MiFID National Client Identifiers for Natural Persons

MiFID II requires SG Kleinwort Hambros Bank Limited (SGKH) to collect specific information about its clients and disclose this information to the UK regulator, the Financial Conduct Authority (FCA), as part of its transaction reporting obligations in relation to investments. This applies to all account holders engaged in investment activity that is facilitated by any branch of SGKH. Natural persons need to be reported using their designated National Client Identifier (NCI).

Complete and accurate identifiers are essential for regulators to detect and investigate suspected market abuse.

National Client Identifier (NCI)

A natural person must be identified in a transaction report by using an NCI specified in Annex II of the relevant Regulatory Technical Standards (embedded at the end of this document) based on the nationality of the person. All identifiers start with the ISO two-character country code of the individual’s nationality (e.g., ‘GB’, ‘US’ or ‘FR’ etc,.) followed by the identifier required for that country code as specified in Annex II. The NCI must be reported in accordance with the priority levels provided in Annex II using the highest priority identifier.

SGKH must report the 1st priority identifier of its clients if it can. The 2nd or 3rd priority identifiers must only be reported if the 1st priority is not available to the Client (e.g., the 1st priority identifier for UK individuals is the National Insurance Number (NINO) and the 2nd priority identifier is ‘CONCAT’. A CONCAT must only be reported if the individual does not have a NINO). SGKH requires a written confirmation from the Client on why the highest priority identifier cannot be provided.

Where the identifier is specified as CONCAT in Annex II, SGKH will generate an identifier by using the concatenation of the following details of the Client in a prescribed format; date of birth, first name and surname.

Trade Execution without the relevant National Client Identifier (NCI)

Firms subject to MiFID II transaction reporting obligations will not be able to execute a trade on behalf of their clients if the relevant NCI is not provided.

As a result, SGKH requires the highest priority identifier as specified in Annex II to execute trades when an order is placed. If the Client does not provide the required NCI or a valid reason for not providing the priority identifier, SGKH will not execute trades.

National Client Identifier (NCI) for a European Economic Area (EEA) or UK national

This section applies where an accountholder has only one nationality.

An NCI must be reported in accordance with the priority levels provided in Annex II, using the highest priority identifier. SGKH Clients are required to provide the 1st priority identifier. If that 1st priority identifier is not available, the Client must provide the 2nd priority identifier.

  • If the Client is a national of Austria, Germany, France, Hungary, Ireland, Liechtenstein, or Luxembourg, SGKH will generate a CONCAT value (by using the Client’s first name, last name, and date of birth) to report to the FCA.
  • If the Client is a national of Estonia, Iceland, Italy, or Spain, SGKH is required to obtain and report the 1st priority identifier specified in Annex II. If this is not provided, SGKH will not execute trades when an order is placed.
  • If the Client is a national of Malta or Poland, SGKH is required to obtain and report the 1st priority identifier specified in Annex II. If that 1st priority identifier is not available to the Client, the 2nd priority identifier must be provided. If the Client is unable to provide any of the required identifiers or an acceptable reason, SGKH will not execute trades when an order is placed.
  • If the Client is a national of Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Finland, Greece, Croatia, Lithuania, Latvia, Netherlands, Norway, Portugal, Romania, Sweden, Slovenia, or Slovakia, SGKH is required to obtain and report the 1st priority identifier specified in Annex II. If that 1st priority identifier is not provided (exception – acceptable reason to be provided for not providing priority 1 identifier), the Client will be required to provide 2nd priority identifier. If the Client is unable to provide any of the required identifiers or an acceptable reason, SGKH will not execute trades when an order is placed.
  • If the Client is a national of United Kingdom of Great Britain and Northern Ireland, SGKH is required to obtain and report the Client’s UK National Insurance Number.
  • SGKH is only able to generate and use the CONCAT value to submit to the FCA if the account holder has confirmed in writing that they have no National Insurance Number and SGKH does not have any record indicating the contrary.
National Client Identifier (NCI) for a person who does not have EEA or UK nationality

SGKH requires the Client to provide their National Passport Number, which is the highest priority identifier in accordance with the field referring to ‘All other countries’ in Annex II. SGKH is only able to generate and use the CONCAT value to submit to the FCA if the account holder has confirmed in writing that they have no current passport and SGKH does not have any record indicating the contrary.

Note that the Channel Islands, Gibraltar, and Isle of Man fall within ‘All Other countries’ requirements.

National Client Identifier (NCI) for multiple nationalities
  • If the Client is a national of more than one EEA country or the UK, SGKH requires this information to be confirmed to the relevant Private Banker at the time of onboarding so the correct identifier will be requested.
  • If the Client is a national of both EEA/UK and non-EEA countries, SGKH will require the highest priority identifier of the EEA country/UK as specified in the Annex II (or written confirmation from the Client on why the highest priority identifier cannot be provided – this is only applicable to countries where the regulation allows 2nd or 3rd priority identifiers).
  • If the Client is a national of more than one non-EEA/non-UK country, SGKH requires this information to be confirmed to the relevant Private Banker at the time of onboarding so the correct identifier will be requested, as separate rules will apply.

 

Access Annex II here.

 

 

 

CA52/Mar/2023