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Free LEI number infographic - All about Legal Entity Identifier (LEI code)!

Legal Entity Identifier (LEI)

In response to inability of financial institutions to uniquely identify organizations, the LEI system started to take form in 2011. Instigated by the G20, the Financial Stability Board (FSB) provided recommendations for the LEI system and its governance structure.

The LEI system promotes market integrity, reducing market abuse and financial fraud. Also, it supports a high quality and accuracy of financial data.


What is Legal Entity Identifier (LEI)?
The Global Legal Entity Identifier (LEI) System was established to uniquely and unambiguously identify parties in financial transactions
LEI code structure
The Legal Entity Identifier (LEI) code is in itself neutral and contain no embedded intelligence
  • The LEI follow the ISO 17442 standard with a defined set of reference data that are the most essential elements of identification of the legal entity
  • According to the ISO standard each LEI, a 20-character alphanumeric string, must be supplied with:
    • Official name of the legal entity as in an official register
    • Registered address
    • Country of formation
    • Codes for the representation of names of countries and their subdivisions
    • Date of first LEI assignment; last LEI information update date, date of expiry, if applicable
  • The characters 1-4 is used to identify the Local Operating Unit (LOU) who issued the LEI
  • The characters 5-18 is the unique entity-specific part of the code assigned by the LOU
  • Characters 19-20 are two check digits
Global LEI operating system
The G20 asked in 2011 the Financial Stability Board (FSB) to provide a system with the goal to provide unique identification of legal entities participating in financial transactions globally
Need of LEI?

Who should have a LEI?
Any legal entity of a financial transaction is eligible for a LEI. Legal requirement for a LEI will come from regulation (e.g. MiFID II, CEA)

  • Excludes natural persons, but includes trusts, partnerships, governmental and supranational organizations.

When is LEI required?
The LEI principles have been fully or partially adopted in more than 40 countries, including the US and the EU

  • GLEIF publishes a full list of local regulatory use on their website

Where do I get an LEI?
The GLEIF publish a list of all LEI issuing organizations (LOUs) per jurisdiction. You can also perform an internet search.

  • Make sure the LOU or registration agent you use is official under GLEIF.
Validity of the LEI
  • The validity period for a LEI is 1 year from the registration
  • The LEI has to be renewed every year, so the reference data is up to date
  • Renewal can be done through a Registration Agent or LOU
  • If the LEI is transferred from one LOU to another LOU, the LEI code is not changed
Advantages of the LEI system
  • It reduces friction in the identification of transaction counterparties
  • Makes information about legal entities in a particular transaction easily accessible and traceable
  • Enables easier detection of criminal actions concerning financial transactions
Information contained in a LEI (Level 1 and Level 2 data)

The LEI connects to key reference information that enables clear and unique identification of legal entities participating in financial transactions. The reference data include:

  • Basic ‘business card’ type information – ‘Level 1’ data
    • Answers the question of ‘who is who?’
    • See the specific data included ‘LEI code structure’ further up
  • Information about relationships – ‘Level 2’ data
    • Answers the question ‘who owns whom?’
    • Allows identification of direct and ultimate parents of a legal entity, if applicable
    • Only reported under certain conditions by LEI ROC (e.g. definition of a ‘parent’)
    • Distinct procedures apply regarding parents with/without a LEI
The Global LEI Index
  • The Index contains both current and historical LEI records and reference data
  • The only online global source with legal entity reference data
  • The data is publicly available, via search tool or download, free of charge
Sources

GLEIF.org  •  LEIROC.org  •  FSB.org  •  Wikipedia.org

Copyright 2020 – LEI Service