In Australia, who would require an LEI?
The Mifid II directive is developed to govern European securities trading enterprises. Australian entities must use the LEI when trading, reporting, or conducting business in the US, EU, or UK.
OTC derivatives dealers and trustees, as well as, starting in October 2019, SMSF (Self Managed Superannuation Funds) traders and trustees, are among the financial institutions taking part.
Since the introduction of the ASIC Derivative Transaction (Reporting) Rules in 2013, the LEI has been a preferred identification for ASIC (the Australian Securities and Investments Commission) and its members. Under the guidelines, it is mandatory for counterparties to over-the-counter derivatives to be identified by means of an LEI identifier.
In the United States of America, who needs an LEI?
Nearly 14% of the world’s LEIs are registered in the financial services industry in the United States, making it the LEI’s primary market. Many US rules, such as the Dodd Frank Act, call for the LEI to be used for transaction reporting.
Securities trading in Europe, including by US firms, is now governed under the Mifid II directive. Similar to Mifid II in Europe, the SEC (Securities and Exchange Commission) has enacted a number of similar regulations in the United States.
The 2019 Financial Transparency Act is an example of a policy that requires companies to be more open about their finances. Since the introduction of the LEI system by various US financial regulators, the capital markets have become more transparent.
Since 2012, the LEI has been mandated by the CEA (Commodity Exchange Act, 2012) for reporting purposes. Although LEI reporting is currently mandated by the Dodd-Frank Act for certain transactions, it is not required for other transactions (Securities Exchange Act).
The FERC (Federal Energy Regulatory Commission), which will mandate the LEI for data collecting in 2020 in the US, is the most recent development.
In Canada, who needs an LEI?
As part of their efforts to promote market transparency, regulators all around the world have adopted the Legal Entity Identifier (LEI).
This legislation, known as Mifid II, has been implemented by European financial institutions that trade in securities. SEC (Securities and Exchange Commission) mandates, such as the 2019 Financial Transparency Act, have been introduced in the United States as well.
Because of its numerous applications and advantages, the LEI Number is also being used by the commercial sector, particularly the financial industry. Banks can save up to $2-4 billion yearly in time and expenses by incorporating an LEI check into their KYC procedures. If you want to know more about LEI services in any nation you can visit, leiservice.com
Conclusion
Regulating the actions of European enterprises engaged in the securities trading business, Mifid II was drafted. In addition to trading and reporting in the United States, the European Union, or the United Kingdom, Australian firms also need an LEI. Mifid II, a European regulation designed to improve market transparency, has been adopted. The United States has passed similar rules. In certain transactions, LEI reporting is required under the Dodd-Frank Act; in other transactions, LEI reporting is optional.
