Deadline for charities to obtain a Legal Entity Identifier
If your charity invests and trades on the financial markets in the UK you will need to apply for a Legal Entity Identifier (LEI) now, says HWB’s charity specialist Michaela Johns.
All trusts and charities that are parties to financial transactions will need an LEI – a unique 20-character alphanumeric code that identifies distinct legal entities, this covers charities that engage in financial transactions, including transactions in listed investments.
The new regulations are part of the European Markets in Financial Instruments Directive (MiFID II) which came into effect on 3 January 2018. Shares, corporate bonds, structured products, exchange traded instruments and venture capital trusts, are some, but not all, of the financial instruments subject to the regulation under MiFID II.
Michaela, Director at HWB who heads the not-for-profit team, says: “These new rules are aimed at making financial markets clearer and safer for everyone, but it’s important to act now in order to comply.
“Every charity will need to inform their financial services provider of their LEI otherwise they will not be able to execute transactions on their behalf.”
The unique LEI code is included in a global data system and enables every legal entity or structure that is a party to a relevant financial transaction to be identified in any jurisdiction.
LEI numbers are available from bodies endorsed by the Legal Entity Identifier Regulatory Oversight Committee (LEIROC) as an authorised local operating unit for the global allocation of LEI numbers. There is a fee for obtaining an LEI – generally in the region of £150.
For further details on how to apply visit the Financial Conduct Authority’s website www.fca.org. uk/markets/mifid-ii/legal-entity-identifier-lei-update or speak with your financial adviser.
For an informal discussion on the changes and how to achieve compliance, call Michaela Johns on 023 8046 1256.