LEI is short for Legal Entity Identifier.
It is globally, unique identifier for companies, businesses, organisations and all other types of legal entities.
The LEI code is similar to national business IDs issued by national business registrars like Company House in the UK, CVR-register in Denmark, Brønnøysundregistrene in Norway etc., but instead it is an internationally recognised way of identifying legal entities.
This is useful for creating transparency in financial transactions, for example when trading stocks or derivatives.
Only legal entities are eligible for a LEI code. Natural persons (individuals) are not eligible for a LEI code.
When should a LEI code be renewed / When to renew a LEI code?
One year from initial registration or every year thereafter.
LEI Codes are valid one year from issuance or renewal. The Global Legal Entity Foundation requires that the LEI issuer/Local Operating Units at latest one year after the date of issuance or renewal facilitates a check to verify the data on the Legal Entity is valid and update the data if needed.
When you are to renew a LEI code, you can do so up to 60 days before the LEI code lapses (One year from initial registration or every year thereafter).
You will extend the registration period with an entire year from the initial registration date or next renewal date. When you renew within the 60 days of next renewal date the additional year is added to the existing renewal date.
You do not lose or gain LEI registration days by waiting for renewal close to the next renewal deadline. Usually the LEI issuer will have to handle the renewal request and update the LEI data in due time before the next renewal date. To make sure the LEI code does not lapse due to last minute renewal, at the latest, make renewals days or weeks in advance.
The LEI issuer are obligated to inform the Legal Entity that the LEI code is up for renewal at least six weeks prior to the renewal date.
You can find upcoming renewal dates here: GLEIF LEI search 2.0
Look in the field Next Renewal Date to see when a LEI is due to be renewed.
When is a LEI code needed?
A LEI code is needed when a Legal Entity engages in transactions in financial markets. Examples are trading on stock markets, buying or selling securities, participating in IPOs and trading bonds.
The financial institution that facilitates the trade or transaction is required to have the Legal Entity identify itself with a LEI code to facilitate transparency in the financial markets. If the Legal Entity does not provide a valid LEI code, the transactions can not be completed. No LEI, No Trade.
How to get a LEI code?
Registering a LEI code is a quick 4-step process at official LEI issuers, such as Unilei.
1. Identify the Legal Entity with a valid Business ID from relevant national authorities, or the required business details.
2. Provide authorisation to register the Legal Entity.
3. Confirm your order and accept the Terms&Conditions.
4. Pay the registration and contract fee for the selected registration period.
After completing the registration process, the LEI issuer updates the GLEIF database and notify the Legal Entity on the newly issued LEI code. The LEI code is then public and can be used in transactions. This typically takes less than 24 hours.
What information is connected to a LEI code?
A Legal Entity Identifier (LEI) code represents a verified Legal Entity within a standardised global framework managed by the Global Legal Entity Identifier Foundations (GLEIF). The framework has standardised rules for verifying Legal Entity data at valid authorities where possible.
The LEI issued to a Legal Entity follows the Legal Entity though its entire lifecycle. The LEI code does not change, but the data connected to the LEI code is updated when relevant changes in the Legal Entity or its relations are made.
The list of data points connected to the LEI code is:
Data stored in the GLEIF database are grouped in:
-Legal Entity Reference Data (LE-RD)
-Legal Entity Identifier Relationship Record
-Reporting Exception
-Legal Entity Events
Structure of a LEI code / LEI number
Every LEI code or LEI number follows the same logic. A LEI code is a 20 character unique key. Every issued LEI is different.
The pattern in a LEI code contains four elements.
First four characters: Always digits. These first four digits in the LEI code identify the LEI issuer (Local Operating Unit, abbreviated LOU) that initially issued the code.
The four digit prefix ensures uniqueness among codes from LOUs
Example: 1595 are the digits representing Unilei as accredited LEI Issuer.
Once issued the first four digits remain the same, even if the Legal Entity with a transfer decides to let a different LOU manage the LEI code.
Characters 5 trough 18: A unique string for the Legal Entity to which the LEI code is issued. This part of the code is generated by the LEI issuer, and is checked in the GLEIF database for uniqueness before allocated to a Legal Entity.
This part of the code is a random string that is not embedded with intelligence, which means, there is no pattern to decipher for meaning, beyond its uniqueness.
Characters 19-20: Control characters. These two digits are used for verification as described in the ISO 17442 standard.
After a Local Operating Unit (LOU) issues a LEI code it remains the same for the life cycle of the Legal Entity.
When Legal Entities move through their lifecycle; moving legal address, mergers, acquisitions, bankruptcy and dissolution, the unique LEI Code issued to the Legal Entity remains the same, and the information in the data record for the Legal Entity is updated by the LOU in the Global Entity Identifier System (GLEIS).
The reference data, including Legal Entity Events and the status of the Legal Entity are renewed, at a minimum, every 12 months from the date of LEI code issuance. If not renewed, the LEI code status is set to Lapsed, which means the data is not current and the LEI code is not eligible to be used in financial transactions.
How many LEI codes are issued?
See the realtime numbers of issued LEI codes a GLEIF.org in the global LEI system statistics dashboard
What is the difference between a LEI Issuer (LOU) and a LEI Agent?
An LEI Issuer, also known as a Local Operating Unit (LOU), is an organization that has been accredited by the Global Legal Entity Identifier Foundation (GLEIF) to issue LEI codes to entities that need them. In order to become an LEI Issuer, an organization must meet certain requirements, such as having the necessary technical infrastructure and demonstrating a commitment to high standards of data quality and integrity.
On the other hand, an LEI agent is an organization that has been authorized by an LEI Issuer to act on its behalf in issuing LEI codes. An LEI agent may be authorized to handle certain aspects of the LEI issuance process, such as accepting applications from entities that need an LEI code, or verifying the information provided in those applications.
In summary, an LEI Issuer is an organization that has been accredited by the GLEIF to issue LEI codes, while an LEI agent is an organization that has been authorized by an LEI Issuer to assist in the LEI issuance process.
By choosing an accredited LEI Issuer (LOU) as your service partner, your LEI is managed by an official party that can directly update the GLEIF system with relevant changes and updates to the data of your Legal Entity.
