Summary of CySEC's Circular C415

Memo #56-2020

CySEC Circular No: C415
Date: 06/11/2020
Subject: Recommendation 2020/12 of the European Systemic Risk Board (ESRB) on identifying legal entities (LEI) (the ‘Recommendation ESRB/2020/12’)
Purpose: To inform Regulated Entities that the ESRB issued on 24 September 2020 the Recommendation 2020/12 on identifying legal entities (LEI).

In Summary:

CySEC has issued the Circular C415 on 06/11/2020 in order to inform the Cyprus Investment Firms (‘CIFs’), Credit Institutions, Alternative Investment Funds and their Managers (‘AIFs’/‘AIFMs’), UCITS and their Management Companies (‘UCITS’/‘UCITS MC’), Non-Financial Counterparties (NFCs), Central securities depositories (CSDs), Market operators of Regulated Markets and MTFs, Approved Publication Arrangements (APAs), Approved Reporting Mechanisms (ARMs) and Issuers, that the European Systemic Risk Board (ESRB) issued on 24 September 2020 the Recommendation 2020/12 on identifying legal entities (LEI).

The purpose of Recommendation ESRB/2020/12 is to contribute, in line with the ESRB’s mandate, to the prevention and mitigation of systemic risks to financial stability in the Union through the establishment of systematic use of the LEI by entities engaged in financial transactions. To achieve this objective, Recommendation ESRB/2020/12 seeks the introduction of a Union legal framework to uniquely identify legal entities engaged in financial transactions by LEIs and to make the use of the LEI more systematic in respect of supervisory reporting and public disclosure by ensuring that all legal entities established in the Union that are involved in financial transactions obtain and maintain an LEI.
The Recommendation ESRB/2020/12 recommends:

i. Recommendation A – Introduction of a Union framework on the use of the legal entity identifier
ii. Recommendation B – Use of the legal entity identifier until the possible introduction of Union legislation 

This Circular C415 provides more details for each of the Recommendation A and Recommendation B.
CySEC informs that adopts Recommendation ESRB/2020/12 by incorporating its recommendations into its supervisory practises.

CySEC urges Regulated Entities to take the necessary action in order to ensure their compliance with the Recommendation ESRB/2020/12.

Read the CySEC Circular C415

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