On 3 January 2018, EU Directive 'MIFID II' will come into force, introducing a new requirement for certain entities (including charities and trusts) to acquire a Legal Entity Identifier ("LEI") number from the London Stock Exchange (LSE) in order to continue to invest and trade in the UK financial markets from that date onwards.

LEIs have been created to try and create a global reference data system that uniquely identifies every legal entity that is party to a financial transaction and, although no common entity ID convention exists in the market today, a range of regulatory initiatives are driving the creation of universal LEI standard for financial markets.

Legal entities that require an LEI include trusts (but not bare trusts), companies (public and private), pension funds (but not SIPPs), charities and unincorporated bodies that are parties to financial transactions.

The legal entity itself is ultimately responsible for obtaining the LEI, but some investment firms may agree to apply for the LEI on behalf of their clients. Trustees with investment portfolios should be alert to this new requirement and should take steps to obtain their LEIs as soon as possible. Without an LEI, trustees will not be able to invest in the UK or EU capital markets from January 2018.