• FAI Comply

Recommendation 2020/12 of the European Systemic Risk Board (ESRB) on identifying legal entities

Following the publication of the C415 Circular, the Cyprus Securities and Exchange Commission (‘The CySEC’), wishes therein to inform the Regulated Entities that the Recommendation 2020/12 issued by ERSB on 24 September 2020 on identifying legal entities (LEI) were duly adopted. The purpose of Recommendation ESRB/2020/12 is the prevention and mitigation of systematic risks, to financial stability in the Union through the establishment of systematic use of the LEI by entities engaged in financial transactions. In more detail, the Recommendation ERSB/2020/12 recommends: I. Recommendation A – Introduction of a Union framework on the use of the LEI The Commission is recommended to propose that Union legislation that imposes an obligation on legal entities to report financial information, while paying due regard to the principle of proportionality, as expressed in Recommendation A(1), include the obligation to identify by way of an LEI:

  • the legal entity subject to the reporting obligation; and

  • any other legal entity about which information must be reported and which has an LEI.

II. Recommendation B – Use of the Legal Entity Identifier until the possible introduction of Union legislation

Pending any action taken by the Commission to comply with Recommendation A and the possible introduction of corresponding Union legislation, it is recommended that to the extent permitted by law and subject to the principle of proportionality:


A. the relevant authorities require or, where applicable, continue to require, all legal entities involved in financial transactions under their supervisory remit to have an LEI;

B. the authorities, when drafting, imposing, or amending financial reporting obligations include or, where applicable, continue to include, in such obligations an obligation to identify by way of an LEI:

  • the legal entity subject to the reporting obligation; and

  • any other legal entity about which information must be reported and which has an LEI

C. the authorities identify or, where applicable, continue to identify, by way of its LEI, any legal entity about which they publicly disclose information and which has an LEI.


Regulated Entities are urged to take the necessary action in order to ensure their compliance with the above requirements.


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Written by Angeliki Georgiou, Independent Legal Consultant