FCA Proposals for Mandatory LEIs for Main Market Issuers
In our November 2016 briefing we asked “Do you need LEI (Legal Entity Identifier)?” For issuers with a listing on the Main Market, the answer is now yes, at some point in 2017.
On 2 December 2016, the FCA published Quarterly Consultation Paper No 15, which includes proposals to amend DTR 6 to require issuers to supply their LEI when they file regulated information with the FCA and to classify that regulated information using the classes and sub-classes set out in the Annex to the Regulatory Technical Standards, which implement the European Electronic Access Point (EEAP). The EEAP is a web portal designed to ensure fast access to regulated information (information required to be filed under the Transparency Directive and the MAR). The EEAP must be established by 1 January 2018 and all EU Member States must ensure access to their national central storage mechanisms (known as Officially Appointed Mechanisms) through the EEAP, so that the EEAP can provide access to the regulated information which is stored by those mechanisms. In the UK, the FCA is the Officially Appointed Mechanism.
As an Officially Appointed Mechanism, the FCA is required to use LEIs and to classify all regulated information in accordance with the classifications set out in the Annex to the Regulatory Technical Standards (Section B). This obligation applies from 1 January 2017.
On the basis that it is only an issuer that can apply to obtain a LEI for itself and only the issuer will be able to classify its regulatory information accurately, the FCA says it is effectively necessary to “upstream” to the issuer the obligation the Regulatory Technical Standards places on the FCA as the Officially Appointed Mechanism. This will be done by new DTR 6.2.2 AR and DTR 6.2.2BR.
The FCA is proposing that issuers notify all the classes or sub-classes in the table (which will form DTR6 Annex 1R) that are applicable to an announcement, in order to make the regulated information fully searchable.
The FCA does not say when it proposes that the amendments to DTR 6.2 should come into effect. However, the FCA is proposing to enable issuers to provide LEIs and classify regulated information when they file it with the FCA as from 1 January 2017, saying “even though the regulatory obligation on issuers to send LEIs or classify regulated information will not apply until the proposed rule comes into effect, we encourage issuers to do so from 1 January 2017 as it will ensure that regulated information which they file from that date will be searchable through the EEAP when it becomes operational”. The pressure is therefore on for issuers to apply for a LEI, if they have not already obtained one.
The FCA is also proposing that DTR 6.2.2AR and DTR 6.2.2BR will apply to listed companies who would not otherwise be subject to the Transparency Directive but are required by LR 9.2.6BR, LR 22.214.171.124R or LR 18.4.3R to comply with DTR 6 as if they were an issuer for the purposes of the Transparency Rules and to issuers of securitised derivatives who, pursuant to LR 19.4.11BR, the FCA considers should comply with DTR 6 as if they were an issuer of debt securities as defined in the Transparency Rules.
The consultation period closes on 2 January 2017. Please visit the FCA website to submit an online request form.
News & Insights
The Future for Developer Contributions
The Government has published its consultation document on reforming developer contributions to affordable housing and infrastructure.
MWB v Rock Advertising
MWB v Rock Advertising has wide ramifications for all types of contracts – not just those made between commercial parties.