New regulations requiring bonds and derivatives trades to have a legal entity identifier number (LEI) for the first time may result in failed transactions, experts have warned. The new rule contained within Mifid II regulations that come into force in January may cause a last-minute rush by firms to get their securities a unique 20-character LEI. Until now, the vast majority of bonds have not needed to comply with the standard. "It is a massive implementation problem,” said David Bullen, founder of Bullen Management. A trader at Deutsche Bank told Bloomberg News last week that he was concerned about the impact on his business.
New regulations requiring bonds and derivatives trades to have a legal entity identifier number (LEI) for the first time may result in failed transactions, experts have warned. The new rule contained within Mifid II regulations that come into force in January may cause a last-minute rush by firms to get their securities a unique 20-character LEI. Until now, the vast majority of bonds have not needed to comply with the standard. "It is a massive implementation problem,” said David Bullen, founder of Bullen Management. Asia does not conform to the LEI standard so investors there may have difficulties trading in Europe.