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Compliance tip: Mifid II transaction reporting and legal entity identifiers

InvestmentTransaction reporting

Transaction reporting is the reporting of information about trades in reportable financial instruments, such as shares, ETFs, VCTs, investment trusts and structured products. Reporting covers purchases, sales and modifications of reportable instruments. Mifid II proposes important changes to these obligations which will potentially affect all investment firms.

Some exemptions will apply. For instance, creation and cancellation of units in collective investment schemes are exempted from transaction reporting. An advisory firm may be able to rely on a platform or stockbroker completing transactions reports on their behalf. It is worthwhile making contact with platform providers to understand their intended approach and how they will assist firms using their services.

Legal entity identifiers

The implementation of Mifid II will increase the number of entities needing to obtain an LEI. These are already used by many portfolio management firms; however, from 3 January, advisory firms that transmit a “reportable order” such as a client instruction will need to supply their firm’s LEI as the transmitter of the order.

The requirement extends to certain corporate investors, so companies, charities and most trusts will also require an LEI if doing business via a Mifid firm. Where these investors are doing business though a non-Mifid firm, the firm’s LEI can be used instead. But beware, platforms or providers could impose their own conditions and still require an LEI in any case.

LEIs can be obtained from the London Stock Exchange using its Unavista platform. There is an initial fee of £115 plus VAT and an annual renewal fee of £70 plus VAT.

Russell Facer is managing director at Threesixty


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  1. Let us just make it simple – everyone DA firm should have one. Some DFMs require firms to have an LEI however absurd and avoidable it may be so for the removal of all doubt let us have a level playing field – or remove the requirement all together and save our client’s money. Recent legislation introduced by the FCA shows them up as hypocrites – they never had any intention of complying with the spirit of the FAMR let alone the Business Plan. MiFID II is a demonstrable farce perpetuated by self indulgent regulators who see IFAs as collateral damage, with no-one prepared to take them on. That is worrying…….

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