Regarding 'MiFID II transaction reporting' and LEI number for Ltd companies

[mickael28]

Hi,

I've been investing in shares through the limited company for a couple of years now and I just got a generic email from the broker regarding a subject that I don't quite understand, and in the email they mention that they cannot advice on individual basis either.

Do you guys know if a limited company used by a contractor needs to get a LEI number and the 'MiFID II transaction reporting' applies to us?

I found a few links about the subject, but it's still not clear if I'll be able to trade from Jan 2018 or not if I don't get such a LEI number:

https://www.fca.org.uk/markets/mifid...ier-lei-update

If anyone knows about the subject and could let me know pls?

[cojak]

Try this MiFID 2/MiFIR: What, When, Who and How? Transaction reporting

[mickael28]

What are the key differences between the current regime and MiFID 2?

MiFID 2 has expanded the scope and level of prescription of investment firms’ transaction reporting obligations. Transaction reporting will apply to a much wider range of financial instruments and require the disclosure of additional mandatory data and imposes an obligation on firms that receive and transmit orders, but do not execute orders, to transmit certain required details of such orders to the receiving investment firm, or to report the order themselves.

I've seen some articles quite generic about the subject. It seems that one was create a few years ago comparing it to the current investing framework at the time, but it doesn't seem to go to much in specifics about what type of companies or financial instruments are affected either.

I'll see if my accountant knows anything next week, although if I need one of those LEI numbers I might be a little bit late already...

[chucklebutty]

I've seen some articles quite generic about the subject. It seems that one was create a few years ago comparing it to the current investing framework at the time, but it doesn't seem to go to much in specifics about what type of companies or financial instruments are affected either.

I'll see if my accountant knows anything next week, although if I need one of those LEI numbers I might be a little bit late already...

Any investor in MiFID products such as EU listed equities needs a LEI to acquire/dispose from 3rd Jan. Handily the cost of a LEI recently halved as Bloomberg began issuing them. In theory they need an annual renewal (at a cost) but in reality they persist with the entity and lapse - the bank can still report against a lapsed LEI.

Gets a bit more complicated if you deal in any derivatives though...EMIR regulation kicks in and the EU investing entity itself has a reporting obligation and there, the LEI must be current.

FYI there are some delays getting one currently, taking about a week to get one through Bloomberg I hear and probably similar times through the LSE and GMEI folk...bit of a late rush on.

[mickael28]

Any investor in MiFID products such as EU listed equities needs a LEI to acquire/dispose from 3rd Jan. Handily the cost of a LEI recently halved as Bloomberg began issuing them. In theory they need an annual renewal (at a cost) but in reality they persist with the entity and lapse - the bank can still report against a lapsed LEI.

Gets a bit more complicated if you deal in any derivatives though...EMIR regulation kicks in and the EU investing entity itself has a reporting obligation and there, the LEI must be current.

FYI there are some delays getting one currently, taking about a week to get one through Bloomberg I hear and probably similar times through the LSE and GMEI folk...bit of a late rush on.

I was mainly investing in US stocks at present with some futures every now and then. It seems then that if I trade on EU stocks or futures I would need this LEI number, but do you know if one is required to trade in US instruments only?

[chucklebutty]

I was mainly investing in US stocks at present with some futures every now and then. It seems then that if I trade on EU stocks or futures I would need this LEI number, but do you know if one is required to trade in US instruments only?

As long as they are not EU dual-listed you should have no need of a LEI. However it's harder for banks to screen the list of non-MiFID vs MiFID products per client than to just ask for a LEI. So they just ask.

[mickael28]

As long as they are not EU dual-listed you should have no need of a LEI. However it's harder for banks to screen the list of non-MiFID vs MiFID products per client than to just ask for a LEI. So they just ask.

Thanks for the info mate. I think this doesn't really apply to our kind of ltd company where we are investing some surplus funds only. I've read several articles where they refer to these rules applying to 'investment firms', which ours wouldn't really be.

Other articles were saying that there were just like 500K-800K (I can't remember the figure I read last week) of legal entities that were registered worldwide, so that number seems just too low if this was a general law that was going to apply to every single company that invested in shares. Although a lot of us might just not know yet.

I am thinking about maybe just leaving it until the law comes into place and see what happens, see what one can trade without such a number and if I want to buy or sell something at the time and I cannot do it, I can always hedge with some CFDs or Spread Betting.

[chucklebutty]

Thanks for the info mate. I think this doesn't really apply to our kind of ltd company where we are investing some surplus funds only. I've read several articles where they refer to these rules applying to 'investment firms', which ours wouldn't really be.

Other articles were saying that there were just like 500K-800K (I can't remember the figure I read last week) of legal entities that were registered worldwide, so that number seems just too low if this was a general law that was going to apply to every single company that invested in shares. Although a lot of us might just not know yet.

I am thinking about maybe just leaving it until the law comes into place and see what happens, see what one can trade without such a number and if I want to buy or sell something at the time and I cannot do it, I can always hedge with some CFDs or Spread Betting.

The banks, as Investment Firms, will need your Ltd Co LEI if you want to trade an eligible product. The purpose of MiFID reporting is to ensure fair and orderly EU markets, if the CFDs or spread bets are based on EU listed instruments or indeed are listed as products on venues themselves then they are reportable too. The regulators are aware that market manipulation by sophisticated means e.g. derivs is possible so they have those products covered too.

I'd say that as long as you are not acquiring/disposing imminently then you can hold off and miss the rush. However if your assets become distressed then you may not be able to exit a position until the LEI is obtained.

The LEI stats are here: https://www.gleif.org/en/lei-data/gl...ei-statistics#

Big uptake since October...prior to that it was only c550k in existence and 32% were lapsed already...

[mickael28]

Sorry, I meant I could always hedge the opened positions if I cannot liquidate them due to the lack of LEI number via a personal account, where I think brokers will just require our NI/passport information to allow us to trade (which they might even already have when we opened the account).

... will need your Ltd Co LEI if you want to trade an eligible product.

I think that was my main doubt, I'm still not sure if just trading in US stocks my Ltd company will be affected by this EU regulation. I'd say most of my issues are not dual-listed here either. But it seems like you mentioned above, my broker just sent me a couple of emails now saying that my account will be affected by the regulation and they could prevent me from trading or even liquidate positions in the account if I don't provide them with the LEI number.

The cost is negligible, so it's more a matter of who really need it or to trade what instruments exactly. What I am finding strange is that just ~1 million of worldwide companies have one if it's really need it to trade as my broker is stating... :S