What is an LEI number or a LEI code?
LEI is an international standard (ISO 17442) that defines a system for identifying legal entities, such as companies and organizations, involved in financial transactions. The system involves assigning a unique identification code, called a Legal Entity Identifier (LEI), to each legal entity, which can be used to track financial transactions and reduce the risk of fraud and financial crime. The LEI-number is a unique 20-digit alphanumeric code that is assigned to legal entities, such as corporations or partnerships, that engage in financial transactions.
The LEI is designed to provide a standardised identification system that enables regulators and market participants to quickly and accurately identify and track legal entities involved in financial transactions. The LEI system was introduced in response to the global financial crisis of 2008-2009, to improve transparency and increase accountability in the financial markets.
Since 3 January 2018, it has been statutory in the EU that companies that trade in securities must have an LEI code.
Although it is not required to have an LEI code in all countries outside the EU, many companies still choose to have an LEI code, as it gives a serious impression and can facilitate trading through certain banks and institutions. There are international banks that choose to require their customers to hold an LEI code in order to trade according to the coined expression "No LEI, no trade".
The non-profit organization responsible for the system for LEI codes is called GLEIF - Global Legal Entity Identifier Foundation - and is based in Basel, Switzerland. The validity of an LEI code is 1 year. Thereafter, it must be renewed annually.
How do I get a LEI number?
With our service you follow these steps
- Enter the company name in the search field on this page to start a search.
- Click on the company you want to manage the LEI number for in the list that appears below the search field.
- Enter contact information, signatories and payment details and click on "Order"
- When the payment is registered and any contract is signed, your LEI number is registered.
- As soon as the LEI number is registered, it will be sent to the e-mail address you specified when ordering.
- The LEI code becomes visible in the global, GLEIF, register the day after the registration is made.
How much does it cost to get an LEI number
With our service the renewal cost is US dollars is:1 år: 100 US dollars3 år: 199 US dollars5 år: 400 US dollars
Who needs an LEI number
Legal entities that engage in financial transactions typically need an LEI number. This includes companies, partnerships, trusts, and other entities that participate in financial markets or hold financial assets.
For example, if a company wants to buy or sell securities or other financial instruments, it may need an LEI number to comply with regulations and reporting requirements. Similarly, if a fund manager wants to manage an investment fund, they may need an LEI number to identify the fund and comply with regulatory requirements.
Overall, the purpose of the LEI system is to improve transparency and accountability in financial markets by providing a standardised identification system for legal entities that participate in these markets.
On 3 January 2018, new European rules came into force - called Mifid 2 / Mifir - where requirements for natural and legal persons performing securities transactions must be identifiable in a clear and transparent manner. This applies to the various company forms:
If you have a limited company and intend to make securities transactions, you must have an LEI code.
No, individual companies do not need to have an LEI number if they do not trade in derivative instruments. If you buy ordinary shares through your individual company, you do not need an LEI number, as you will instead be identified by your social security number.
Yes, a trading company must have an LEI number to be able to trade shares.
Yes, the same goes for foundations. You need an LEI number.
Yes, associations need LEI numbers.
However, there is one exception that applies to all company forms, and that is if you trade your securities through endowment insurance. Then it is instead the insurance company that is formally considered to be the holder of the securities.
What is the Purpose of the global LEI System (GLEIS)
The purpose of the Global Legal Entity Identifier System (GLEIS) is to provide a unique identification system for legal entities engaged in financial transactions. The GLEIS assigns Legal Entity Identifiers (LEIs) to these entities, which are then used to identify and track them in financial transactions.
The GLEIS was established in response to the global financial crisis of 2008-2009, to improve transparency and accountability in financial markets. By providing a standardised identification system for legal entities, the GLEIS aims to reduce the risk of fraud, improve the accuracy of financial reporting, and enhance regulatory oversight of financial markets.
The GLEIS is overseen by the Global LEI Foundation (GLEIF), a non-profit organisation based in Switzerland. The GLEIF manages the registration and maintenance of LEIs, and provides a centralised database of LEI information that is accessible to regulators, market participants, and the public. The GLEIF also works to promote the adoption of LEIs in financial markets around the world, and to enhance the quality and reliability of LEI data.
Where do LEI numbers come from?
LEI numbers are issued by Local Operating Units (LOUs) that have been accredited by the Global Legal Entity Identifier Foundation (GLEIF), the body responsible for overseeing the Global Legal Entity Identifier System (GLEIS).
There are currently over 30 LOUs worldwide that are authorised to issue LEIs, including business registries, stock exchanges, and financial regulators. These LOUs are responsible for verifying the identity and legal status of the entities applying for LEIs, and for maintaining accurate and up-to-date information about those entities in the GLEIS database.
Once an entity's application for an LEI has been verified and approved by an LOU, the entity is assigned a unique 20-character alphanumeric code, which is their LEI. This LEI is then recorded in the GLEIS database, along with information about the entity, such as its legal name, address, and registration details.
It's worth noting that while LOUs are responsible for issuing and maintaining LEIs, the GLEIF is responsible for overseeing and regulating the overall operation of the GLEIS, ensuring that it operates in a transparent and reliable manner.
What benefits are there to obtaining an LEI?
There are several benefits to obtaining an LEI:
- Compliance: Many regulatory frameworks around the world require legal entities to have an LEI to participate in financial transactions. By obtaining an LEI, the entity can ensure it is compliant with these regulations, avoiding potential penalties or other consequences for non-compliance.
- Transparency: The use of LEIs enhances transparency and accuracy in financial reporting by enabling regulators, market participants, and the public to quickly and easily identify and track legal entities involved in financial transactions. This helps to reduce the risk of fraud and improves the overall integrity of financial markets.
- Efficiency: The use of LEIs can streamline the process of financial reporting and transaction processing, reducing costs and improving efficiency for all parties involved. This is particularly important for complex transactions that involve multiple legal entities, as it enables these entities to be identified and tracked more easily.
- Risk management: The use of LEIs can help financial institutions and other market participants to better manage risk by providing more accurate and reliable data on the legal entities involved in financial transactions. This can help to reduce the risk of errors, fraud, and other risks associated with financial transactions.
Overall, obtaining an LEI can provide significant benefits to legal entities engaged in financial transactions, including compliance with regulatory requirements, enhanced transparency, improved efficiency, and better risk management.
Who needs an LEI number in UK?
In the UK, legal entities that are engaged in financial transactions or regulated activities are typically required to obtain an LEI number. This includes:
- Companies: All companies that are registered with Companies House in the UK are required to obtain an LEI if they are involved in financial transactions or regulated activities. This includes both private and public companies.
- Trusts: Certain types of trusts, including unit trusts and open-ended investment companies, may be required to obtain an LEI if they are engaged in financial transactions.
- Pension funds: Pension funds that are registered in the UK are typically required to obtain an LEI if they are involved in financial transactions.
- Investment firms: Investment firms, including banks, brokers, and asset managers, are required to obtain an LEI to comply with regulatory reporting requirements.
- Other regulated entities: Other regulated entities, such as insurance companies and credit rating agencies, may also be required to obtain an LEI.
Overall, legal entities in the UK that are involved in financial transactions or regulated activities should check whether they need to obtain an LEI, and ensure that they comply with all relevant regulations and reporting requirements.
Who needs an LEI number in US?
In the United States, legal entities that are involved in financial transactions or regulated activities are typically required to obtain an LEI number. This includes:
- Corporations and Limited Liability Companies (LLCs): All corporations and LLCs that are registered with the Securities and Exchange Commission (SEC) or engage in financial transactions are required to obtain an LEI.
- Investment firms: Investment firms, including banks, brokers, and asset managers, are required to obtain an LEI to comply with regulatory reporting requirements.
- Mutual funds and exchange-traded funds (ETFs): Mutual funds and ETFs that are registered with the SEC are required to obtain an LEI.
- Derivatives traders: Derivatives traders who are members of certain swap data repositories (SDRs) or trade on certain designated contract markets (DCMs) are required to obtain an LEI.
- Other regulated entities: Other regulated entities, such as insurance companies, credit rating agencies, and certain types of trusts, may also be required to obtain an LEI.
Legal entities in the United States that are involved in financial transactions or regulated activities should check whether they need to obtain an LEI, and ensure that they comply with all relevant regulations and reporting requirements. The Commodity Futures Trading Commission (CFTC) and the SEC are the primary regulators of LEIs in the United States.
Who needs a LEI number in Australia?
In Australia, legal entities that are involved in financial transactions or that are required to report to regulatory authorities are typically required to obtain an LEI number. Some of the entities that may need to obtain an LEI number in Australia include:
- Companies - All companies registered in Australia, including foreign companies that conduct business in Australia, may need to obtain an LEI number.
- Trusts - Trusts that engage in financial transactions or that are required to report to regulatory authorities may need to obtain an LEI number.
- Government entities - Some government entities, such as state-owned corporations, may need to obtain an LEI number.
- Partnerships - Partnerships that engage in financial transactions or that are required to report to regulatory authorities may need to obtain an LEI number.
- Sole traders - Sole traders that engage in financial transactions or that are required to report to regulatory authorities may need to obtain an LEI number.
It is important to note that the requirements for obtaining an LEI number may vary depending on the jurisdiction and the specific regulatory requirements that apply to your legal entity. It is recommended that you consult with a legal or financial advisor to determine whether your entity needs to obtain an LEI number in Australia.
How to verify LEI number
To verify an LEI number, you can use the Global Legal Entity Identifier Foundation's (GLEIF) online search tool called the Global LEI Index. The Global LEI Index is a public database that contains information on all legal entities that have been issued an LEI number.
To verify an LEI number using the Global LEI Index:
- Go to the Global LEI Index search page on the GLEIF website.
- Enter the LEI number you want to verify in the search box.
- Click on the 'Search' button.
- The search results will show you information about the legal entity associated with the LEI number, including its name, registered address, and status.
You can also use third-party services that provide LEI verification, such as the LEI Lookup tool by Netlei. These services use the same database as the GLEIF, but may provide additional information and features.
How does LEI Code Transfers work?
In some cases, legal entities may need to transfer their LEI codes from one LOU to another. This article provides a comprehensive guide to LEI code transfers, including why transfers are necessary, how to initiate a transfer, and what to expect during the transfer process.
Why transfer an LEI code?
There are several reasons why a legal entity may need to transfer its LEI code from one LOU to another. Some common reasons include:
- Dissatisfaction with the current LOU's service
- Change in ownership or control of the legal entity
- Relocation of the legal entity to a new jurisdiction
Initiating an LEI code transfer
To initiate an LEI code transfer, the legal entity must first choose a new LOU to transfer the code to. The new LOU must be accredited by GLEIF and the legal entity must have an account with the new LOU.
Once a new LOU has been selected, the legal entity must provide the current LOU with written notice of its intent to transfer the LEI code. The notice should include the legal entity's name, LEI code, and the new LOU's name and accreditation number.
The current LOU must then confirm the transfer request within five business days. If the request is approved, the current LOU will transfer the LEI code to the new LOU within five business days.
What to expect during the transfer process
Once the LEI code transfer has been initiated, the legal entity can expect the following:
- The new LOU will contact the legal entity to verify its identity and request any necessary documentation.
- The new LOU will review the documentation and confirm the transfer request with the current LOU.
- The current LOU will transfer the LEI code to the new LOU.
- The new LOU will update the LEI database with the new information.
It is important to note that during the transfer process, the legal entity's LEI code will remain active and valid. However, there may be a brief period of time when the LEI code is inactive while the transfer is being processed.
In summary, LEI code transfers are a necessary process for legal entities that need to switch LOUs for any reason. By following the steps outlined in this article, legal entities can ensure a smooth and efficient transfer process.
If you have any further questions about LEI code transfers, please contact your current LOU or the new LOU that you plan to transfer your code to.
What is the general process for obtaining a LEI number
Our service will renew or provide a LEI number. But in general the process is:
- Choose an accredited Local Operating Unit (LOU): The entity should choose an LOU from the list of accredited providers published on the GLEIF website. There are multiple LOUs to choose from, each with their own fees, registration processes and validation requirements.
- Provide the necessary information: The legal entity will need to provide information about itself, such as its legal name, registered address, legal form, and registration number. The LOU may also require additional documentation, such as articles of incorporation, to verify the entity's identity.
- Pay the fees: The LOU will charge a fee for issuing the LEI, which varies depending on the LOU and the services offered.
- Validate the information: The LOU will validate the information provided by the entity, to ensure that it meets the GLEIF's requirements for issuing LEIs. This may involve additional checks or requests for documentation.
- Receive the LEI: Once the LOU has validated the entity's information, it will issue an LEI and record it in the GLEIS database. The entity can then use the LEI in financial transactions and reporting.
Overall, the process of obtaining an LEI is relatively straightforward, but it can vary depending on the LOU and the jurisdiction in which the entity is located. It's important for entities to choose a reputable and accredited LOU, and to provide accurate and up-to-date information to ensure a smooth and efficient application process.
What is The Financial Stability Board (FSB)
The LEI system has been developed by The Financial Stability Board (FSB) and is used by financial institutions, regulatory authorities, and other actors worldwide to promote transparency and security in the global financial sector. By using a standardized identification code, financial transactions can be tracked and monitored more efficiently, which contributes to reducing the risks of financial instability and crises.
The Financial Stability Board (FSB) is an international body that was established to promote financial stability by coordinating the development and implementation of regulatory and supervisory policies in the global financial system. It was created in 2009 by the G20 countries in response to the 2008 financial crisis, which highlighted the need for better cooperation and coordination between financial regulators around the world.
The FSB's mandate is to identify and assess potential risks to financial stability, develop and promote the implementation of effective regulatory, supervisory, and other financial sector policies, and monitor and assess the implementation of these policies. It works closely with other international organizations, such as the International Monetary Fund (IMF), the Bank for International Settlements (BIS), and the World Bank, as well as national authorities, to promote global financial stability.
The FSB's activities are overseen by a plenary of its members, which include central banks, regulatory agencies, and finance ministries from around the world. The plenary is supported by a number of standing committees and working groups, which focus on specific areas such as macroprudential policy, financial innovation, and cybersecurity.
One of the FSB's key initiatives is the development and implementation of the Legal Entity Identifier (LEI) system, which provides a unique identification code for legal entities engaged in financial transactions. The FSB also monitors the implementation of other international financial standards, such as the Basel III regulatory framework for banks.
Overall, the FSB plays an important role in promoting financial stability and reducing the risk of financial crises by fostering cooperation and coordination among financial regulators and authorities around the world.