This page explains how MiFID II/MiFIR use the Legal Entity Identifier (LEI). You will learn who needs an LEI, where it appears in transaction reporting, and why many firms apply the “no LEI, no trade” control. In addition, you will find simple checks to keep reporting clean and onboarding smooth. Updated: 24 September 2025.
Who needs an LEI under MiFID II
- Investment firms and trading venues – identified by LEI in transaction reporting and venue reports.
- Clients that are legal entities – must have an LEI for firms to act on their instructions. Therefore, firms typically apply the rule: no LEI, no trade.
- Issuers of instruments admitted to trading – issuers’ LEIs appear in reference and transaction data.
- Intermediaries in the order chain – brokers or transmitters identified by LEI where applicable.
- Natural persons – use national identifiers, not LEIs.
Need role context? Review Who issues LEIs (LOUs & Registration Agents) for governance and responsibilities.
Where the LEI appears in reporting
MiFIR transaction reports include LEIs for several data points. Typically, these include the investment firm, buyer, seller, and (where relevant) the executing entity or transmitting firm. Consequently, missing or lapsed LEIs lead to rejected or queried reports.
| Report field | Typical identifier | Notes |
|---|---|---|
| Investment firm | LEI | Reporting firm’s LEI must be valid. |
| Buyer / Seller | LEI (legal entity) / National ID (natural person) | Ensure the correct identifier type per counterparty. |
| Executing entity / Transmitting firm | LEI | Identify intermediaries in the order chain where applicable. |
| Issuer (reference data) | LEI | Used in instrument reference and, where relevant, transaction data. |
For an overview of the 20‑character structure and format checks, see LEI code format (ISO 17442).
Pre‑trade and onboarding controls
Figure — Many firms implement “no LEI, no trade”: if the client is a legal entity without a valid LEI, they remediate before execution.
- Check identifier type: LEI for legal entities; national ID for natural persons.
- Validate format and run check digits; then confirm status is active.
- Store evidence for signatory authority and any exemptions.
- Set cut‑offs and escalation for missing data to avoid end‑of‑day breaks.
Data quality & renewal
LEI records require annual renewal to keep reference and relationship data current. Therefore, align renewal with reporting cycles, and monitor counterpart LEIs for lapse risk. Moreover, match registry names exactly to avoid rejections.
Common pitfalls
- Executing for a legal‑entity client without a valid LEI.
- Using an LEI for a natural person instead of a national ID.
- Allowing issuer or firm LEIs to lapse close to reporting deadlines.
- Relying on regex checks without validating check digits and status.
FAQ
Is “no LEI, no trade” a hard rule?
MiFID II/MiFIR require firms to identify legal‑entity clients with an LEI for transaction reporting. Consequently, many firms block execution when the client lacks an LEI, because the report would fail or draw scrutiny.
Do natural persons need an LEI?
No. Natural persons are identified with national identifiers. LEIs apply to legal entities.
Must the LEI be active on the trade date?
Best practice is yes. Firms commonly require an active status for the trade date and for reporting, to ensure clean validation.
Authoritative reference: ESMA’s briefing on the Legal Entity Identifier under MiFID II/MiFIR provides background and expectations. ESMA — LEI briefing.