A short LEI definition
The Legal Entity Identifier is a 20-digit code which unmistakably identifies participants in the financial market. It is a recognised, unified and global system that has one goal: more security and transparency for everyone involved. The individual LEI number is therefore a direct answer to the causes which lead to the global financial crisis and as a recognised identification system for the first time connects parties to financial transactions (such as legal entities or investment funds) independent of their country, government or government type.
The LEI is in fact not a voluntary identification, but is mandatory for participants in the financial market. In Germany this means that several thousand companies are required to apply for an LEI – particularly market actors involved in derivatives trading as well as major banks, export-oriented companies and even municipalities. We expect that the LEI obligation will in the future be expanded to cover more companies. The Legal Entity Identifier will be distributed on a national level through so-called Local Operating Units (LOU) – GS1 Germany is one of the certified issuing agencies.
Who needs to apply for an LEI?
The LEI is not a voluntary form of identification, but obligatory for those financial market participants subject to the EMIR reporting requirements. In Germany, this means that several thousand companies must apply for an LEI including, first and foremost, all players in derivatives trading, as well as large banks, export-oriented companies and even municipalities. It is assumed that, in the future, the obligation to have an LEI will be extended to other companies. As a next step, all companies carrying out securities transactions must have an active LEI by 03.01.2018 when the MiFID-II directive, pursuant to the MiFIR-Regulation (EU), comes into effect. Among others, foundations will be affected by this.
What is an LEI used for?
The LEI is used to unmistakably identify a participant on the financial market on a global scale. By using the Global Legal Identifier System (GLEIS), it ensures transparency and security between several financial parties and provides for unified transaction traceability.
What does an LEI code look like?
As with the IBAN (International Bank Account Number) or BIC (Business Identifier Code), the LEI Code is structured in accordance with an ISO standard.
The LEI code format is a 20-digit alphanumeric ISO 17442 with the following structure:
Code: 1234 56 789101112131415161718 1920
1234: Prefix with four characters for the LEI issuing agency (LOU = Local Operating Unit); 9676 is uniquely allocated to GS1 Germany as LOU
56: two-digit separation, temporarily reserved
789101112131415161718: twelve-digit identification of the legal entity
1920: two-digit checksum in accordance with the ISO 17442 standard
Who needs an LEI?
Companies partaking in the derivatives trade and which are required to report this to a transaction register (link to the website of the Bundesanstalt zur Finanzdienstleistungsaufsicht [Federal Institute for the Supervision of Financial Services] www.bafin.de) which are:
- Banks and financial institutions
- Investment funds
- Insurance companies
- Securities service providers
The LEI is furthermore interesting for export-oriented companies as well as for other companies of the real economy which conclude derivative contracts.
Private individuals and legally dependent business units do not require an LEI, however.
Who issues LEIs?
The LEI is issued on a national level by an official LEI issuing agency – a so-called Local Operating Unit (LOU). GS1 Germany is one of the certified issuing agencies.
The Central Services Unit of the Global Legal Identifier System (GLEIS) is the Global LEI Foundation (GLEIF). It supports the expansion and the establishment of the Global Legal Entity Identifier Systems and coordinates the LEI issuing agencies by providing worldwide standards.
How do you receive an LEI?
You can apply for an LEI quickly and easily via our online portal. All you need is to register, then simply submit your application. Immediately after your data is checked, you will receive your LEI – before you even paid for it.
You can also apply for several LEIs at once. Please refer to the Guide to collective LEI application (PDF).
Foreign companies can also apply for an LEI with GS1 Germany. Due to the unified system, all issued LEIs are valid globally.
For how long is an LEI valid?
After the initial application, your LEI will be valid for one year, and you can cancel it subject to a three-month notice period to the end of the term. If you wish to use your LEI code longer, you need to renew it in the LEI services section. GS1 Germany will review the data relevant to the authentication once a year in connection to the renewal of the contract.
Which information is saved with the LEI?
Each LEI comes with additional data relating to the company and/or fund. These are published in addition in the GLEIF database.
- Official name of the legal entity or of the fund manager
- Registry name and registry number
- Legal form of the company
- Registered office of the headquarters or of the fund manager
- ISO country code (e.g. DE)
- Date of first issue of the LEI
- Date of the last change of the saved information
- Due date of the next LEI renewal
Which company-related information is disclosed in the LEI register?
- LEI data
- Company data
- Headquarters address
- Legal address
In addition to the LEI definition you can find further answers in our FAQ.