LEI’s and MiFID II, why you need one and how to get one

Back in April 2016, Cappitech took a look at LEIs and why they are an integral part of EMIR derivative reporting requirements. With MiFID II coming into effect on January 2018, we felt it was time to provide an LEI update and how it relates to the new regulation.

MiFID II is around the corner and one of the most far reaching changes the new regulation brings centers around Legal Entity Identifiers (LEIs). Luckily, it’s also one of the easiest aspects of MiFID II and MiFIR reporting rules to comply with.

What is an LEI?

An LEI is a twenty-character alpha-numeric code to identify global businesses. Individual countries already have their own corporate directories and registry systems. With the LEI framework, there is now a global database for registering your firm and identifying your firm for cross-border transactions.

Created in 2012 and supervised by the Regulatory Oversight Committee (ROC), LEIs provide a unified standard for financial transaction and trade reporting. Through it, firms are able to identify themselves and counterparties using the LEI code in their reports.


Requirements to have an LEI has existed on EU financial and non-financial companies opening accounts and placing derivative trades since EMIR went into effect in 2014 (more on EMIR). With MiFID II, the LEI requirements are now expanded to all EU corporate counterparties.

What this means is that corporate customers of EU financial firms such as a bank or broker will now need to have an LEI. Without one, they will no longer be able to place trades with EU financial firms starting in 2018.

Two major impacts

Non-EU customers – Although MIFID II is an EU directive, parts of it effect non-EU firms as well. The biggest impact is that to trade with EU financial firms, even non-EU companies will need to have an LEI in place to continue to have a trading relationship with their banks, brokers and asset managers. (More on MiFID II for non-EU firms)

Responsibility falls to EU brokers and banks – Another group impacted are EU brokers and banks. Currently, the burden for their corporate customers to provide them an LEI falls on the account holder. Therefore, if the customer elects not to register for an LEI, a broker and bank can still onboard them as a client and process their trades.

However, with MiFID II, the burden now falls on banks and brokers to ensure that their customers have an LEI. The LEI code then needs to be collected and used in Transaction Reports such as for MiFIR and EMIR.

Due to an importance of getting an LEI, registration numbers are expected to increase dramatically prior to 2018. As of this writing, there have been nearly 530,000 LEIs registered, with over 345,000 that are active. As it is a fairly quick process, firms requiring one can prepare for MiFID II now and register for an LEI.

Applying for an LEI

To obtain an LEI, firms register with any of the 30 Local Operating Units (LOUs) that process new LEI applications. The LOUs are a collection of global entities, the majority of which are connected to stock exchanges or involved with the capital markets. (Full list of LOUs)

Information needed for the LEI is:

  • Legal entity name
  • Registered legal entity address
  • Business register number if applicable
  • Letter of authorization if applying on behalf of a legal entity
  • For Funds – a prospectus and or supplement document is also be required

Fees: LEI costs vary per LOU, with an approximate year one fee of $150-$200 and are required to be renewed annually. Most LOUs provide lower per LEI fees for bulk company registrations and renewals.

Need help with your LEI or preparing MiFIR/MIFID II Reporting? Talk to the experts at Cappitech


Ron Finberg
About the author: Ron Finberg
Ron is Executive Director, Product Specialist at S&P Global Market Intelligence Cappitech and helps customers with their compliance of EMIR, MIFIR, SFTR, MAS and ASIC derivative reporting. Ron is an ongoing contributor of regulatory focused content and webinars and leverages his over 20 years’ experience in the financial industry. He was also awarded the Editor’s Recognition Award for Best RegTech Vendor Professional in the RegTech Insight Europe Awards 2021.