Summary: The London Stock Exchange published two notices on 13 October 2017 which: (i) remind existing issuers whose securities are traded on the Main Market that they must register an LEI immediately if they missed the 1 October 2017 deadline; and (ii) confirm that issuers whose securities are traded on AIM or another MTF (multilateral trading facility) operated by the LSE must also register for an LEI by 30 November 2017.
What is an LEI?
An LEI is a 20-digit, alpha-numeric reference code that uniquely identifies a legal entity or structure (excluding branches and natural persons), in any jurisdiction, that is a party to a financial transaction. The Global LEI System is designed to create a global reference data system containing publicly available LEI data that connects to key reference information regarding a legal entity or structure. The creation of global, standardised LEIs, seeks to increase transparency and financial stability in the global marketplace.
Who is required to register an LEI?
Market operators such as the LSE are required to collate LEI codes for issuers (pursuant to The Markets in Financial Instruments Directive and the Market Abuse Regulation).
The LSE had already notified issuers on the Main Market that they are required, under DTR 6.2, to have an LEI as of 1 October 2017 in order to make valid regulatory announcements. DTR 6.2, which came into force on 1 October 2017, requires issuers that announce regulated information and file it with the FCA to, at the same time, provide a LEI to the FCA and classify the regulatory information being announced according to the classes and sub-classes set out in DTR 6, Annex 1R.
Regulated information which is filed with the FCA will be searchable through EEAP (the new web portal serving as an European access point to regulated information about all listed companies in the EU) and which is expected to become operational by 1 January 2018.
Market Notice N07/17: Requirement for issuer LEI codes re-states the requirement for issuers on the Main Market to have an LEI and reminds those that missed the 1 October 2017 deadline for registration that they must now register for an LEI immediately.
AIM Notice 47: Requirement for AIM company LEI codes confirms that issuers whose securities are traded on AIM or another MTF operated by the LSE are now also required to have an LEI – and must register for one by 30 November 2017. AIM companies will be required to specify their LEI when making an application for admission of any securities to trading on AIM.
How is an LEI obtained?
LEIs can be obtained from accredited Local Operating Units of the Global LEI Foundation (GLEIF), which are organisations authorised to issue LEIs and supply registration, renewal and other services, and include the LSE. A list of all such accredited Local Operating Units can be found on the GLEIF website (see: https://www.gleif.org/en/about-lei/introducing-the-legal-entity-identifier-lei).
Issuers should first register as a user on the LSE’s LEI platform, UnaVista, and then submit a request for an LEI (see: https://www.unavista.londonstockexchange.com/datasolutions/login.html).
Additional information, including a welcome pack, user guides, a help sheet and a list of FAQs, is available on the LSE’s website (see: https://www.lseg.com/LEI).
The LSE charges an initial allocation cost of £115 plus VAT. For firms who require a bulk allocation of more than 10 LEIs there is pricing based on economies of scale.
Requirements for new issuers
New issuers whose securities are proposed to be admitted to trading on the Main Market, AIM or an MTF operated by the LSE will be required to register for a LEI in conjunction with admission.
The application forms for admission have been amended accordingly and are available on the LSE’s website (see: http://www.londonstockexchange.com/companies-and-advisors/main-market/documents/publications.htm and http://www.londonstockexchange.com/companies-and-advisors/aim/publications/forms/forms.htm).
An LEI is required to be renewed annually and it is an issuer’s responsibility to ensure that this occurs. Issuers are required to contact their Local Operating Unit with updated information who, in turn, will re-verify the data.
The LSE offers an annual maintenance service at an annual cost of £70 plus VAT per LEI. The LSE’s portal will release an automated email reminder 30 days prior to the renewal date. However, with over 400,000 LEIs now in existence, the LSE has warned that the renewal process can take some time and GLEIF is actively encouraging firms to take action early.
Any LEI that is not re-verified within one year of its creation will become ‘lapsed’ – which could mean that reporting regimes are not complied with and potentially affect an organisation’s ability to trade.