For certain trades, an LEI is essential to trade in Australia to ensure compliance and reporting. Not all trades require it, such as on-market equities.
If you trade financial products in Australia, you might be wondering whether you need a Legal Entity Identifier. The short answer is that an LEI is mandatory for certain types of trades, and not required for many others. Knowing where it applies will save time, reduce rejects at onboarding, and keep your reporting clean.
What an LEI is, and why it matters here
An LEI is a 20‑character code that uniquely identifies companies, funds, trusts and other legal entities. Regulators use it to tie trades to real-world entities and improve market transparency.
In Australia, ASIC’s derivatives reporting rules make the LEI the standard identifier for non‑individual parties to reportable OTC derivatives. If a trade must be reported to a licensed trade repository, any party that is an entity is expected to have an LEI included in that report. Individuals are not issued LEIs and are identified by client codes.
When an LEI is mandatory
The clearest trigger is a reportable OTC derivative. Think swaps, OTC options, CFDs and margin FX that meet the definition of an OTC derivative. The reporting entity must include the LEI for itself, its counterparty, and if relevant the broker and clearing member. Temporary relief that allowed internal client codes instead of LEIs ended in 2019 and 2020.
Rules apply equally to Australian and foreign entities where the trade is reportable in Australia. If you face an Australian reporting counterparty, they will expect your LEI before they can execute.
- OTC derivatives: LEI is required for entities in any reportable OTC trade.
- Reporting participants: Banks, brokers, funds and corporate trustees need LEIs for reporting and onboarding.
- Individuals: Not eligible for LEIs. Retail clients are reported using client codes.
- Clearing and brokers: If named in a report, the broker and clearing member must have LEIs.
When you can trade without an LEI
No general law forces LEIs for on‑market equities or bonds. Trades on the ASX or via Austraclear proceed without LEIs for counterparties. Standard exchange‑traded futures and options are outside the OTC reporting regime. Spot FX that is not a derivative does not trigger LEI use either.
End users that are exempt from reporting are often outside practical LEI needs for those trades. Small‑scale exemptions can also keep some very small entities out of scope.
Exemptions and edge cases
Australia’s regime includes several carve‑outs. End users that hedge commercial risks are exempt from reporting. Some very small entities may fall under small‑scale exemptions in the Corporations Regulations. Trusts are treated by the status of the trustee: a corporate trustee needs an LEI for reportable trades, while a sole individual trustee is not issued one.
These carve‑outs do not change overseas requirements. If your trade is reportable in another jurisdiction, you may still be asked for an LEI.
- End users hedging business risk may be exempt from reporting.
- Small‑scale activity can be exempt in limited conditions.
- Trusts follow the trustee: corporate trustee needs an LEI for reportable OTC trades.
How to get an LEI in Australia
Registration is online and typically takes minutes. You provide your legal name, registered address and registry details, usually ABN or ACN. Issuance follows validation against public registers. The code is valid for one year and must be renewed annually to remain active in the global database.
You can apply through any GLEIF‑accredited issuer or use a local registration agent for support and pricing options. LEI Service Australia processes new registrations, renewals and transfers the same day when ordered before 6 pm, offers multi‑year discounts, and keeps reference data current at no extra cost. Start here
Practical onboarding and compliance tips
Onboarding stalls and reporting breaks tend to come from missing or lapsed identifiers. A few simple habits help.
- Collect early: Capture LEIs for all relevant entities at KYC and client onboarding.
- Document scope: Maintain a list of your products that are reportable OTC derivatives.
- Track renewal: Set a rolling calendar to renew LEIs at least 30 days before expiry.
- Check status: Validate counterparties’ LEIs against the GLEIF database before trade.
- Cross‑border: Ask foreign funds and dealers for their LEI during term‑sheet stage.
- BIC and AVID: Transition to LEIs. Fallback identifiers are no longer accepted in Australia where an LEI can be obtained.
- Trusts and funds: Record which legal entity is the counterparty of record and ensure that entity holds the LEI.
Common questions
Does a proprietary limited company need an LEI to buy ASX shares?
No. On‑market equity trades do not require an LEI for trade execution or domestic reporting.
We are a manufacturing firm hedging currency risk with forwards. Do we need an LEI?
If your trades are reportable OTC derivatives and your bank reports them, you will be asked for an LEI unless you fall within an end‑user or small‑scale exemption. Check your classification and volume with your advisor or bank.
Our hedge fund trades CFDs through an overseas broker. Do we need an LEI?
Yes. CFDs are OTC derivatives, and the report will include your fund’s LEI and the broker’s LEI.
Do sole traders receive LEIs?
No. Individuals, including sole traders, are not issued LEIs. Where they are counterparties, reporting entities use client codes.
Does clearing change the requirement?
Clearing rules do not set separate LEI mandates, but the reporting obligation still applies to reportable OTC trades. If a clearing member is included in a report, it must have an LEI.
We used an AVID in the past. Is that still acceptable?
Not if an LEI is available. Relief that allowed internal codes and alternative identifiers has expired. Market practice expects LEIs.