MiFID II – Legal Entity Identifiers

MiFID II (The second Markets in Financial Instruments Directive) is the EU legislation that regulates firms who provide services to clients linked to ‘financial instruments’ (shares, bonds, units in collective investment schemes and derivatives), and the venues where those instruments are traded.

The original directive, MiFID, was applied in the UK from November 2007, but is now being revised to improve the functioning of financial markets in light of the financial crisis and to strengthen investor protection.

The changes are currently set to take effect from 3 January 2018, with the new legislation being known as MiFID II – this includes a revised MiFID and a new Markets in Financial Instruments Regulation (MiFIR).

We are working to ensure that the transition to the new regulations takes place as smoothly as possible.

For some clients this will require your help to ensure we fully comply with the regulations.

What do I need to do?

As a company, charity, or trust client you will be required under the MiFID II legislation to apply for a code called a ‘Legal Entity Identifier’. You will not be able to trade without these post 3 January 2018, so it is essential that these are set in place, whenever necessary.

How will it affect me?

We have summarised below how this specific change will affect you and what you need to do ahead of its introduction. If you have an LEI, please contact us now with the details, or we will be writing to you in due course to assist you with obtaining an LEI.

For individuals your National Insurance number will be used as the identifier.

Entities such as companies, charities, and trusts are required to have a Legal Entity Identifier (LEI). LEIs are unique, 20 character alphanumeric identifiers for legal entities or structures that will create a global reference data system that will uniquely identify every legal entity or structure that is party to a financial transaction.

How do I obtain an LEI?

To obtain one, the entity must provide the following information;
• Entity name & legal form
• Headquarters address
• Legal formation address
• Business registry
• Related identifiers

The deadline for obtaining an LEI is 3 January 2018, and we will be unable to deal for entities from this date without one.

We have therefore launched a service to assist clients to obtain an LEI. If you are a client and believe you or your organisation will require an LEI, please contact your Investment Manager.

Other MiFID changes

Another requirement of MiFID II is that we provide valuations on a quarterly basis. In addition to this, whilst an unusual event, if the performance of a portfolio decreases by 10% or more during a quarter, we will notify you promptly of this.

As part of the recent revision of our Terms of Business, we have addressed the forthcoming regulatory changes and changes to our Order Execution Policy or other information will be updated on our website, www.whirelandwm.com.