Corporate clients need an LEI code

As a part of the MiFID II regulation taking effect next year a great number of corporate clients will need to obtain a Legal Entity Identifier (LEI) code in order to be able to trade securities after January 3, 2018.

What is an LEI and who needs it?

Any legal entity that wants to place an order in financial instruments needs a LEI code. The Legal Entity Identifier (LEI) is a reference number to uniquely identify parties in financial transactions worldwide, throughout all markets and legal systems. The LEI code is initially used for the Trade Repository reporting requirement in EMIR, but will in the future also be required in other regulatory reporting, e.g. for MiFID II etc. LEI codes are required for all legal entities:

  • trading derivatives (except for private individuals)
  • trading equity or debt (except for private individuals)
  • issuing equity, debt and all entities listed on an exchange
  • supervised by a financial regulator and their affiliates, subsidiaries and holding companies.

From November 1, 2017 all legal entities trading or intending to trade derivatives will need to obtain a LEI code in order to engage in any further derivative trades.

From January 3, 2018, MiFID II requires that all legal entities trading or intending to trade financial instruments which are traded or which underlying assets are traded on a trading venue to have LEI.

Unless corporate clients have acquired and informed Nordea about a valid LEI code well before these deadlines, corporate clients will not be able to be able to trade these financial instruments.

What does Nordea advise corporate clients to do, in order to be able to continue to trade?

  1. If corporate clients don’t have a LEI code, they need to acquire an LEI code from one of the official LEI Codes issuers.
  2. When the LEI code has been issued, corporate clients must submitOpens new window their LEI code to Nordea.
  3. Once Nordea has validated and registered the LEI code, corporate clients can continue to trade financial products.

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