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In Which Countries Lei is Necessary ?

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What is an LEI Number ?

The Legal Organization Identifier (LEI) is a worldwide reference number that uniquely identifies any legal entity or structure that is a party to a financial transaction anywhere in the world.LEI Codes are simply used to identify legal entities on a global scale. This allows for great transparency in financial markets, standardisation, and greater risk control.

​According to LEI ROC the LEI no. was conceived to be used by the private sector to support improved risk management, increased operational efficiency, more accurate calculation of exposures, and other needs.

In which countries lei is necessary ?

Any entity that is considered a legal entity may complete a Legal Entity Identifier application. A Limited Company, an association, a trust, a charity anything that is recognised by law to be an organisation.

However, in order to enhance transparency in the global financial ecosystem some forms of legal entities fall under the LEI number requirement (Legal Entity Identifier). The LEI requirement is a feature in many EU and Global regulations.  For more information, click here.

  • LEI Codes are primarily required by any legal entity who is involved with financial transactions or operating within todays financial system, especially within the US, UK or EU. Countries like Australia, India, Africa and many more countries lei is necessary. There are a number of mandates currently in existence which state “no LEI, no trade”. This means if you do not have an LEI number when required, your trades will be blocked.

  • The use of the Legal Entity Identifier is mandatory for some companies, but others that may still apply for an LEI when not required are charities, government bodies, associations, and branches. This is quite popular as there are plenty of benefits associated with getting an LEI Number. If you fall under the LEI regulation requirement, but have not yet obtained an LEI, you may be at risk of complications with your regulators, financial intermediary or bank and could face a “no LEI no trade” ruling or a blocked/delayed transaction.

  • The use of LEI code as an identifier is mandated by a number of EU directives such as EMIR , MiFIR, MIFID II, SFTR & CSDR. The United States also have similar requirements such as the Dodd Frank Act, the OFR, the Federal Reserve and the Securities & Exchange commission (SEC) mandate its use in many forms and filing duties.

  • LEI requirements vary depending on the country, legal jurisdiction or industry. It is the prerogative of the authorities acting in individual jurisdictions to mandate the use of LEIs.

Why there is a need of lei number ?

There has been a global need for an identifier such as the LEI for decades. As global trade increased at an exponential rate in the 1900’s, a need arose for transparency in transactions, a means of increasing trust in who you are dealing with, especially cross boarders.

​There was no common identifier applicable to all legal entities across various industries, from companies, to funds and even Governments. This is why LEI codes are required.