Issuance

A Legal Entity Identifier (LEI) is a universal identification code that is issued to legal entities to enable the registrar to report securities transactions made on behalf of an entity, as required by European regulations. Both the Directive 2014/65/EU (MIFID 2), which entered into force on January 3, 2018, and the directly applicable Article 26 of Regulation (EU) No. 600/2014 (MIFIR) require all investment service providers to report on transactions with publicly traded securities. The European Commission’s Implementing Regulation (EU) 2017/394 requires securities registrars to identify all legal entities via an LEI code.

How is an LEI code issued?

Companies called Local Operating Units (or LOUs) are accredited by the Global Legal Entity Identifier Foundation (GLEIF), the umbrella organization of the global LEI system, to issue LEI codes. LOUs work with LEI code registration agents who prepare clients’ LEI registration applications and forward them to LOUs for validation and LEI code issuance. When an LEI code is issued, it is sent out to the email address provided in the application, and the LEI code and relevant entity data are transferred to the international GLEIF database.

How often must an LEI code be updated?

An LEI code is issued for 1 year and must be updated annually. This process is designed to increase the reliability of the data and keep it up-to-date. An LEI code can be renewed up to 60 days before its expiry. To start the renewal process, an entity must submit an online request to an LEI code service provider.
The European Securities Market Supervisory Authority (ESMA) requires market participants to have an active LEI code (status “ISSUED” in the GLEIF database) to comply with the MiFID II / MiFIR regulations. Regulated financial institutions are not permitted to accept transaction orders for securities listed on the stock exchange from clients with an expired LEI code.