December 20, 2017 / 9:08 AM / in 2 months

EU markets watchdog offers grace period for new trading identifier

LONDON, Dec 20 (Reuters) - The European Union’s markets watchdog has given banks a six-month grace period regarding a requirement from January that all parties to a financial trade must have a unique reference number to help regulators spot abuses.

New EU securities rules, known as MiFID II, come into force on January 3 and require everyone involved in a transaction to have a “legal entity identifier” or LEI in order to report the trades to regulators.

Many customers of banks have yet to obtain one, which would make it impossible to execute a trade.

The European Securities and Markets Authority said on Wednesday that banks could apply for an LEI on behalf of customers. Trading venues could also use their own LEI codes for non-EU issuers that currently don’t have one.

MiFID II has already been postponed by a year but many smaller market participants have still found it too complex to comply in time.

Reporting by Huw Jones, editing by Louise Heavens

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