Understanding the LEI Code: An LEI provides a global identification system that provides registered entities with a verified digital “fingerprint,” helping regulators, banks and businesses know exactly who they’re dealing with.
When an LEI Matters: Obtaining and maintaining an LEI may be required for certain lending, trading, or cross-border transactions and can be a federal reporting mandate in some jurisdictions.
What Is an LEI?
Legal Entity Identifier Code (LEI) is a global 20-character, alphanumeric code issued to a legal entity formed in any country. This is based on the ISO 17442 (Financial services — Legal entity identifier) standard developed by the International Organization for Standardization. It has key information that is unique to the entity including entity formation, direct and ultimate parent details. The LEI system streamlines counterparty due diligence and KYC processes, facilitating global trade.
The objective behind developing the LEI system was to increase transparency, systemic stability, and trust after the 2008 financial crisis. At the 2011 G20 Cannes Summit, the Financial Stability Board (FSB), an international body of financial regulators that monitors and makes recommendations about the global financial system, was tasked to provide recommendations and proposals to implement a global legal entity identifier. The recommendations made by FSB were endorsed by the G20 Los Cabos Summit in 2012.
The LEI Regulatory Oversight Committee (ROC) was established thereafter in January 2013 to oversee a worldwide framework of legal entity identification, the Global LEI System. In June 2014, Global LEI Foundation (GLEIF) was established by the FSB to support the execution and use of LEIs. GLEIF monitors the data quality and integrity of the entire LEI ecosystem. It oversees the improvement in overall quality and accuracy of reference data provided to the LOUs.
Why LEI Codes Matter for Financial Transactions
An LEI is required by regulations across several jurisdictions for legal entities that are participating in financial transactions and global trades. It references essential information about a legal entity which assists financial institutions as well as other entities entering into a financial transaction to make an informed decision.
The LEI has become part of the client onboarding process for many global banking and financial institutions. It assists them in risk management as the data available for the entities that have an active LEI is accurate, current and reliable. LEI basically answers the questions of ‘who is who’ and ‘who owns whom’.
More than 100 laws, rules, regulations, directives and recommendations across the globe either mandate or request issuance and maintenance of LEI. This number is increasing rapidly with more countries committing to corporate transparency. Various regulations, directives or guidelines may stipulate LEI registration and maintenance in trading and other financial transaction regulatory reporting.
When Do You Need an LEI?
An LEI may be needed by entities that are participating in financial transactions, complex cross-border legal and financial transactions, syndicated loans, securities financing transactions, multi-nation structured finance transactions and borrowing including cross-border deals, trading stocks, bonds or derivatives. Legal entities in the process of entering into transactions with multinational banks and other financial institutions may be asked to register, obtain and maintain an LEI number as part of their Know-Your-Customer (KYC) process.
United States
Per certain regulatory reporting with the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) swap dealers and participants, commodities traders, brokerages require LEIs to be obtained and maintained by counterparties and investment companies. The SEC has also adopted a rule that requires all U.S. registered funds to report an LEI starting in 2019.
The Federal Reserve Board may require certain foreign banking organizations to include their LEIs on registry reporting forms. An LEI can also be required by the Federal Deposit Insurance Corporation in the reporting of certain insurance investments. Certain reporting requirements under Dodd–Frank Wall Street Reform and Consumer Protection Act require registration and maintenance of LEI for legal entities involved in security-based swaps that are reported to security-based swap data repositories. The MiFID II Directive, as described below, is also applicable to U.S.- formed legal entities trading in the EU-regulated markets.
European Union
In the European Union (EU) issuers of securities that are admitted to trade in EU-regulated markets are required to have and maintain an LEI. Any legal entity, EU or non-EU market participant, buying, selling or issuing a financial instrument on EU-regulated markets is required to have an LEI. There are a number of EU regulations and directives like the Markets in Financial Instruments Directive (MiFID II) and European Market Infrastructure Regulation (EMIR) that require legal entities to obtain and maintain an LEI. All derivative trade reports are required to be reported by identifying all legal entities by their LEI numbers.
Which Entities Can Obtain an LEI?
Legal entities, investment companies, and funds like managed funds, sub-funds of umbrella funds, master funds and umbrella funds, pension funds, trusts, and insurance companies.
Governments can obtain an LEI through a Local Operating Unit (LOU). There are several GLEIF-accredited LOUs in each region globally. A legal entity is not restricted to registering for an LEI with a LOU based only in its own country. The registration can be done with any LOU of the entity’s preference, regardless of its jurisdictional location.
From initial registration and business validation to annual renewal, our legal entity identifier services help companies worldwide obtain and maintain their LEIs.
How to Obtain an LEI Number?
Information Needed for an LEI Application
Historically, all that was needed to register an LEI for a legal entity was business card information, like registered name of the legal entity, registered address, country of formation and parent information, if any. Starting May 2017, Level 2 data reporting requirements were introduced. Per the reporting requirements, legal entities registering or renewing their LEI were to report ‘direct accounting consolidating parent’, defined as the lowest-level legal entity preparing consolidated financial statements, as well as their ‘ultimate accounting consolidating parent’. In both cases, the identification of the parent would be based on the accounting definition of consolidation applying to this parent. In 2022 GLEIF introduced another set of policy changes geared towards reporting requirements for the legal entities qualified as a fund. The change required funds to register for LEIs for themselves, fund managers and for an umbrella fund with sub-funds LEIs may be required for each fund based on the structure. Over 150,000 legal entities have reported fund relationships as of December 2025.
Once an application for the registration of LEI has been made with all relevant reference data LOUs verify all the reference data entered by the registrant with the local registration authority such as a national business register or secretary of state before which the registrant is formed. If the LOU is able to corroborate all reference data from public domain, the LOU issues an LEI which will be associated with the legal entity until it ceases to legal existence. In case of data that cannot be corroborated from public domain, the LOU reaches out to the registrant for additional documentation or clarification.
LEI Renewal and Record Updates
LEIs are required to be renewed annually. This helps GLEIF maintain the quality and trust in the reference data available for financial institutions or other interested parties who are relying on the LEI reference data to make financial decisions. It supports the role of the Global LEI System as a source of reliable reference data for use by both regulators and the financial services sector.
Changes and/or updates that are required to be reported at the time of annual renewals are termed as a Legal Entity Event which are change in legal name, legal address or headquarters address, legal form, or any restructuring. Documentary proof like filing with business register, if required, along with legally effective date of the Legal Entity Event. In addition to the above, for funds, changes and/or updates that required to be reported, fund structure changes as umbrella fund changes its structure to a stand-alone fund.
How to Look Up an Existing LEI
A legal entity can search GLEIF’s website to confirm whether an LEI already exists for the legal entity. If the LEI is lapsed, it can be renewed to change the status to “Issued” by providing current information and documentation.
Legal Entity Identifier services can assist with initial registration, business validation, and annual renewal. Confirming the required information and timing early can help keep LEI records current and support upcoming transactions.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.
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