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Legal Entity Identifier Codes Explained

AUTHORs: Margot Carty Services: International Listing Services DATE: 15/12/2017

In response to the global financial crisis, a recognised identification system has been introduced, and from 3 January 2018 onwards, it will be mandatory for parties to financial transactions (such as legal entities or investment funds) to obtain a Legal Entity Identifier (“LEI”) code under the European Market Infrastructure Regulation (“EMIR”), the Markets in Financial Instruments Directive (“MiFID II”) and the Markets in Financial Instruments Regulation (EU) No 600/2014 (“MiFIR”).

LEI codes are crucial for entities to fulfil their reporting obligations under financial regulations and directives. They are also important for matching and aggregating market data, both for transparency and regulatory purposes.

What is an LEI Code

An LEI is a unique 20 digit, alpha-numeric code which enables every legal entity that is party to a financial transaction to be identified in any jurisdiction. The code is linked to a set of key reference information relating to the legal entity in question, for example, name and address. The code is assigned to that legal entity for its entire life although it needs to be renewed on an annual basis.

Who requires an LEI Code

Any legal person or structure that is organised under the laws of any jurisdiction is eligible to obtain an LEI code however, local regulation and the competent authorities determine who legally requires an LEI code. Entities required to report under EMIR / MiFIR / MiFID II within Europe must obtain one, these generally fall into the below list:

  • an issuer of any financial instrument listed and / or traded on a trading venue;
  • all entities that issue equity, debt or other securities for other capital structures;
  • all entities that trade stock or debt, investment vehicles constituted as corporate entities or collective investment vehicles (including umbrella funds as well as sub-funds of umbrella structures, hedge funds, private equity funds, etc);
  • all financial intermediaries; and
  • banks and finance companies.

How to Obtain LEI / Annual Renewal

LEI codes are issued through a Local Operating Unit (“LOU”) accredited by the Global Legal Entity Identifier Foundation (“GLEIF”) which is responsible for monitoring LEI data quality as endorsed by the G20.

Matheson Listings offer an intermediary service to obtain the LEI code on your behalf. Please contact a member of the Listings team on listings@matheson.com for further information.