ESMA warns period for smooth introduction of LEIs not to be extended after July 2018

Maria Nikolova

The temporary period will last until July 2, 2018, as ESMA has concluded that there is no need to extend it further.

MiFID II implementation likely to be set back even further

The European Securities and Markets Authority (ESMA) has earlier today informed reporting firms that will not extend further the temporary period allowing for a smooth introduction of the use of Legal Identity Identifiers (LEIs).

Let’s recall that reporting firms have to use LEIs to report trades under the Markets in Financial Instruments Regulation (MiFIR). The six months period was introduced in December 2017 due to the fact that not all firms had managed to obtain LEIs in time for the MiFID II start.

ESMA and National Competent Authorities (NCAs), however, have since seen a substantial rise in the LEI coverage for both issuers and clients. As a result, ESMA and NCAs have concluded that there is no need to extend the initial six month period granted to support the smooth introduction of the LEI requirements under MiFIR. The temporary period will last until July 2, 2018 (inclusive).

The activities of national regulators with respect to the LEI requirements will be shifting from monitoring to ongoing supervisory actions. ESMA and NCAs are coordinating the development of a common supervisory action plan focused on compliance with the LEI reporting requirements under the respective MiFIR provisions.

Following the 2008 financial crisis, the G20, the Financial Stability Board (FSB) and many regulators around the world have emphasised the need to make the Legal Entity Identifier (LEI) a global public good. The LEI provides a unique identifier for all entities participating in financial transactions which can be used cross-border, through a free and open database updated on a daily basis. This common framework plays an important role for regulators across the globe so that they can clearly identify each exposure for the risk management of financial transactions, to create transparency, and to conduct market surveillance.

The use of the LEI is required by or in the process of being implemented by other regulators with 90 pieces of future legislation envisaged across the globe, 75 of these outside the EU, ESMA has estimates. Finally, the LEI also generates important benefits for businesses in terms of cost reduction, improved risk management and increased operational efficiencies.

Accordingly, the LEI plays an important role under the new Markets in Financial Instruments Regulation (MiFIR) data-reporting regime. The code is essential for supporting regulators’ work on transparency and market surveillance, including the detection of market abuse. The LEI is also key for matching and aggregating market data for both MiFIR transparency and regulatory reporting.

Read this next

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

<