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EMIR, Mifid, Uncategorized

LEIs required soon

The Legal Entity Identifier initiative was born out of the G20 measures put in place to reduce systemic risk, at the same time as the declaration which led to  rules such as EMIR and the Dodd Frank Act being enacted. The rationale for the initiative is to form a global and reliable list of each counterparty, in order to be able to identify the party of exposure in a concentrated risk situation. MiFID II requires those who report to use LEIs to identify “counterparties” using a LEI. LEIs will also be mandatory for EMIR reporting with the changes coming on 1st November 2017(see here).

The UK’s Financial Conduct Authority(FCA) has reminded the market of the requirement in the latest Market Watch newsletter, which can be found here. A more detailed background into LEIs can be found in this article on the Bobs Guide web site by David Beach.

LEI adoption has been particularly slow in Asia. Many counterparty with connections to Europe will need to obtain an LEI in time for MiFID II. While MiFID II overall has a limited effect on some counterparties (for example see here on the FT web site), it will be necessary for many to obtain an LEI, as reported in this article on the Global Trading web site.

 

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on energy and commodity regulation. He has more than 20 years of experience in energy and commodity trading, credit, risk and financial technology. He has delivered a series of trading, credit and risk solutions to a wide variety of oil majors, power and gas companies and investment banks. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.

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