LEIs for Funds and Trusts

Legal Entity Identifiers for Funds & Trusts

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. Pension Schemes and Pension Funds are also required to report an LEI under MiFID 2.

From March 1st, 2022 complex fund structures will be required to report the structure within their LEI under new guidance from LEI ROC. You can find out more about the new Fund LEI reporting requirements here.

LEIs for Funds

A fund is considered a Legal Entity and financial instrument which falls under the category of requiring an LEI. Regulatory requirements around fund administration and investment funds have been re-examined since the financial crisis a few years back. The EU and US have introduced a litany of new transparency driven 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, and ultimately transparency and visibility over the entire financial system. Luxembourg, a small country but being one of the largest fund administration centres in the world, has registered nearly 5% of the worlds LEIs in response to these regulations. These regulations were introduced not only for funds, but also other capital market activities such as securities trading with regulations such as CSDR, SFTR & SRD II. LEI fund registration activity mostly falls under the European Mifid 2 regulation.

The one thing all of these regulations have in common, is that they all require participating legal entities to have an LEI code.

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.

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

2022 Updated LEI Policies for Funds, Investment Funds and Hedge Funds

LEI Guidelines have been updated with regards to reporting Funds and their structures. The Fund type will now be reported under the follwing There are three types of Funds:
1. A Managed Fund – This is a regular Fund (e.g UCITS) that is not considered a sub-fund or subsidiary of a fund.2. A Sub-Fund of an Umbrella Fund - This entity type of fund relates to sub-funds that are part of an overall umbrella fund.
3. Feeder Fund, Umbrella Fund or a Master Fund - This entity type relates to funds which feed their investments through another vehicle of fund type.

The fund management relationships are also now required under policy in order to bring transparency around funds and their overall structures.

Fund Management Entity: This the fund or entity that is the primary fund management company or ManCo as it is often referred. The ManCo may be a special fund management company, a law firm or it may be the fund itself if it is a self managed fund.
Master Fund or Master Feeder: This is where the feeder fund is invested into another fund or multiple other funds. If a master fund exists it will need to be reported within the LEI. This is only required where the master fund is legally reported in the fund documentation (e.g prospectus).
Umbrella Fund: An umbrella fund is a legal entity with multiple sub-funds where each sub-fund invests with different strategies. This can be investment into different asset classes, types of assets or companies. The Umbrella fund shall be reported with the registration of an LEI including its sub-funds or compartments.
Start Date of the relationship between funds, sub-funds and master funds shall be reported within the LEI records.

A Management Company (ManCo) to a fund must first obtain an LEI before the Fund obtains its LEI, unless this is a Self Managed Fund.

LEIs for Trusts

Does a trust need an LEI? Trusts are also considered a form of 'legal entity' which are required by regulation to obtain an LEI Code since January 2018. Getting a Legal Entity Identifier for a trust is just as simple as registering an LEI for a fund. Just choose 'Trust' in the entity type box of the LEI Registration form, whether it is a trust fund, a discretionary trust or a bare trust.

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. However bare trusts may still apply for an LEI Code.

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. The person responsible for the trust fund management is usually applied for the LEI on behalf of the trustee. The LEI is required by the trust fund manager because when a trust is investing directly in collectives, an LEI will be requested.

LEI for trusts: 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.

How to get a Legal Entity Identifier for a Fund or a Trust

Obtaining a Legal Entity Identifier code for a fund or trust is a simple process. The LEI application form only takes a few minutes and any representative of the entity may apply on behalf of the entity including the investment or portfolio manager.

Step 1. Click on the 'Register New LEI' button here or on the homepage of this website. To begin, fill out your contact details as the applicant. This information will be used to contact you in case any additional information is required.

Step 2. Next, begin filling out the details of the entity which requires an LEI. This will include information such as the address, name of Director or person legally responsible for the entity such as CEO, or Owner.

Step 3. The next section 'Level 2 Data' gives you the opportunity to report parent company information.

For example, if your fund has sub-funds or its parent is of a larger structure, you may have that information appear on the LEI record. However, this is not a legal obligation. If you wish to report a legal parent, please note that you will be requested to provide evidence of this relationship by way of Consolidated Accounts (i.e an annual report).

You may only report parent information if the parent company consolidates the accounts and the subsidiary is listed there.

Step 4. Finally, upload documentation relevant to your application. For a trust this could be the deed, or registration certifications for a fund. The data is cross matched with what is on the relevant document. For example, the deed to the Trust or fund registration papers.

If however the company cannot be found, or the data does not match the registry, we may request that you provide supporting documentation. Some good examples include a Certificate of Incumbency, Register of Directors, trust or a registry extract.

Once the application is submitted, simply choose your preferred payment method and complete the application. LEI Worldwide use our 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]

To apply for your own LEI or on behalf of a legal entity, please select the option from the buttons below.