Legal Entity Identifier for financial instruments

Legal Entity Identifier (LEI)

With effect from 3rd January 2018, it will be a legal requirement for persons that are a legal entity or structure including companies, charities, and trusts (including pension schemes) to have an LEI number. An LEI is a unique 20 digit code designed to provide a standardised and clear way to identify legal entities participating in worldwide financial markets. This enables every legal entity or structure that is party to a relevant financial transaction to be identified in any jurisdiction. All parties who do not have an LEI after this date will not be able to transact a financial instrument until an LEI is in place.

Reportable instruments

Transaction reporting (the need to have an LEI) covers purchases, sales and modifications of only ‘reportable instruments’. Any instrument traded or admitted to trading on an EEA recognised investment exchange, multilateral trading facility or organised trading facility is reportable. The trading of shares in an unlisted company does not need an LEI.

In simple terms, transactions are reportable if the instruments that are the subject of the transaction are tradeable. Reportable instruments include:

  • Shares / listed securities
  • Exchange traded instruments (e.g. ETFs)
  • Venture capital trusts (VCTs)
  • Investment trusts
  • Warrants
  • Gilts
  • Corporate bonds
  • Structured products

Collective investments (‘funds’ such as unit trusts and OEICs) would also be included in this list.

Obtaining an LEI

If this is relevant to your entity, you will need to make arrangements to obtain an LEI code in order to make any transactions after 3rd January 2018. LEIs must be obtained by a regulated LEI issuer which for the UK is the London Stock Exchange (LSE).

To request an LEI you’ll need to register as a user on the LSE’s LEI Platform and follow the instructions. The initial allocation cost at the time of writing is £115 + VAT. If you are an MHA Carpenter Box client, it is important that once you receive your LEI number that this is provided to us. Should you wish for us to apply for this on your behalf, we can do this for a cost of £300 +VAT; please get in touch with your Account Manager and they will send you the relevant documents.

If you require further information please don’t hesitate to contact our Wealth Management team on 01903 534587.