LEI codes: The Essential Tool for Financial Transactions
A Legal Entity Identifier (LEI) code is needed to identify legal entities globally. Whether you run a large corporation or a small foundation, the LEI code can be your best friend in complex financial transactions. Read on to find out if an LEI is right for you.
What is an LEI code?
An LEI is a unique alphanumeric identifier and stands for Legal Entity Identifier.
The LEI was introduced as a means to improve transparency and reduce risk. The LEI code links legal entities to financial transactions, making it possible to track and identify participants. This is particularly important for governments and market participants who want a clear overview of their counterparties.
The importance of the LEI for businesses
The LEI plays an important role for companies participating in the financial markets.
For businesses themselves, an LEI can open doors to international markets. The increased transparency and reliability that an LEI brings can make a company more attractive to potential investors and partners, which can lead to increased opportunities for growth and collaboration.
It’s also worth noting that the LEI code’s required updates ensure that the data remains correct and accurate. Updating a company’s information annually not only strengthens trust in the market, but also helps to comply with various regulatory requirements across jurisdictions, which can be crucial for legitimate trade.
Who needs an LEI code?
All legal entities involved in financial transactions, trading stocks, bonds and other securities must have a valid LEI. This includes, among others:
- Companies
- Foundations
- Organizations
- Associations
- Banks and banks
- Insurance companies
How to get an LEI – 5 simple steps
Getting an LEI is a simple process that can be completed in five easy steps.
- Identify an LEI issuer: Find an authorized LEI issuer through the official GLEIF website. These issuers are authorized to issue LEIs.
- Register your legal entity: Create an account on the selected LEI issuer’s website and enter information about your legal entity.
- Submit documentation: Upload necessary documents confirming the identity and existence of your legal entity.
- Pay the fee: Pay the required fee for the issuance of the LEI code. The fee varies depending on the issuer and can include both a registration and an annual maintenance fee.
- Receive your LEI code: After approval of your application and payment of the fee, you will receive your unique LEI code. This code must be renewed annually to remain active.
NOTE: An LEI code must be renewed annually to remain valid and ensure the information is up-to-date.
