What is changing?
Australian Securities and Investment Commission (ASIC) has introduced mandatory Legal Entity Identifier (LEI) requirements for all counterparties dealing in over-the-counter derivatives (e.g. commodity swaps or interest rate hedging) in Australia from 21 October 2024.
To comply, Rabobank require an LEI for all clients who undertake over-the-counter derivatives from 21 October 2024.
This page provides further detail regarding the LEI, as well as instructions on how you can obtain and provide your LEI to Rabobank, to ensure you’re able to continue to trade.
What is a Legal Entity Identifier (LEI)?
The Legal Entity Identifier (LEI) is a structured 20-digit alphanumerical code, used across markets and jurisdictions to uniquely identify a legally distinct entity that engages in a financial transaction. It works much like an ABN does domestically but is recognised by jurisdictions around the world.
The LEI captures not only the entities participating in the transaction, but also the details of any parent entities and ultimate parent ownership. In other words, ‘who is who’ and ‘who owns who’.
The LEI is a crucial data element that will enable regulators to oversee financial markets and monitor the stability of the financial system.
Should I obtain a Legal Entity Identifier (LEI)?
A Legal Entity Identifier (LEI) code should be obtained by clients that:
- Trade via a legal entity
- Take part in financial transactions; and
- Undertake over-the-counter derivative transactions.
All Rabobank Risk Management Facility (RMF) clients will require an LEI, i.e. the following business structures:
- Company
- Partnership
- Trust
- Joint
- Individuals acting in a business capacity (i.e. has an ABN)
Obtaining a Legal Entity Identifier (LEI)
The issuing of a Legal Entity Identifier (LEI) code is conducted under Global LEI Foundation (GLEIF) accredited Legal Operating Units (a.k.a. LEI Issuers). GLEIF was founded by the Financial Stability Board, which is an international body that monitors and makes recommendations about the global financial system.
A list of LEI Issuing organisations is made available through GLEIF. Start by heading to https://www.gleif.org/en/about-lei/get-an-lei-find-lei-issuing-organizations then search ‘LEI Issuing organisations per jurisdiction’ and contact your preferred LEI Issuer.
Click here for a non-exhaustive list of factors to consider when selecting your LEI Issuer.
Always ensure your LEI Issuer is duly accredited by GLEIF and are authorised to issue LEIs.
As a client, it will be your responsibility to obtain and maintain your LEI.
What does the Legal Entity Identifier (LEI) registration process look like
Each Legal Entity Identifier (LEI) Issuer has its own process but generally speaking it is a relatively fast and easy online application process, taking five steps to obtain an LEI.
- Choose an official LEI Issuer.
See ‘Obtaining a Legal Entity Identifier (LEI)’. - Register / create a profile.
Before starting an application, most LEI Issuers will require you to set up a profile, this will be used to start an application and manage your LEI. - Start the application & provide the required information.
This can include legal name, registered address, headquarters address, registration authority/number, entity type and legal form, in addition to other identifying data. - Pay the registration / application fee.
There is an initial registration / application fee which will be required to complete the application process. These charges are dependent on the LEI Issuer. - The LEI Issuer validates the information and completes the registration.
From the time you provide the required information and pay the initial registration fee it can take anywhere up to 1 – 5 business days to receive your LEI code. Note, this timeframe may be extended if there is a backlog of applications.
For more detail regarding this process click here.
Providing your Legal Entity Identifier (LEI) to Rabobank
From 1 March 2024, a Legal Entity identifier (LEI) code will be requested during the Risk Management Facility onboarding process.
Existing* clients will need to obtain and provide their LEI to Rabobank prior to 21 October 2024, to continue to trade over-the-counter derivatives.
Once you have your LEI, email Rabobank directly fm.au.LEIsubmission@rabobank.com with:
- Your Global Client Identification (GCID) number
Your GCID number is located on the letter sent to impacted clients or can be sourced via your Account Manager. - Your LEI code
Your LEI code will be provided by your preferred LEI Issuer.
* Rabobank clients with a Risk Management Facility prior to 1 March 2024.
The most commonly asked questions
Please contact your Account Manager for any question you may have.
Clients who require a Legal Entity Identifier (LEI), that have been onboarded to their Risk Management Facility prior to 1 March 2024 will be notified by letter as well as contacted by their Account Manager prior to 21 October 2024.
Rabobank will also send a letter to Risk Management Facility clients who have not yet obtained an LEI in September, as a reminder that an LEI is required if they wish to trade over-the-counter derivatives from 21 October 2024.
To help strengthen global financial regulation in Australia.
As the G20* evaluated the origins of the global financial crisis. One of the root causes was the difficulty in identifying the counterparties undertaking derivatives and regulators' ability to aggregate transactional data across the marketplace.
As part of its review, the G20 introduced the concept of a legal entity identifier (LEI) which would be used to identify counterparties in over-the-counter derivative transactions.
Australian Securities and Investment Commission (ASIC) has introduced mandatory LEI requirements for all financial institutions dealing in over-the-counter derivatives in Australia from October 2024. This is one crucial data element that will help to harmonise regulation with internationally accepted standards.
* G20: Group of 20 is an intergovernmental forum which works to address major issues related to the global economy, such as international financial stability.
If you’re planning to trade in over-the-counter (OTC) derivatives you will require an Legal Entity Identifier (LEI) from 21 October 2024 to ensure there are no interruptions to your trading.
The annual renewal process ensures that you and the LEI Issuing organisation review and re-validate the legal entity reference data at least once per year. This ensures high data quality with regard to the global LEI population and consequently, trust in the Global LEI System.
As this process is completed with your LEI Issuer, there is no need to let Rabobank know that you have renewed your LEI.
Generally speaking any person who has been authorised by the requesting organisation can apply for and manage LEIs.
Depending on the LEI Issuer, you may be asked to provide proof of authorisation, such a Power of Attorney or be required to complete an Authorisation form.