LEIs for Pension Schemes & FundsHow to obtain a Legal Entity Identifier (LEI) for a Pension Scheme
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Legal Entity Identifiers for Pension Schemes
On the 3rd of January Markets in Financial Instruments 2 (MiFID 2) regulation came into force. MiFID is an EU regulation concerning entities working within the boundaries of financial instruments.
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This includes pensions schemes and pension funds. The LEI requirement is also extended to all entities trading within the boundaries of financial instruments or trading stock/debt including equities, bonds, trusts all financial intermediaries, entities listed on an exchange.
This also includes investment funds, as well as their umbrella structures, transaction counterparties and holding companies. If the entity is listed under the category “trading listed securities”, as pension schemes often are, they will be required to report an LEI. |
You can find out more about who exactly needs an LEI and under what regulation in our recent post Who Needs an LEI?
Why does a Pension Scheme need an LEI
The LEI is an ISO standard (ISO 17442) which was initially endorsed by the G20 Summit and implemented by the Financial Stability Board (FSB).
LEI Codes are used to identify market participants in financial transactions. It is a standardized identifier which streamlines the entity identification process, on a global scale.
LEI Codes are used to identify market participants in financial transactions. It is a standardized identifier which streamlines the entity identification process, on a global scale.
Related Post: What is an LEI?
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This enables authorities and regulators to monitor and analyse vast amounts of accurate data about who is engaging in market activity. This allows for more efficient methods of preventing market abuse and reduces systemic risk.
When a pension scheme obtains an LEI Code, the LEI will be used to identify the pension schemes in various investment activities (e.g equities/bonds). Investment managers will include the LEIs in transaction reports when executing trades on behalf of the pension scheme, fund or SSAS. The LEI will need to be included in every transaction conducted |
It is worth noting that a pension schemes LEI is permanent and once it has obtained an LEI it will maintain that LEI by renewing it annually. This helps to ensure the data is consistent and up to date, as regulators rely on it for an accurate assessment of the marketplace.
Not having an LEI can result in blocked trades as most investment providers no longer accept national insurance numbers as an acceptable identifier.
If a pension scheme does not currently have an LEI where one is required, trades may be delayed until one is obtained and it may cause complications with the investment service provider
Usually investment manager or advisor will assist trustees in applying for an LEI. This is because if there is no LEI for a pension scheme the investment manager will not be able to engage in market activity or conduct trades on the trustees behalf.
Trustees of UK Pension schemes requiring ESG Templates under the direction of the PLSA are required to report a Legal Entity Identifier.
Other similar categories of legal entities which are eligible to obtain an LEI include trust funds, pension funds and charities.
You can apply for an LEI for any type of entity by clicking here or the register LEI button on the top of this page.
Not having an LEI can result in blocked trades as most investment providers no longer accept national insurance numbers as an acceptable identifier.
If a pension scheme does not currently have an LEI where one is required, trades may be delayed until one is obtained and it may cause complications with the investment service provider
Usually investment manager or advisor will assist trustees in applying for an LEI. This is because if there is no LEI for a pension scheme the investment manager will not be able to engage in market activity or conduct trades on the trustees behalf.
Trustees of UK Pension schemes requiring ESG Templates under the direction of the PLSA are required to report a Legal Entity Identifier.
Other similar categories of legal entities which are eligible to obtain an LEI include trust funds, pension funds and charities.
You can apply for an LEI for any type of entity by clicking here or the register LEI button on the top of this page.
Do SSAS & Sipp Pension Schemes need an LEI
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There has been some questions raised around this matter. There is a grey area here, where it is not clear whether a Sipp (Single Invested Personal Pensions) Pension Scheme is an actual legal entity.
However, they are listed as trading securities and fall under the scope of Mifid 2 so they are eligible to obtain LEIs, investment managers often insist on their clients providing LEIs. Sipp pension scheme trustees will often already have an LEI as they also fall under the EMIR Regulation, which also requires an LEI since 2014. |
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With the introduction of MiFID 2 in January 2018, small self administered schemes (SSAS) are also obligated to report an LEI, especially if intending to trade equities and bonds.
When the SSAS has obtained a Legal Entity Identifier they should provide it to their investment manager who will include it in the transaction reporting system.
According to the Financial Times “some investment managers have refused to accept their clients national insurance numbers for trades and ask instead for LEI codes under MiFID II”
When the SSAS has obtained a Legal Entity Identifier they should provide it to their investment manager who will include it in the transaction reporting system.
According to the Financial Times “some investment managers have refused to accept their clients national insurance numbers for trades and ask instead for LEI codes under MiFID II”
European Insurance and Occupational Pensions Authority (EIOPA)
The European Insurance and Occupational Pensions Authority (EIOPA) recently released their guidelines on the correct use of the Legal Entity Identifier which can be found here: EIOPA Guidelines
These EIOPA guidelines were issued to promote LEI usage as a method of identification for insurance and pension scheme undertakings.
EIOPA have stated that the use of the LEI allows for a common global identifier, which will improve data quality and allow for the automated data processing. It is believed that there exists no suitable, identifier options available in the pensions sector to date, as all other identifiers are either national or categorical rather than universal.
These EIOPA guidelines were issued to promote LEI usage as a method of identification for insurance and pension scheme undertakings.
EIOPA have stated that the use of the LEI allows for a common global identifier, which will improve data quality and allow for the automated data processing. It is believed that there exists no suitable, identifier options available in the pensions sector to date, as all other identifiers are either national or categorical rather than universal.
How to get an LEI for a Pension Scheme, Pension Fund, SSAS or Sipp
The application process for a Legal Entity Identifier is simple. The LEI application form only takes a few minutes and any representative of the pension scheme (e.g investment manager) may apply on behalf of the entity.
Step 1: Click the Register New LEI button or here
Step 2: Complete the 5 minute application form, select ‘Other’ under entity type.
Step 3: Proceed to checkout and select your package.
Step 4: Await for the LEI to be validated.
Step 5: You will receive confirmation via email and your LEI will be publish to the LEI index.
Step 2: Complete the 5 minute application form, select ‘Other’ under entity type.
Step 3: Proceed to checkout and select your package.
Step 4: Await for the LEI to be validated.
Step 5: You will receive confirmation via email and your LEI will be publish to the LEI index.
LEI Worldwide use the payments provider STRIPE and PayPal. We also offer the ability to complete a bank transfer or swift payment in any currency including US Dollars.
A member of the LEI Worldwide team will review the submission upon completion and you will receive your LEI code within a few hours.
If you have any questions please contact [email protected]
A member of the LEI Worldwide team will review the submission upon completion and you will receive your LEI code within a few hours.
If you have any questions please contact [email protected]
To apply for your own LEI or on behalf of a legal entity, please select the option from the buttons below.
