MFSA Issues Circular on Adopting EIOPA’s Revised Guidelines on the Legal Entity Identifier

On the 8th August 2022, the Malta Financial Services Authority (hereinafter referred to as “the MFSA”) issued a Circular on Adopting the European Insurance and Occupational Pensions Authority (hereinafter referred to as “EIOPA”) Revised Guidelines on the Legal Entity Identifier (hereinafter referred to as “the Guidelines”) which became applicable on the 1st July 2022 and which repealed the Guidelines on the use of the Legal Entity Identifier.

The Legal Entity Identifier (hereinafter referred to as “LEI”) is a 20-character, alpha-numeric, code which is unique to each legal entity participating in financial transactions. Each LEI code contains information about an entity’s ownership structure. These LEI codes can be obtained from any endorsed pre-Local Operational Unit forming part of the Global Legal Entity Identifier Foundation.

To adopt the new Guidelines, the MFSA will be amending a number of Chapters of the Insurance Rules, the Insurance Distribution Rules, and the Pension Rules for Occupational Retirement Schemes.

These changes are being highlighted below:-

• Within Chapter 1 of the Insurance Rules, in the case of new undertakings, applicants will be required to finalize any outstanding matters including the LEI code. Additionally, where the applicant establishes branches within the EEA, such branches may also use the LEI code of the applicant. Where applicable, the applicant will also be requested to provide the LEI Code of the ultimate parent undertaking as defined in article 215 of Directive 2009/138/EC, and all undertakings, except non-EEA undertakings and non-regulated undertakings, included in the scope of a group as defined in article 212(1)(c) of Directive 2009/138/EC.
• Chapter 13 of the Insurance Rules and Chapter 1 of the Insurance Distribution Rules will be amended to adopt the revised EIOPA Guidelines.
• Chapter 2 of the Insurance Distribution Rules will also be amended and will require that enrolled persons (insurance agent, insurance broker, insurance manager, tied insurance intermediary and ancillary insurance intermediary) wishing to pursue activities in another Member State (cross-border business), via freedom of establishment or freedom to provide services will also be required to obtain an LEI code in line with the Guidelines.
• The Pension Rules for Occupational Retirement Schemes will be amended to introduce a new requirement for Institutions for occupational retirement provisions (hereinafter referred to as “IORPs”) to obtain an LEI code upon satisfying one of the following conditions:-(a)  A balance sheet total of more than one thousand million Euro; or
  (b) A balance sheet total of more than one hundred and less than one thousand million Euro and it is ranked as one of the five biggest IORP’s in terms of balance sheet totals in the Member State

The MFSA is now requesting that by not later than the 30th September 2022, any licence holders which are not in possession of an LEI code in line with the requirements of EIOPA’s Revised Guidelines are to inform the MFSA with the date when they applied for the LEI code and with the name of the service provider with which they applied to obtain such LEI code.

It is to be noted that once an LEI code is obtained, licence holders will be required to use LEI codes when fulfilling their reporting obligations to the MFSA.