A Code That Started with a Crisis
The Legal Entity Identifier (LEI) isn’t just another compliance requirement—it’s a system built to restore trust in global finance.
After the 2008 financial crisis, regulators around the world realized something alarming: there was no unified way to identify legal entities across markets. As a result, it was nearly impossible to assess who owed what to whom, and where risk was concentrated.
To solve this, the G20 asked the Financial Stability Board (FSB) to design a solution. That initiative gave birth to the Global Legal Entity Identifier System (GLEIS).
The Global Legal Entity Identifier Foundation (GLEIF), a non-profit based in Switzerland, has governed the LEI system since 2014.
As of today, organizations have obtained over 2.9 million LEIs across more than 200 jurisdictions — making the LEI one of the most widely recognized global identifiers for businesses.
👉 Learn more about GLEIF’s governance model
How the LEI System Works
GLEIF does not issue LEIs itself. Instead, the LEI system is powered by a network of:
- Local Operating Units (LOUs) – accredited organizations that validate entity data and issue LEIs.
- Registration Agents (RAs) – companies that help businesses apply for or renew LEIs in cooperation with an LOU.
This layered structure ensures that the system is globally standardized while remaining locally accessible. All LEI data is public and searchable via the GLEIF LEI index.
Who Needs an LEI – And Why It Matters
LEIs are mandatory in many jurisdictions for activities like:
- Derivatives trading
- Securities transactions
- Regulatory reporting under MiFID II, EMIR, Dodd-Frank, and more
But even beyond regulations, LEIs are gaining popularity as a universal trust anchor.
Businesses use LEIs to:
- Speed up KYC and AML checks
- Simplify cross-border payments (especially under ISO 20022)
- Verify suppliers and partners across global procurement chains
- Map complex group structures and ownership relationships
- Prepare for future-ready digital identity with verifiable LEIs (vLEIs)
International institutions such as the IMF, FATF, and BIS CPMI have endorsed the LEI framework as a tool to fight financial crime and strengthen market transparency.
LEI as a Quality Signal – Not Just a Box to Tick
Many companies get an LEI simply because they have to. But some use it as a strategic advantage.
Holding a valid LEI—and keeping it updated—says a lot about your organization:
- You’re officially registered and traceable
- You’re open about your ownership structure
- You care about trust, data quality, and transparency
In many industries, LEI is becoming a quality mark. It shows banks, partners, and regulators that your company takes compliance seriously and maintains clean, up-to-date records.
Local Support for a Global System
While the LEI system was built for global consistency, it only works thanks to local service providers. They help companies apply easily and efficiently.
One example is LEI System OÜ, an accredited Registration Agent working with LOU partner RapidLEI. LEI System supports companies around the world with:
- Fast and fully automated LEI issuance
- Multilingual interfaces and customer support
- Personalized help based on local regulations
- Efficient renewals and ownership updates
With a global reach, LEI System still ensures each country gets a locally relevant service. This is how a complex international system becomes simple and accessible to everyday businesses.
👉 How to apply for an LEI with LEI System
New to LEIs?
If you’re just getting started, we recommend first reading our overview page:
👉 What is an LEI?
It explains what the Legal Entity Identifier is, who needs it, and how it’s used in global finance.
This article builds on that foundation by exploring the system’s origin, governance, and strategic value for businesses.
Final Thoughts – The LEI Builds Competitive Trust
The Legal Entity Identifier isn’t just a code—it’s a step toward a more transparent, trusted and digitally connected business environment.
By adopting the LEI system, companies put themselves in a better position to:
✅ Speed up cross-border transactions
✅ Build stronger relationships with partners and regulators
✅ Strengthen their digital identity for the future
✅ Gain visibility and trust in a global economy
In a world where data quality, identity, and transparency matter more than ever, the LEI is no longer optional—it’s strategic.
