not all investment firms would be able to obtain LEI codes from all clients that were legal persons by 3 January 2018, and many trading venues might need additional time to inform non-EU issuers whose financial instruments are traded on EU trading venues about the LEI requirements under MiFIR and the Market Abuse Regulation (MAR), ESMA had decided to grant a 6-month grace period.

The grace period allowed investment firms to provide a service that triggered the obligation to submit a transaction report to the client, from which it did not previously obtain an LEI code, on the condition that before providing the service, the investment firm obtained the documents required from the client to enable the investment firm to apply for an LEI code on the client's behalf.

The grace period also allowed trading venues to report their own LEI codes instead of the LEI codes of non-EU issuers while they were undergoing the process of informing non-EU issuers of the LEI...

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