Legal Entity identifier Registration

Legal Entity identifier Registration

Legal Entity identifier Registration

The LEI is a 20-character alphanumeric code that identifies legal entities in financial transactions. It's designed to: Improve the identification of parties to financial transactions, Manage counterparty risk, Measure and monitor systemic risk, and Support compliance with regulatory reporting requirements.

The LEI is required for many companies, including:

  • Companies that trade stock or shares
  • Companies involved in securities transactions
  • Companies that issue or trade debt
  • Companies listed on a stock exchange
  • Companies in heavily regulated industries like insurance and asset management
  • The LEI code is generally valid for one year and can be renewed through the online portal.

Structure of the LEI Code

The LEI code is not one that possesses any embedded intelligence or country codes that would give rise to confusion and complexity of the users. It is based on four simple principles:

  • It is a global standard.
  • Every legal entity is assigned a single unique identifier.
  • It is available publicly, free to all users.
  • A high level of data quality supports it. The LEI code comprises of 20 characters and the following structure:-
    • Characters 1-4 are unique to each LOU (Local Operating Unit) and are affixed by the ROC Secretariat.
    • Characters 5-6 are reserved characters (00).
    • Characters 7-18 comprise a 12 character reference that is assigned by the LOU to a particular entity based on transparent and sound allocation policies.
    • Characters 19-20 are two check digits under ISO 17442.

Benefits of LEI Registration:

  1. Regulatory Compliance – Mandatory for financial transactions and reporting.
  2. Global Recognition – Enhances credibility in international markets.
  3. Fraud Prevention – Increases transparency and reduces financial risks.
  4. Secure Transactions – Ensures smooth processing of global financial operations.
  5. Banking & Investment Access – Required for stock exchanges and banking transactions.

Documents Required for LEI Registration :

  • Business registration proof (Incorporation Certificate, GST, PAN)
  • Address proof of business entity
  • Authorized signatory details and identity proof
  • Board resolution or authorization letter (if applicable)
  • Existing LEI code (for renewal cases)

A Legal Entity Identifier (LEI) is a unique 20-character alphanumeric code required for entities engaged in financial transactions. It helps in identifying legal entities participating in global financial markets, enhancing transparency and reducing financial fraud. Issued by accredited Local Operating Units (LOUs), an LEI is mandatory for businesses dealing with banks, stock exchanges, and regulatory authorities.