There has been an influx of queries from SMSFs about the potential impact of the new Markets in Financial Instruments Directive (MiFID II) reporting regime as awareness remains low, according to APIR Systems.
The firm said confusion lingered among SMSFs over the potential effect of the MiFID II, with many unaware of the issue.
APIR Systems chief executive Chris Donohoe warned SMSF trustees and other financial services entities might be unable to transact with European counterparties from 3 January 2018, when the MiFID II reporting regime goes live, if they do not have a legal entity identifier (LEI).
“We have been inundated with requests for information from a range of businesses, such as funds, platforms and SMSFs, needing more information on what it means for them,” Donohoe said.
“The potential impact of these new regulations is still not fully understood by some financial services participants in Australia.
“In short, while MiFID II does not directly regulate Australian entities, it can affect them.”
He also said the European Securities and Markets Authority has instructed that firms should not trade with counterparties that do not have an LEI as they would be unable to submit valid transaction reports.
“Overseas parties take this requirement very seriously,” he said.
APIR Systems has partnered with the London Stock Exchange to better support the issuance and maintenance of LEIs and associated reference data in Australia and South-East Asia.