With no further extension of relief by the Australian Securities and Investments Commission (ASIC) in sight, the 30 September deadline for legal entities, including self-managed superannuation funds (SMSFs), to obtain a Legal Entity Identifier (LEI) is fast approaching.
“From 1 October, a range of Australian financial services entities – including funds, brokers/traders as well as trustees of SMSFs – will be unable to transact non-exchange traded instruments such as CFDs and FX if they don’t have a LEI,” said Mr Chris Donohoe, chief executive officer with financial services infrastructure provider APIR.
“A LEI is a 20 character alpha-numeric code that enables identification of legal entities participating in certain financial transactions. Obtaining a LEI is a one off exercise, and once a SMSF obtains an LEI, the identifier stays with it for the entirely of its existence.
“We have experienced a noticeable spike in applications for LEIs in recent weeks as the latest deadline approaches – which was also the case when previous deadlines have loomed.
“Although ASIC has extended relief on this deadline in the past, we don’t believe that another extension is likely,” Mr Donohoe said.
Mr Donohoe said the LEI requirement is the latest in the financial services industry’s inevitable move to global regulatory harmony, and that increasingly rules and regulations in one jurisdiction are having an impact on financial services markets in other jurisdictions.
“In recent years, we have witnessed an evolution in the way coding systems are used in the financial services industry. Once seen as a useful way to categorise and monitor financial products, they are now an integral part of the compliance system. As global regulatory harmony increases, and cross border investing is facilitated, common standards and language need to be in place internationally for the system to work. The requirement for LEI registration is the latest example of this,” he said.
APIR Systems is a provider of essential infrastructure for the wealth management industry in Australia, including acting as an official registration agent for the issuance of LEIs.
In all, some A$3 trillion worth of investments are transacted, managed and administered by service providers that codes issued by APIR. It is also the issuer of ISIN (International Securities Identification Numbers) for unlisted managed investment schemes and superannuation funds.
https://www.adviservoice.com.au/2019/09/30-september-lei-deadline-looms-for-smsfs/