Obtaining a LEI code is essential for any legal entity participating in regulated financial transactions today. Leverage operational efficiencies and cost savings brought by these unique identifiers.
The process is simple and can be done online. Any representative can apply on behalf of the company. The first four digits identify the issuing Local Operating Unit (LOU), while numbers/letters 7-18 are unique to each legal entity.
How to Get an LEI Number
An LEI is a unique global identifier for legal entities participating in financial transactions. It is a required field for many regulatory reporting obligations and can help improve transparency in the financial markets. The identifier also makes it easier to connect with counterparties and conduct business globally. There are currently over 100 regulations across different jurisdictions that either require or ask for LEI codes to be used in financial transactions. An LEI number is not a company ID or a tax ID and cannot be obtained by individuals.
Legal entities must apply for an LEI through a service provider known as a Local Operating Unit (LOU) or Registration Agent. The LOU or agent will validate the application and check that the legal entity is registered and incorporated with the relevant authority. Once the application is approved the LOU will provide the LEI and update the Global LEI Index.
The data that is associated with an LEI is called Reference Data. It contains basic ‘business card’-type information about the legal entity that has been assigned an LEI. The openness of the Reference Data is intended to increase the speed and reliability of the system by making it easy for anyone to incorporate it into their own systems.
To ensure the quality of the Reference Data GLEIF has established a set of rules and a process for how LEI reference data is produced. The rules make it clear that the information provided must be accurate and up-to-date. There is also a rigorous review process for the Reference Data that takes into account the different needs of users and the limitations of the technology.
Bloomberg, which is accredited by GLEIF to manage LEI Reference Data, uses the data to provide a variety of products and services to its clients including market participants, research analysts, and investors. The LEI data that is available on Bloomberg is derived from various sources, for example the UK Companies House file number and Articles of Association, or the Delaware Secretary of State file number and the Articles of Organization in the United States.
Once you have an LEI it is important to maintain it. You can avoid a lapse by making sure that it is renewed annually. A lapsed LEI can prevent trades and transactions from being processed, or may cause delays in these processes. It is recommended to renew an LEI 60 days in advance of it lapse date to allow sufficient time for the renewal process to be completed.
At LEI Worldwide we offer an easy online application for obtaining an LEI. Once an LEI has been obtained we can then move it into your dashboard and create a single control account so that you can easily renew it in the future or order more for your group companies.
What is an LEI Number?
An LEI is a unique code that identifies a legal entity globally. This system was created to create greater transparency in the financial ecosystem, allow for streamlined reporting and reduce risk by providing a consistent set of reference data for all entities worldwide.
Regulated financial institutions are required to have an LEI, but any legal entity can apply for one voluntarily. Companies that trade in global capital markets, use OTC derivatives or engage in other regulated activities will need an LEI to comply with regulations such as MiFID II and the Markets in Financial Instruments Directive (MiFIR).
The issuance of LEIs is controlled by GLEIF, which oversees a network of public and private companies that act as Local Operating Units (LOUs). These LOUs supply the registration, renewal and maintenance of the LEI system worldwide.
A company that wants to register an LEI must provide a list of key information including its legal name, address and contact details. The LOU that issues the LEI will then verify this information and publish it in the global register. It is important that all the key information for a legal entity is correct and up to date, as this will help to ensure that the LEI pool is accurate and reliable.
An LEI number must be renewed annually. LOUs automatically send reminders to their clients 60, 30, 15 and 1 day before the LEI is due for renewal. Clients can also manually renew their LEI by submitting an online form at any time prior to the annual renewal date.
When applying for an LEI, the application asks a couple of questions regarding parent company and ownership details. However, this is not mandatory, and there are many reasons why a legal entity may not want to report its parent information.
There are also alternative uses for an LEI, including using it to validate other LEIs or as a replacement for a company number. This is a great way for companies to demonstrate that they are a credible and reliable business partner, especially when trading with other companies around the world.
When applying for an LEI, it’s important to remember that the process can take up to 24 hours. This is because the global LEI register is updated on a daily basis and the company will need to be active and trading before an LEI can be allocated. Those that don’t have an active LEI may face complications when attempting to make transactions with their regulators, financial intermediaries or banks and could risk a “no LEI, no trade” ruling. To avoid this, companies should always submit their LEI application well in advance of their annual renewal date. The good news is that it’s very simple and straightforward to do, also detailed upon in this article on how to get a LEI number.
Who Needs an LEI Number?
Legal entities that want to take part in global financial markets need an LEI number. This includes companies, funds and governments. The number identifies these entities on a global database. It is a 20-character alpha-numeric code that is based on the ISO 17442 standard. This enables regulators and banks to know who they are dealing with. The global LEI system was created in the aftermath of the financial crisis in 2008 by the G20 countries. It was also endorsed by the FSB – Financial Stability Board.
The United States is the world’s largest user of LEI numbers. This is due to a combination of the country’s size and a number of regulations that require an LEI number. These include the Dodd Frank Act, the Commodity Exchange Act and the MiFID II directive that applies to US companies trading in the EU.
If your company or fund is not required to have an LEI, it can still choose to get one. The LEI number boosts the credibility of your business and is quickly becoming a global standard. It can help you build trust in the market and in international trade. It is also an easy way for your customers to identify you on their platforms.
When applying for an LEI, you will need to provide some documents to verify your identity. These can be certified copies of your company registration certificate, memorandum of association and/or other official documentation. The exact requirements will depend on your jurisdiction. When in doubt, consult your local government or the regulating body of your industry.
Once you have all the documents ready, you can start registering for your LEI. You can use the online form provided by the registrar. The process is simple and requires only a few minutes of your time. Once you are finished, you will receive your LEI within a few days.
If you need any help registering for your LEI, our customer service team is available to assist you. You can reach out via email or phone. We’re happy to answer any questions you may have about the LEI. We’re here to help make the process as smooth as possible for you. We offer competitive pricing and fast turnaround times. You can find out more about our fees here.
