EUROPEAN UNION: ESMA Keynote Address on MiFID II Implications for Asian Firms

Monday December 4 2017

Asian-headquartered firms with branches or subsidiaries providing investment services in the EU will be directly subject to the new MiFID requirements. But MiFID II obligations for Asia- based institutions are often indirect, arising by virtue of them dealing with European firms or counterparties on a cross border basis for example.

These Asia-based institutions may have to meet certain requirements to comply with MiFID II. For a start, Asia-based institutions will be asked to get a Legal Entity Identifier (LEI); a 20-digit, alpha-numeric code that enables clear and unique identification of legal entities participating in financial transactions.

From 3 January, under MiFID II/ MiFIR, no LEI means no trade.

The LEI will become applicable to:

• investment firms that execute transactions in financial instruments;
• the clients (buyer, seller) on whose behalf the investment firm executes transactions, when the client is a legal entity;
• the client of the firm on whose behalf the trading venue is reporting, when the client is a legal entity;
• the person who makes the decision to acquire the financial instrument, when this person is a legal entity
• the firm transmitting the order;
• the entity submitting a transaction report (i.e. trading venue, ARM, investment firm); and
• the issuer of any financial instrument listed and/or traded on a trading venue

Click on the above link for more information.