Legal Entity Identifiers for Funds & Trusts

Legal Entity Identifiers for Funds & Trusts

If you are are currently managing or own a fund or a trust, you will more than likely be required to obtain a Legal Entity Identifier (LEI). ​​

A Legal Entity Identifier (LEI) is a 20 digit code that is unique to a legal entity and provides basic information about the entity such as name, address and entity type e.g Limited Company. We explore this further in our recent post What is the Legal Entity Identifier?

LEIs are required by any legal entity that is involved with financial transactions or operating within today's financial system. This applies in particular with regard the EU and the US. There are a number of mandates currently in existence which state "no LEI, no trade" meaning both reporting parties and traders require an LEI such as Mifid II. To see a comprehensive outline of the regulatory use of the LEI please see our recent post on the matter.

Funds and Trusts are examples of legal entities which generally require an LEI for reporting and regulatory purposes.

LEIs for Funds

​Funds and investment funds have been re-examined since the financial crisis a few years back. The EU and US have introduced a litany of regulations such as the US Dodd-Frank Act Title IV, and the European Union Directive on Alternative Investment Fund Managers (AIFM). These aim to improve reporting practices and fund regulations. 

There are numerous types of funds and sub-funds, all of which can be considered a legal entity. So, in theory if you have an umbrella structured fund with many sub-funds (segregated or non-segregated) they would require LEIs each, not just the parent entity. Investment managers or brokers involved in any trading will also require an LEI. This is why the LEI is so effective at mapping out the while financial ecosystem and gives us transparency the likes of which other identifiers have not been able to.

Once you have determined that your fund or reporting party requires an LEI you can proceed to the registration. Simply fill out the required data, and under 'Entity Form' select the option 'FUND'.

In summary, whether you are operating a self-managed fund, or it is being managed by a fund manager the fund and counterparty would need an LEI regardless. Initially there was some grey area around the LEI requirement for fund structures, and different classes of funds, but it is expected that in the future all funds will require an LEI.
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​The Regulatory Oversight Committee (ROC) published their approval of of the use of LEIs and fund relationships in a publication which can be found here: https://www.leiroc.org/publications/gls/roc_20190520-1.pdf

LEIs for Trusts

Trusts are also considered a form of 'legal entity' which are required by regulation to obtain an LEI Code since January 2018.

A trust is an arrangement whereby a person (a trustee) holds property as its nominal owner for the good of one or more beneficiaries. This property is stored in a special purpose vehicle and is considered to be a legal entity. 

Currently, trustees who may be using capital markets in relation to trust funds will be required to apply for an LEI Code on behalf of the trust. With the exception of bare trusts, any trust taking part in transactions will require an LEI. 

For example, when a trust is investing directly in collectives and is participating in the financial transaction, the trustees will need to provide the LEI. To summarise, when a trust is investing directly in collectives an LEI will be required.
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When it comes to applying for the LEI you may be requested to provide proof of existence by providing a deed, unless it is a discretionary trust. To find out what other documents may be requested please see our guide to LEI documentation here.

In order to apply for a Legal Entity Identifier please click here: Register New LEI