This page explains how the Securities Financing Transactions Regulation (SFTR) uses the Legal Entity Identifier (LEI). You will learn who needs an LEI, where LEIs appear in SFTR reports (including issuer LEIs), and what EU vs UK validation rules expect. Updated: 24 September 2025.
Who needs an LEI under SFTR
- Counterparties (FC & NFC) — each legal‑entity counterparty is identified by an LEI.
- Reporting entity — the submitting firm’s LEI appears as the Entity Responsible for Reporting.
- Broker / Agent / Beneficiary — LEIs are used where these roles are reported.
- CCP / Clearing member / CSD — LEIs appear when relevant to the SFT.
- Natural persons — use national identifiers, not LEIs.
Need the basics? Start with What is an LEI? and the LEI code format. For roles and governance, see Who issues LEIs.
Where the LEI appears in SFTR
| Section | Field (examples) | Identifier | Notes |
|---|---|---|---|
| Counterparties | Counterparty 1 / Counterparty 2 | LEI | Must correspond to the two parties to the SFT. |
| Reporting | Entity Responsible for Reporting (ERR) | LEI | Submitting firm; status checks apply. |
| Intermediaries | Broker, Agent Lender, Tri‑party Agent, Clearing member | LEI | Reported when applicable to the trade. |
| Collateral/Loan | Issuer of the security used in the SFT | LEI of issuer | Issuer LEI expected for the underlying security (see next section). |
Issuer LEIs for underlying securities
SFTR expects the issuer’s LEI for securities used in SFTs (e.g., the collateral or the security lent/borrowed). Supervisors have previously allowed limited forbearance for third‑country issuers without an LEI, but those periods were time‑bound. Today, firms should capture and report issuer LEIs wherever available and remediate gaps proactively.
EU vs UK: validation highlights
- EU SFTR. LEI fields undergo format and status checks; the reporting entity’s LEI and both counterparties typically must be acceptable (e.g., Issued) for reported action types.
- UK SFTR. The FCA maintains separate validation rules and XML schemas. Recent amendments (effective late 2024) align with data‑quality goals while preserving UK‑specific details. Keep distinct EU vs UK rule sets in your systems.
Authoritative reference for policy and technical materials: ESMA — SFTR Reporting.
Operational controls & checks
- Validate LEIs. Run format and check‑digit tests; confirm status (active/issued) per regime.
- Issuer coverage. Maintain reference data for issuer LEIs tied to ISINs used in SFTs; track any gaps.
- Portfolio monitoring. Flag counterpart LEIs approaching lapse; align reminders with trading calendars.
- Reconcile. Compare reported LEIs against source systems and counterparty confirmations; resolve breaks quickly.
- EU vs UK configs. Maintain separate validation tables and effective dates.
Common pitfalls
- Submitting when the reporting entity’s LEI is lapsed.
- Missing issuer LEIs for widely used collateral or loaned securities.
- Using LEIs for natural persons instead of national identifiers.
- Applying EU validation logic to UK filings (or vice versa).
FAQ
Is SFTR dual‑sided or single‑sided?
SFTR is dual‑sided for most firms. Each counterparty reports its side to a trade repository (with delegated options available). Check your regime’s current guidance for any reforms in consultation.
Do I need a valid LEI for both counterparties?
Yes, in practice. Validation rules distinguish roles and actions, but reporting works cleanly only with acceptable (non‑lapsed) LEIs for the reporting entity and counterparties.
Pages
How do LEIs link to ISINs for collateral?
Maintain a reference map from ISIN to issuer LEI. Many firms source this from trusted data vendors and reconcile against public LEI data to ensure the issuer LEI is present and current.