FCA and Bank of England requirements for LEI in payments and markets

The Financial Conduct Authority (FCA) and the Bank of England have expanded Legal Entity Identifier (LEI) adoption across UK financial institutions to strengthen counterparty insight and systemic risk monitoring. LEIs uniquely identify corporate borrowers, issuers, and market participants, enabling supervisors and intermediaries to link exposures across products.

For payments, the Bank of England’s CHAPS rulebook requires direct participants to capture and quote the LEI for all wholesale transactions. The ISO 20022 migration adds structured LEI fields to payment messages, making it easier for counterparties to reconcile high-value transfers and for supervisors to monitor flows in real time.

In capital markets, EMIR REFIT and MiFID II/MiFIR require investment firms and their clients to maintain active LEIs for trade reporting, transaction reporting, and post-trade transparency. Without a valid LEI, firms are prohibited from executing in-scope derivatives and securities transactions.

Compliance teams should embed LEI validation in onboarding, treasury workflows, and renewal monitoring. Keeping the code active supports trade reporting, collateral management, and post-trade reconciliation while aligning firms with UK supervisory expectations.