What is a LEI?
LEI is short for Legal Entity Identifier. It is a standardised code of 20 characters consisting of digits and letters. The LEI code makes it possible clearly and unambiguously to identify companies on a global scale.
Why do I need a LEI and why send it to Jyske Bank?
Due to new EU regulation (upon request from the G20 countries) we must as of 3 January 2018 report relevant information about all transactions involving financial instruments. Such reporting must, among other things, include a LEI and must ensure that supervisory authorities can monitor financial transactions and help prevent financial crises, secure economic growth and disclose financial crime.
What are OTC derivatives?
OTC derivatives may for instance be interest-rate swaps, currency swaps or forward contracts. The rules on LEIs also apply to OTC derivatives (derivatives traded in some context other than on a formal exchange) and will commence already on 1 November 2017 since they are subject to the EMIR regulation and not MiFID like the other rules. The LEI must be registered with Jyske Bank on 27 October 2017 so that trading in OTC derivatives can be made as at 1 November.
Do the rules apply to buying as well as selling financial instruments?
Yes, the rules apply to buying and selling financial instruments irrespective of the size of the amount.
Do the rules also apply to single proprietorships?
No, the Danish FSA has recently decided that the LEI requirement does not apply to sole proprietorships trading in securities. However, the requirement still applies to trading in OTC derivatives.
Does the requirement apply if I use the Danish Business Taxation Scheme (virksomhedsskatteordningen)?
It is of no importance which tax scheme you use. It is the corporate form which decides whether the LEI requirement applies. Thus, a sole proprietorship applying the Danish Business Taxation Scheme is exempt from the LEI requirement when trading in securities.
Where do I get a LEI?
You may order the LEI from several issuers. NordLEI and FinReg (https://www.leinummer.dk) offers a Danish website and Danish support. Also, they offer to expand the validity period so you may already now apply for a LEI which is valid for full 2018, without additional costs by using this Jyske Bank campaign code "JyskeLei2018”. The full list of issuers appears from www.gleif.org.
What happens if I do not have a LEI on 3 January 2018?
If you have not obtained a LEI, or if it has not yet been registered with Jyske Bank, you cannot trade financial instruments. It is a demand that the LEI has been registered with Jyske Bank before you can trade.
When is the deadline for ordering a LEI if I must receive it before 3 January 2018?
The deadline of several LEI issuers for ordering a LEI is 30 September 2017 if you want to receive the LEI before 3 January 2018.
What is the price of a LEI?
The price varies from issuer to issuer and is adjusted on an ongoing basis. Further information about the fees of the individual LEI issuers appears from their websites.
Where to get help?
If you need help to determine whether you are subject to the rules on LEIs, please contact your accountant.
If you need help to apply for LEIs, the websites of most issuers of LEIs have instructions. If you want a Danish website and Danish support, it is a good idea to use NordLEI.
Does the LEI requirement apply to corporate actions?
The LEI requirement also applies to corporate actions if a questionnaire is used. Mandatory corporate actions are not subject to the LEI requirement.