In pursuit of greater transparency and reduced risk in global markets, countries around the world are adopting the use of Legal Entity Identifiers (LEIs) as a requirement for participating in financial transactions.
Before applying for an LEI, it’s worth reviewing what kind of information and documentation will be required to successfully complete the process.
How to Apply for an LEI
The first step is determining who will apply. The entity itself can apply for an LEI, or a third party registration agent – such as COGENCY GLOBAL – can apply for the entity’s LEI, provided explicit permission from the entity has been obtained. Proof of signing authority is required for either type of registration (entity or third-party) and its aim is to show that the signer of the authorization letter, whether submitted straight to a Local Operating Unit (LOU) or via a 3rd party, has the ability to bind the company.
Next, gather the information required to submit an LEI application. This is divided into 2 categories:
- Level 1 data addresses “Who is who?”
- Level 2 data addresses “Who owns whom?”
Level 1 data, known as the ‘business card data’, includes fields like official name, legal address, registered address, jurisdiction ID, entity type etc. Level 2 data identifies the direct and ultimate parent of the applying entity. Parent relationships, however, are based on the accounting relationship – the direct and ultimate consolidating parent – rather than on percentage ownership.
When providing Level 2 relationship data, the following rules apply:
- If available, report the registered LEIs for the ultimate parent and/or direct parent or provide opt-out reasons for either or both relationships where necessary. Note that a reason for opting-out of ultimate or direct parent relationship information is required. The options are as follows:
- Binding legal commitments or legal obstacles.
- Consent not obtained.
- Detriment not excluded or disclosure detrimental.
- Natural persons or no known persons.
- No LEI.
- If the ultimate and/or direct parent has no registered LEI, and there is no opt-out reason provided, you’ll need to provide the legal name, address, and registration authority information for the parent.
- If the entity is an international branch, provide the branch headquarters information, rather than ultimate and direct parents. It is important to note that if the entity is an international branch, you must submit your LEI application to the same LOU from which the Parent entity received their LEI.
LEI Registration: Document Checklist
One of the more challenging aspects of obtaining an LEI is managing the information and documentation needed to successfully register. Below, we’ve compiled a checklist that can help guide you through the process.
Still have questions about obtaining an LEI? Get in touch with our knowledgeable team.
This content is provided for informational purposes only and should not be considered, or relied upon, as legal advice.