05.08.24
LEI for Trusts
Understanding the complexities of financial regulations can be daunting, especially for Trustees of a Trust. One critical aspect that Trustees should have knowledge of is the Legal Entity Identifier (LEI) requirement, which is essential to ensure compliance with various reporting obligations. This blog post delves into the importance of LEIs for Trusts, the process of obtaining one, and the implications for Trustees in England and Wales.
What is an LEI, and why does my trust need one?
An LEI (Legal Entity Identifier) is a unique code which a legal entity, such as a Trust or company, may require to enable it to participate in financial transactions.
The LEI was introduced following the 2008 financial crisis. The crisis exposed a lack of clarity on who was trading on financial markets. In light of this, the implementation of LEI acts to facilitate regulatory reporting to improve transparency as part of transaction monitoring, ensures compliance with anti-money laundering regulations, and the aids prevention of fraud.
As a Trust is considered a legal entity, your investment advisor may require that the Trustees obtain an LEI for the Trust in order to engage in certain investment activity.
How do I obtain an LEI for a Trust?
To obtain an LEI, you will need to apply to a Local Operating Unit, an organisation that can issue LEIs to legal entities. In the UK, this is The London Stock Exchange (LSEG). In order to apply for an LEI through LSEG, you will need a UniVista account with LSEG. Once you have set up your account, you will need to apply for your trust’s LEI within the UniVista portal, which will require you to provide details on the nature of the trust as a legal entity.
Alternatively, you may wish to instruct an agent already registered with LSEG, such as Renaissance Trust, to apply for the LEI on your behalf. Instructing an agent who is familiar with the complicated system and requirements can speed up the process, which can otherwise be time-consuming and confusing. An agent can also deal with all related correspondence on your behalf should LSEG have any questions regarding the application.
Once your initial application has been approved, the trust’s unique LEI is issued to you by email. The code can then be provided to your investment advisor for their records.
What do I need to do on an ongoing basis?
Your LEI will be valid for one year from the date of issue. In order to continue engaging in financial activities, such as investment of trust funds, the Trustees must ensure that their trust’s LEI is renewed annually. Failure to do so will cause the LEI record to lapse and may cause the trust to be deemed as non-conforming, which may hinder future financial activities or transactions.
To renew your trust’s LEI, you can log in to your UniVista account and submit the request for renewal. Your LSEG agent can also renew your LEI for you.
How can Renaissance Trust help?
Renaissance Trust is registered as an agent with LSEG and routinely manages LEI applications and renewals on behalf of our clients. We also assist Trustees with the preparation of Investment Policy Statements to ensure that they are fulfilling their statutory duties relating to the investment of Trust assets.
Our team has over 35 years’ experience in the management of Trusts, including advising on all aspects of compliance. To discuss how we can help you, please feel free to contact us.
Leave a Reply