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European regulations to impact SMSF transactions

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Miranda Brownlee
06 December 2017 — 1 minute read

SMSFs planning to transact with European counterparties after 3 January have been warned they may not be able to do so without a legal entity identifier code under new European regulations.

The European Securities and Markets Authority website explains that a legal entity identifier (LEI) is a 20 digit, alpha-numeric code that enables identification of legal entities participating in financial transactions.

According to the Financial Conduct Authority in the UK, from 3 January 2018 firms subject to the new Markets in Financial Instruments Directive (MiFID) II transaction reporting obligations will not be able to execute a trade on behalf of a client who is eligible for a Legal Entity Identifier (LEI) and does not have one.


APIR Systems chief executive Chris Donohoe said that Australian financial services entities including funds, brokers, traders and trustees of self-managed superannuation funds may therefore be unable to transact with European counterparties from 3 January 2018 if they don’t yet have a LEI code.

“There is a still a large number of LEIs that need to be acquired by Australian financial entities that transact with European counterparties before the go-live of the new Markets in Financial Instruments Directive (MiFID II) reporting regime on 3 January 2018,” he said.

“The European Securities and Markets Authority (ESMA) has stated that firms should not trade with counterparties that do not have an LEI as they will not be able to submit valid transaction reports, and overseas parties take this requirement very seriously,” Mr Donohoe said.

The potential impact of these new regulations is still not fully understood by some financial services participants in Australia, he said.

“While MiFID II does not directly regulate Australian entities, it can affect them,” he warned.

Miranda Brownlee

Miranda Brownlee


Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

European regulations to impact SMSF transactions
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