Documentation, Investments

LEI costs reduced for SMSFs


SMSFs that trade in foreign currency and derivatives can reduce their costs through a new multi-year identification renewal offer.

SMSFs that require a legal entity identifier (LEI) to invest and trade in derivatives or currency have been given an opportunity to reduce their costs by moving away from an annual renewal model.

APIR Systems, which provides LEIs to SMSFs, fund managers and stockbrokers, has changed its charging model and will now offer multi-year registrations and renewals with discounts for those entities taking up this approach.

A single-year registration and renewal will still cost $121, but three-year renewals will have a 9 per cent discount and five-year renewals will have a 17 per cent discount on the annual single-year charge.

The use of an LEI is required for SMSFs that want to execute transactions involving non-exchange-traded investment instruments, such as contracts for difference or foreign exchange, and the system was introduced on 1 October 2019.

APIR Systems chief executive Chris Donohoe said there had been strong growth in LEI registrations in recent years, including a doubling of registrations in the 2020  financial year, and despite the COVID-19 pandemic, registrations remained strong in line with an increase in trading activity on the Australian Securities Exchange.

Last month, however, Donohoe noted SMSFs had been slow to renew their LEI when it expired and encouraged them to do so to retain access to some investment markets that require the use of an LEI.

He added APIR expects a reasonable proportion of its 3000 LEI clients to renew on the multi-year arrangements as it streamlined the level of administration associated with the renewal process.

“Instead of annual engagement, it will now only be every few years, which will significantly improve the client experience through reduced administration. It’s not only a cost saving, but we’ve also simplified the user experience when clients are applying and renewing an LEI, which is a requirement in the trading of certain financial instruments,” he noted.

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