Asia’s financial markets are lagging behind America and Europe in the adoption by member firms of legal entity identifiers (LEIs) and could face disruption as new regulatory requirements come into force.
The warning comes from the Global Financial Markets Association (GFMA), the body representing the common interests of the world’s leading financial and capital market participants and its Asian member the Asia Securities Industry and Financial Markets Association (ASIFMA), the region’s leading financial trade association.
Both GFMA and ASIFMA are urging Asian market participants to obtain LEIs, concerned about the relatively slow take-up by firms in the region. They are concerned that impending deadlines for compliance with new regulatory requirements could mean the lack of LEIs causing market disruption
“The LEI system has substantial regulatory and operational benefits that contribute to effective reporting, transparency and risk management, and its creation was a key goal of the G-20’s response to the global financial crisis,” the two associations note.
“Acquiring LEIs will become even more critical come January 2018, when the European Union’s Markets in Financial Instruments Directive II (MiFID II) goes into effect,” added Mark Austen, chief executive officer (CEO) of GFMA and ASIFMA.
“MiFID II requires LEI reporting of all counterparties to trades in European markets. Failure to obtain an LEI will prevent firms from being able to comply, and regulators have been clear that firms without LEIs will not be able to complete trades. The slow uptake of the LEI system in Asia threatens to disrupt firms’ access to European markets.”
Both GFMA and its regional member trade associations have supported the adoption and promulgation of LEIs globally by stressing their utility and the benefits the system provides to both firms and regulators. GFMA remains committed to supporting the Global LEI system in close partnership with the Global LEI Foundation (GLEIF).
To help build awareness of the global LEI system and upcoming mandates, GFMA partnered with the GLEIF and member firm Thomson Reuters to provide a webinar to clarify the regulatory and operational benefits of LEIs as well as to help Asian market participants understand their reporting obligations under MiFID II. A link to the webinar may be accessed here.
ExxonMobil is legally challenging a $2m fine from the US Treasury for allegedly violating sanctions against Russia in 2014 while US Secretary of State Rex Tillerson was still overseeing the company.
Morgan Stanley is moving staff to Frankfurt in time for the March 2019 Brexit deadline.
The US bank, which already has 350 employees based in the city, will transfer some trading activities currently undertaken in London and create a further 150 to 250 jobs according to reports.
BNP Paribas is the latest in a long line of financial service companies to be penalised for misconduct during the financial crisis on both sides of the Atlantic.