LEI stands for legal entity identifier code which is a 20-character alpha-numeric code created by the International Organization for Standardization (ISO). The LEI is a unique code used during financial transactions for all organizations and government entities.
If you are looking to get the LEI number for your company, then click on LEI Register to register or renew your code easily.
This LEI code cannot be obtained by an individual, and it is majorly created to regulate the reports of all financial companies. The LEI will act as a directory of all the financial entities as it records the financial transactions and ownership information about the non-individual participants.
This article will take you through the details of the Legal Entity Identifier.
How Important Is It To Get The LEI Code?
In the forex and credit derivative market, Lei becomes a necessity for any kind of transaction. The Lei acts as a helping agent to the bank and credit providers to check on the corporate borrowings. This will also help the organizations to be safe from the bank issuing multiple loans against them.
When it comes to business, Lei acts as a tool for international business growth as it aids in better data sharing, which speeds up the business process. In addition, the reserve bank of India has said that it is a must for companies that have both fund-based and non-fund-based exposure for more than five crore credits to have Lei.
Which Type Of Organization Needs LEI?
Some companies that can apply for Lei are partnership firms, sole proprietorships, insurance-based entities, housing finance companies, public limited companies, non-banking finance companies, trusts, government entities, one-person companies, Co-operative Societies or Multistate Co-operative Societies Mutual Fund, partnership with limited liability, alternative investment funds, nationalized banks, and many more entities like these fall under the important entities to have Lei.
Also, based on RBI, this lei system is implemented for all the entities that are over the counter market for Rupee Interest Rate derivatives.
How Can We Get An LEI?
Legal entity identifier can be obtained from an LOU, which stands for a local operating unit, or from any registration agent who is also available online. Legal entities can get their Lei by registering after filling a form which can be found here in LEI Register.
The registration is a manual work in which individuals register using their company’s autofill which makes the job much easier. The autofill speeds up the process while filling the registration forms, and one can directly register from certain Lei registration websites too. You can pay using net banking or can do an account-to-account transaction.
Do We Have To Renew the LEI Code?
Yes, it is important to renew the code because the validity of this code will be for one year from the date issued. Hence it is the responsibility of the organization or the company to renew the code on time to regain its validity. If you forget the date of renewal, you will be indicated as LAPSED on the status of the LEI on the date of renewal. This can be kept as a reminder for you to renew its validity. There is also another option where we can buy the Lei as a multi-year subscription in which the Lei validity will last for many years. In this case, you will not need to renew it every year: instead, just check the validity details once in a while. One can also change the subscription by filling the given form and submitting it.
This renewal process can be done through the LOU, which is the local operating unit, and the code will not change even if you transfer between different operating units (that is if you renew in a different local operating unit).