Why do I need LEI and what purpose does it serve?
Under Regulation EMIR (European Parliament and Council (EU) no. 648/2012 on OTC derivatives, counterparties and trade repositories) one is obliged to have LEI. EMIR makes it obligatory for all financial and non-financial counterparties to report all closed derivate transactions and any possible changes to trade repositories (ROU). The report must be submitted no later than the following work day after the transactions was closed. In order to report it is essential that each legal entity is assigned a so-called LEI, which identifies the given entity. This is a unique 20 digit alphanumeric identifier for legal entities, which enables the correct reporting of derivative trades. I tis assigned according to the ISO 17442 standard „Financialo Services – Legal Entity Identifier (LEI)“. Each LEI is assigned to only one entity Worldwide.
How do I apply for my LEI?
An automated check of the entered data will run after the form has been submitted. When the form is submitted successfully the client receives instructions how to make the payment for obtaining LEI, including the variable symbol. After the fee has been paid, LEI will be issued in accordance with ISO 17442. The authorised person will receive the information about the issued LEI electronically together with the invoice for the payment.
Prolongation of the validity of your LEI
The validity of LEI is one year. The client will receive a notification from CDCP asking to pay the yearly fee (together with a new invoice) 4 weeks prior to the expiration date.
The process of issuing LEI is a non-profit activity; it only serves to cover the costs associated with its operation and implementation. It is possible to pay in CZK or EURO. The fee for issuing LEI is 1875 CZK (70 EURO), the yearly fee is 1375 CZK (50 EURO). Any changes in the submitted data are free of charge. In case the fee is not paid the LEI will be invalidated and it will no longer be possible to use it in reporting.
The client states if he entrusts or doesn’t entrust the Company with reporting to ROU regarding closed, modified or finished Forward Trades prior to signing the contract (RS IS). (The client ticks EMIR yes/no in the RS). For clients it is always advantageous if the Company performs the reporting on their behalf. Reporting is free of charge.
The Company reports on behalf of the Client (EMIR yes)
This authorization can only be issued in relation to all forward trades closed between the Client and the Company as of the date of authorization. Details can be found in the VOP. The Client passes on his LEI to the Company when signing the contract (RS IS), no later than 14 days after the first forward trade had been closed. Closing of forward trades is conditioned by supplying the LEI to the Company. If the client chooses the Company to do the reporting for him and does not supply its LEI, the Client is asked to do so. If the Client does not supply its LEI within the 14 days after closing the first forward trade, no more Forward trades are closed with the client.
The Client performs his own reporting (EMIR no)
By choosing this option, the Client does not authorize the Company to perform the reporting and does so by himself. The Client is in any case obliged to supply its LEI to the Company. In this case the Client is obliged to report its trades by himself directly to ROU. Fees related to direct reporting are 3800 Euro (estimated amount) which includes registration of the reporting entity. This does not deprive the Client of the obligation to register its LEI (see above). Reporting is a structured form based on set rules and is performed in CSV format. It is a very detailed table, which includes dozens of columns.