The Legal Entity Identifier (LEI) is a 20-digit alphanumeric code based on ISO 17442 developed by the International Organization for Standardization (ISO). It connects to important reference information that allows clear and unambiguous identification of legal entities involved in financial transactions. Each LEI contains information about a company`s ownership structure, answering the questions « who is who » and « who owns whom ». Simply put, the publicly available LEI database can be considered a global directory, which greatly increases transparency in the global marketplace. There are a number of LEI issuers around the world that issue and store identifiers and act as primary interfaces to the global repository, usually these are financial exchanges or financial data providers. These are accredited by the Global Legal Entity Identifier Foundation (GLEIF) for LEI issuance. The other part of the baseline, the « level 2 » data, answers the question « Who owns whom? » Where appropriate, it allows the identification of the direct and ultimate parent companies of a legal entity. Some of the largest multinational banks have thousands of legal entities, many with similar names, operating around the world. With the expansion of the global LEI system, it is designed to help regulators and market participants understand and document these complex corporate structures and hierarchies.

The Legal Entity Identifier (LEI) is a reference code – like a barcode – that is used in all markets and jurisdictions to uniquely identify a legally distinct entity involved in a financial transaction. The LEI is designed to be the hub for financial data – the first global and unique entity identifier that allows risk managers and regulators to instantly and accurately identify parties to financial transactions. For example, a large international bank may have an LEI that identifies the parent company, as well as an LEI for each of its entities that buy or sell stocks, bonds, swaps or other transactions in the capital markets. In 2017, the RBI imposed a list on corporate borrowers with an aggregate exposure of 50 crore and not based on funds with a bank to obtain an LEI registration and register it in the central credit information repository (CRILC). This will make it easier to assess the total borrowing of enterprise groups and track the financial profile of a company/group, » the central bank said at the time. Each LEI is a 20-digit alphanumeric code and an associated set of reference data elements for the unique identification of a legally distinct entity operating in financial markets. This global standard complies with the 2020 specifications of the International Organization for Standardization (ISO), as documented in ISO 17442-1:2020, Legal Entity Identifier (LEI). The Legal Entity Identifier (LEI) is a globally unique identifier for legal entities involved in financial transactions. [1] It is also known as the LEI code or LEI number and is used to identify legal entities in a globally accessible database. Legal entities are organizations such as companies or government agencies involved in financial transactions.

One person cannot obtain an LEI. [2] The identifier is used in regulatory reporting to financial regulators and all financial companies and funds must have an LEI. The private sector has made several attempts over the past 20 years to establish a global legal entity identification system, but it is not in a position to achieve the coordination necessary to implement a single global solution. In the aftermath of the 2007-2009 financial crisis, the leaders of the world`s largest economies, through the G-20 and the Financial Stability Board (FSB), agreed to develop a coordinated solution to overcome these challenges. These efforts resulted in a public interest initiative that is now the Global LEI System. The benefits generated by the Global LEI Index for the wider business community increase with the rate of LEI adoption. Therefore, in order to maximize the benefits of identifying companies in the capital markets and beyond, companies are encouraged to participate in the process and obtain their own LEI. Getting an LEI is easy.

Registrants simply contact their preferred trading partner from the list of LEI issuing organizations available on the GLEIF website. The publicly accessible LEI database is a unique key to obtaining standardized information on legal entities worldwide. Data are recorded and regularly reviewed in accordance with protocols and procedures established by the Regulatory Oversight Committee. Even if the LEI code of a legal entity follows the ISO technical specification, the LEI code itself does not provide valuable information, but only serves to uniquely identify each entity. In response, the LEI system was developed by the G20 in 2011[4] in response to the inability of financial institutions to clearly identify organizations so that their financial transactions can be fully tracked in different national jurisdictions. [5] Currently, the Legal Entity Identifier Regulatory Oversight Committee (LEI ROC), a coalition of financial regulators and central banks from around the world, promotes the expansion of the LEI. The United States and European countries require companies to use the legal entity identifier when reporting details of OTC derivatives transactions to tax authorities. [ref. Today, authorities in 45 jurisdictions require the use of the LEI code to identify legal entities involved in various financial transactions. [ref. needed] In January 2013, Finance Ministers and key financial regulators from the world`s largest economies agreed at the FSB to transfer responsibility for overseeing the global LEI project to the Regulatory Oversight Committee – a group of more than 50 regulators and representatives from around the world.

One of their first decisions was that the committee members appoint a representative of the OFR as their first chairman. A global LEI system will provide long-term benefits to firms by uniquely identifying their counterparties – the firms they do business with – and the clients they serve, facilitating internal risk management. Industry estimates suggest that universal adoption of the global LEI system could save the financial sector $300-10 billion. Banks passed on nearly half of the RBI`s rate cuts: Report Those interested in obtaining an LEI can contact all Local Operating Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF). In India, the RBI Legal Entity Identifier India (LEIL) (www.ccilindia-lei.co.in) has granted authorization to issue LEIs under the Payment and Settlement Systems Act 2007. However, central and state government departments/agencies (which are not PSUs registered under the Corporations Act or incorporated under the relevant Act) are exempt from this provision.