The Need for LEI
If your company performs financial trades including forex you may have heard the term “LEI.” But what is LEI? And how does it work?
A Legal Entity Identifier (LEI) is a 20-character code used to identify legal entities participating in financial transactions such as trading stocks, bonds or forex. The LEI number functions as an international business or entity registration number that provides transparency in financial transactions through connection to key information.
Does your company deal in trading securities locally or globally? Then you need an LEI number.
Apply for a new LEI number here.
What is an LEI?
A Legal Entity Identifier (LEI) is a number or code that functions as an international business or entity registration number. Companies and banks can use the LEI to identify legal entities such as other companies and organizations when participating in financial transactions (e.g. trading stocks, bonds or forex).
Legal entities that trade or conduct transactions in financial markets across several countries, including the US and the EU, must obtain an LEI number.
The LEI number is an alpha-numeric code based on the ISO 17442 standard developed by the International Organization for Standardization (ISO).
An LEI number consists of 20 characters. The number can be broken into four parts:
- Numbers 1-4 always show the ID of the LOU which issued the LEI
- Numbers 5-6 always have a value of 0
- Numbers or letters 7-18 are unique to each entity
- Numbers 19-20 are for verification purposes
Numbers 1-4 always show the ID of the LOU which issued the LEI
Numbers 5-6 always have a value of 0
Numbers or letters 7-18 are unique to each entity
Numbers 19-20 are for verification purposes
This 20-character code enables identification of legal entities on an international scale as well as confirmation of their identity. This offers transparency on the financial market.
Two levels of data make up the LEI:
- Level 1: who is who?
Information concerning the entity’s legal name, registration number, legal address and more. - Level 2: who owns whom?
Relevant information relating to the entity’s ownership and ownership structure
The LEI system requires an annual fee. You pay this fee for registering a new LEI number and renewing an existing one. The fee covers administration, compliance with regulations, and system maintenance.
What is LEI good for?
The LEI system enables global tracing of financial transactions and allows easy identification of legal entities and their owners. The LEI enables this by providing standardized information and a global reference system.
System was developed in 2012 as a result of the global financial crisis of 2007-2008. Its aim is to create transparency within financial systems and transactions in order to prevent money laundering and financial fraud.
Another function of the LEI is the regulation of financial factors within jurisdictions that utilize the LEI system. The goal is for the global system to become a standard system – a system that can be used across markets and countries.
Control of the LEI system is divided between three different authorities. This ensures that the system remains credible, transparent and reliable. The three authorities are as follows:
- ROC (Regulatory Oversight Committee): a committee consisting of supervisory
authorities upholding the governance principles of and overseeing the Global LEI
System - GLEIF (Global Legal Entity Identifier Foundation): a not-for-profit organization that
coordinates and manages LEI numbers - LOU (Local Operating Unit): an LEI-issuing organization that issues LEI codes to
legal entities
Click here to view an illustration of the LEI system.
How do I apply for an LEI number?
Legal requirements and regulations govern the LEI system, but obtaining an LEI number doesn’t have to be complicated. At LEI System, we simplify the process for you.
Apply for a new LEI number here.
When you enter your company number our system will automatically collect your data from the local business register. We will then request a confirmation of the data provided. All you have to do now is wait—we will handle the application process for you. Your LEI code will be issued within 6 to 48 hours.
How do I renew my LEI number?
You must renew your LEI number annually to ensure all necessary information stays up-to-date. When you choose a renewal plan, LEI System actively manages the renewal process for you by updating the required information if it is not already updated in the local business register. Clients using our renewal service must notify us of any changes to their legal entities.
Renew your existing LEI number here.
How do I search for LEI numbers? (LEI lookup)
Do you need to check the LEI number of a legal entity? Or do you want to see if your LEI number is correctly registered in the global LEI system?
You can do this by searching the GLEIF database here.
How do I know if my LEI is valid?
Your new LEI number will be issued within 6 to 48 hours.
Please note that it may take up to 24 hours before your LEI number is ready for use. This is due to many banks and the global register collecting and updating LEI information on a daily basis only.
