The Global Legal Entity Identifier Foundation (GLEIF), the body responsible for ensuring the operational integrity of the Global Legal Entity Identifier (LEI) System, calls on market participants that will have to comply with the forthcoming European Union (EU) revised Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR) to obtain an LEI as soon as possible. Failure to obtain an LEI (by the firm or its client) in time will prevent firms from being able to comply with the reporting requirements applicable in the EU as of 3 January 2018. To further streamline the issuance of LEIs, GLEIF has introduced the concept of the ‘Registration Agent’, which allows organizations to help their clients to access the network of LEI issuing organizations.
MiFID II and MiFIR, which cover trading venues, investment firms and intermediaries, will take effect on 3 January 2018. The MiFID II/MiFIR implementing legislative acts require a significant number of actors to obtain an LEI that are under no such obligation to date. With regard to transaction reporting under MiFIR, the European Securities and Markets Authority (ESMA) has clarified that investment firms should obtain LEIs from their clients before providing services which would trigger reporting obligations in respect of transactions carried out on behalf of those clients.
The concept of the Registration Agent, introduced by GLEIF, helps investment firms and their clients to comply with reporting requirements in general. The Registration Agent’s role in the Global LEI System is directly connected to the LEI issuing organization. LEI issuing organizations – also referenced as Local Operating Units – supply registration, renewal and other services, and act as the primary interface for legal entities wishing to obtain an LEI.
The Registration Agent may choose to partner with one or more LEI issuing organizations to ensure its clients’ needs for LEI services are met. Possible tasks performed by a Registration Agent include:
- Publishing information on its website to help a legal entity apply for an LEI with an LEI issuing organization.
- Managing communications with the legal entity.
- Collecting and transmitting to the LEI issuing organization the information required to verify the existence of the entity applying for the LEI.