Open LEI
What is the open LEI system?
The Global Legal Entity Identifier Foundation (GLEIF) a not-for-profit organization established in 2014 following the G20’s request to the Financial Stability Board to provide suggestions for a global Legal Entity Identifier (LEI) and a supporting governance structure, subsequently leading to the Global LEI System (GLEIS), providing unique identification of legal entities participating in financial transactions worldwide by issuing LEIs and having an open LEI system.
GLEIF’s mission is to oversee the operational integrity of the Global LEI System. The foundation is overseen by the LEI Regulatory Oversight Committee (LEI ROC), an organization of public authority representatives worldwide. GLEIF authorizes the issuers of LEI, otherwise known as Local Operating Units (LOUs), to issue LEIs to legal entities that engage in financial transactions.
Why was the open LEI system created?
Before the widespread adoption of the open LEI system, many inefficient, predominantly proprietary identifiers provided false or outdated information. These shortcomings were a severe problem, particularly in financial markets, where regulators, banks, or other market participants could not access valid information about their counterparties.
Information accuracy and reliability are the foundation of trade, and any shortcoming affects everything from the ability to process transactions to the capacity to discern systematic risk automatically. The open LEI system solves this problem by providing permanent, IP-free, unique identifiers for all entities undertaking financial transactions.
Anyone can access the open LEI data, which includes:
1. Registered and trading names
2. Company type (e.g., Fund, Trust, limited liability company)
3. Registered address(es)
4. Company registration number
5. Parent company information
6. Child company information
LEI search is a user-friendly interface to the Legal Entity Identifier (LEI) system. It can access the global open and available LEI database, which is publicly available and updated daily.
The code was introduced as a critical measure to improve the quality and precision of financial data systems for better risk management during the Global Financial Crisis. So, it’s essentially a business passport, which identifies your company and makes it possible to check if your counterpart is who they claims to be. It’ll provide access to the global directory of participants within the financial market. The LEI search interface triumphs over former time-consuming background checks, allowing you to browse the GLEIF database systematically and can be easily integrated into your know-your-customer (KYC) process.
The LEI code
An LEI consists of 20 characters and will be issued to each company once:
- The first four characters are unique to the LOU, which has issued the LEI.
- The following 14 characters are letters and numbers unique for each company.
- The final 2 characters are known as the checking characters.
The Legal Entity Identifier information needs to be updated every 12 months.
Who needs an LEI?
LEI will be issued to any legal identity, including but not limited to all
- Banks, lenders, and investment companies
- Commodities traders
- CFDs (Contracts For Differences)
- Entities listed on the stock exchange
- Financial intermediaries
- Investors in mutual funds and hedge funds
- Trade OTC derivatives
- Self-Managed Superannuation Fund traders and investors
- Pension schemes
- Any entity must comply with the SFTR (Securities Financing Transaction Regulation). Check with a local Registration Agent if you are unsure about your need for an LEI.
LEI Register India is the leading LEI Registration Agent in the country. In partnership with LEI issuer Ubisecure Oy (RapidLEI), we have optimized the LEI process by making it easier, faster, and more affordable.
