LEI for banks, investment firms, asset managers

As of 3 January 2018, banks, investment firms and asset managers must report securities transactions carried out on behalf of clients to BaFin. An LEI - legal entity identifier - is obligatory for the clear identification of the so-called entities.

What needs to be done?

If not already done, customers must be informed regarding the new legal situation and prompted to apply for an LEI. If customers do not want to handle this themselves, it is possible for banks and asset managers with a power of attorney to apply on this portal on behalf of the customer. Self-registration requires accurate reference data. GS1 Germany will then verify the reference data with the relevant local authority - for example, a national trade register.

Background

The legislation stipulated by MiFID II / MiFIR requires that a significant number of market players, for which there is currently no corresponding obligation, must have an LEI in the future. For example, investment firms should obtain LEIs from their clients before providing services that require reporting of transactions carried out on behalf of those clients.

It was implemented in 2008 as a result of the financial market crisis. The insolvency of the investment bank Lehmann Brothers triggered a chain reaction on the financial markets. The leading industrial and emerging economies (G20) agreed to increase transparency and security in off-market trading in financial derivatives.