We explain what the Legal Entity Identifier (LEI) is and how to obtain it
What is LEI?
The Legal Entity Identifier (LEI) is an alphanumeric code used to identify, worldwide, legal entities that are parties to financial transactions.
What is your goal?
As a global and unique code, it allows us to know the risks assumed by each participant in financial markets worldwide.
It therefore seeks to improve the transparency of these markets and thus be able to anticipate systemic risks in their early stages. In fact, this initiative was promoted by the G20 in the wake of the 2008 subprime mortgage crisis.
Who is obligated?
It must be obtained by legal entities that operate in financial markets with products admitted to trading: derivatives, foreign exchange insurance, equities, fixed income, structured products, ETFs, SICs,…
Since when?
The first to be required to obtain it were financial institutions, but since November 1st, it has been mandatory for companies that trade derivatives.
From January 3, 2018, its use will become widespread, affecting all legal entities that carry out transactions involving equity products (e.g., shares, warrants, or ETFs) and fixed-income products (e.g., bonds). Therefore, if your company intends, for example, to buy shares listed on the stock exchange, it must provide its LEI number to its financial institution; otherwise, the intermediary will not be able to execute the transaction (Art. 26 MiFIR).
How is it processed?
You must follow these steps:
- Submit the request
- Pay the registrar's fees, which, for example, for those legal entities registered in the Barcelona Mercantile Registry, range from 106 euros for the first application, portability or renewal of an expired LEI and 53 euros if a current LEI is renewed.
- Submission of the original documentation to the corresponding Commercial Registry.
Expiration
The code expires one year after it is obtained. It must therefore be renewed annually if you wish to continue operating in the financial markets.
LEI Code Inquiry
This can be done on the registrars' association website. Click here to access the service.
Should you require further information, or if you would like us to arrange for its acquisition, please do not hesitate to contact us.
Do you have any questions about this topic?
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A graduate in Law and with a Master's degree in Tax and Financial Management from the University of Barcelona, he also holds a Postgraduate Diploma in New Technologies Law from ESADE. He specializes in tax and corporate law.
Before joining Àmbit Assessor as manager in 1999, he worked as head of the Tax and Accounting department at the Busquets Terradellas law firm.
For years, he combined his work with teaching, serving as a professor of Public Finance and Tax Law at the Open University of Catalonia.
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