Legal Entity Identifier (LEI Code) – FAQs
The new European legislation, the Markets in Financial Instruments Directive and the Markets in Financial Instruments Regulation (collectively, ‘MiFID II’) takes effect across the EU on the 3rd of January 2018.
As part of this legislation, investors are categorised as “natural persons” (i.e. individuals) or legal entities (i.e. companies, trusts, charities, etc.).
Legal entities are required to be identified in transaction reports by a Legal Entity Identifier (LEI). Transaction reports are those reports the regulator requires from Financial Services Companies each time they complete a transaction that is within the scope of MiFID II; this essentially covers most of the trading activity you conduct with Financial Services Companies.
Further information on the legal Identity Code can be found on the Global Legal Identifier Foundation website at https://www.gleif.org/en/about-lei/introducing-the-legal-entity-identifier-lei
What is legal entity identifier code? The Legal Entity Identifier (LEI) code is conceived as a key measure to improve the quality and accuracy of financial data systems for better risk management post the Global Financial Crisis. LEI is a unique 20-digit alpha-numeric code based on the ISO 17442 standard that is assigned to legal entities that are counterparties to financial transactions. A single legal entity should only be assigned one LEI Code globally.
What is an LEI used for? A result of joint public and private sectors efforts, the LEI supports authorities and market participants in identifying and managing financial risks. In particular, LEIs may be used for reporting and other regulatory purposes in the various jurisdictions
Why do legal entities require an LEI? The LEI is used as the identifier for the legal entity whenever it undertakes investment activity itself or when a financial institution undertakes investment activity on its behalf in a reportable financial instrument such as equities and bonds. The unique LEI enables regulatory authorities in Cyprus and the rest of the EU to monitor trading activity with specific emphasis on market abuse and market manipulation.
Who is responsible for obtaining an LEI? The legal entity itself is ultimately responsible for obtaining an LEI.
What is the deadline for obtaining an LEI? Legal entities who wish to maintain their investment accounts active must have an LEI by the 3rd of January 2018.
Is the LEI data publicly available? Yes. The LEI is a global standard, designed to be non-proprietary data that is freely accessible to all. The Global Legal Entity Identifier Foundation (GLEIF) has published the Global LEI Index. It provides information, updated daily, on all LEIs issued to date. Any interested party can easily access and search the complete LEI data pool. Visit https://www.gleif.org/en/lei/search/ and perform a search under the name of any legal entity.
How can I learn more about the Global LEI Foundation? Please visit https://www.gleif.org/en for more information on the . GLEIF
How can I search for the public information on my LEI Code?
Please visit https://www.gleif.org/en/lei/search/ and perform a search under the name of your legal entity.
What if there is an error in an LEI data record? The content of the Legal Entity Identifier (LEI) data record is referred to as the legal entity reference data. LEI owners are responsible for keeping the LEI issuing organization aware of updates to the legal entity reference data. Also, any LEI data user may challenge an LEI and/or its legal entity reference data. A challenge triggers a review of the record by the respective LEI issuing organization to determine the validity of the updated information being submitted. Verification and updates of the LEI and/or its legal entity reference data resulting from challenges are processed free of charge by the managing LEI issuer.
Which Entities can register for an LEI Code?
An LEI can be requested for all parties in a financial transaction including but not limited to:
- Registered Companies including Registered Subsidiaries
- Funds/Trusts/Collective Investment Schemes
- Non Profit/Charity Organizations/Religious Bodies
- Government Bodies and Organizations
- Sole Proprietors (Individuals that appear in their local register)
- Branch offices (Main HQ entity must already have an LEI)
It is important to distinguish between being eligible for an LEI and being required to have one. As defined in ISO standard 17442, any legal entity that enters into a financial transaction is eligible for an LEI. Any legal requirement to have an LEI will come from national financial regulators.
Can individuals get an LEI?
In principle, no. It should be noted however, that on 30 September 2015, the LEI Regulatory Oversight Committee published a statement clarifying the conditions under which individuals acting in a business capacity are eligible to obtain LEIs.
The statement is available here
What information is required to register for an LEI Code?
In order to uniquely identify an entity, several fields are required during registration. The fields include legal name, registered address, headquarters address, registration authority/number, entity type and legal form, in addition to other identifying data. Further, applicants will be asked to provide parent relationship information, such as parent LEI and other parent reference data, as well as relationship periods and accounting standards. Lastly, for branch entities applicants will be asked to provide information about their branch parent.
How do various corporate actions affect an LEI record?
NAME CHANGE – The LEI will remain the same since it relates to the same registered entity. However, the name change should be updated.
MERGER – For two LEI records that have a merger, the surviving entity will maintain its original LEI while the merged entity will maintain its LEI as well, but have its status changed to Merged. However, if a new entity is formed from the merger, then a new LEI will need to be registered.
HEADQUARTERS CHANGE – The LEI will remain the same. However, the new registered/headquarters address should be Updated.
ACQUISTION/CHANGE OF PARENT – The LEI will remain the same. However, the associated parent field will need to be updated.
What is the validity period of the LEI?
The validity period of an LEI is 1 year from the issuance date or from the last renewal date going forward. If the LEI is not renewed within the 1 year time period, the registration status will default to Lapsed. This Lapsed status may affect your entity’s ability to participate in regulatory reporting and financial transactions.
How can β.Plan Solutions register & renew my entity for an LEI Code?
LEI registration & renewal can be processed by β.Plan Solutions when our clients explicitly authorise us to manage their LEI Code on their behalf.
How can you help us apply for and obtain an LEI?
We offer a total solution and undertake the whole process, which includes collection of all necessary Documents and submission of a formal Application. We monitor the process until the issuance of LEI code which we will provide to you. Our service is highly efficient and reliable and designed to simplify things for you.
What is the fee for obtaining an LEI?
We would be happy to consider a formal request and provide a quotation for our services.
Does the legal entity need to renew its LEI?
Your LEI must be renewed on an annual basis in order to ensure that your investment account is kept active. There is a fee for renewing an LEI.
I already have an LEI or another firm is doing it on my behalf. What should I do?
Provide your Financial Services provider with your LEI Code.
Is our LEI Code cancelled if the legal entity ceases to exist or merged with another entity?
If the legal entity were to cease to exist or merge into another company the LEI would receive an update but would remain on the GLEIF database. If a legal entity, in error, received two LEI codes and one of them was marked as a duplicate, the duplicate LEI would still remain on the GLEIF database. The only case an LEI may be removed from the GLEIF is if such code is issued in error by the managing LOU.