Legal Entity Identifier (LEI)
The International ISO standard 17442. LEIs are identification codes that enable consistent and accurate identification of all legal entities that are parties to financial transactions, including non-financial institutions.
ESMA - European Securities and Markets Authority.
Founded in 2009, ESMA is charged with safeguarding the stability of the European Union's financial system by enhancing the protection of investors and promoting stable and orderly financial markets.
Lapsed LEI
All LEI records should be renewed annually, this process ensures that the data associated with the record remains accurate and trustworthy.
LEI records which are not renewed annually become lapsed.
MiFID 2 - Markets in Financial Instruments Directive 2
Markets in Financial Instruments Directive II (MiFID II) is a principles-based directive issued by the EU which is came into force in early January 2018. It is much broader than MiFID, which was introduced in 2007, and aims to improve the competitiveness of European markets by creating a single market for investment services and activities, and ensuring harmonised protection for investors in financial instruments.
Local Operating Unit (LOU)
Organisation managing the issuing of LEI codes as authorised by the Global LEI foundation.
LEI Level One Data
Level 1 data represents the basic information that identifies the legal entity e.g. entity name and registered address.
LEI Level Two Data
LEI Level 2 data captures data relating to the ownership of the registering entity.
MiFIR - Markets in Financial Instruments Regulation
MiFIR are the accompany regulations to MiFID 2 and have been designed to improve disclosure of trade data to the competent authorities in the EEA.
MiFIR requirements are designed in relation to the disclosure of trade data to the public and competent authorities. MiFIR will replace the existing MiFID transaction reporting requirements and came into force in January 2018.
As MiFIR is an EU regulation, the monitoring and the publication of information will be undertaken by the European Securities and Markets Authority (“ESMA”).
Legal Entity
An individual, company, or organisation that has legal rights and obligations. Legal entities can be classed into 2 broad categories human and non-human, with the former often referred to as ‘natural persons’.
Example legal entities which can hold a LEI number include limited companies, funds, trusts, charities and pension schemes.
EMIR
European Market Infrastructure Regulation is a European regulation covering derivatives. The purpose of EMIR is to monitor risks and exposures which exist in the financial system.
EMIR is similar to the Dodd-Frank laws, these regulations require the reporting of derivatives and mandate the use of LEI numbers.
EMIR came into force in late 2012.
Financial Stability Board
Established after the 2008 financial crash, the Financial Stability Board (FSB) monitors and makes recommendations about the global financial system.
SFTR
Securities Financing Transactions Regulation is due to come into force from April 2020, and has a number of similarities with the existing EMIR legislation. SFTR is designed to monitor risks relating to securities financing transactions.