The global LEI system was established to better regulate, monitor and analyze threats to financial stability. This was largely in response to the 2008 financial crisis that followed the collapse of Lehman Brothers Holdings Inc. The global LEI system provides greater transparency when processing large financial transactions, especially when transactions involve companies from multiple countries. Currently, there are several systems that mimic the purpose of an LEI, but this global system hopes to consolidate all information into a single database that takes into account all legal entities in the world. However, in 2016, an LEI ROC document established a guideline for collecting and referencing Level 2 data. This would ensure that a search for entity identifiers would also reveal “who owns whom” – ultimately leading to the LEI 2.0 search tool. Although an LEI is mandatory for trading, it is not necessary to have it solely to hold securities, although it is highly recommended. Not having an LEI code can be an unpleasant surprise when faced with a transaction. The other part of the baseline, the “level 2” data, answers the question “Who owns whom?” Where appropriate, it allows the identification of the direct and ultimate parent companies of a legal entity. The publicly accessible LEI database is a unique key to obtaining standardized information on legal entities worldwide. Data are recorded and regularly reviewed in accordance with protocols and procedures established by the Regulatory Oversight Committee. The Global Legal Entity Identifier Foundation (GLEIF) is a non-profit organization created to support and implement the use of LEI codes. It was established in June 2014 and its main tasks include overseeing the implementation and registration of LEI numbers and promoting transparency in the global financial market.
You host the main LEI database, which contains all LEI codes and associated information. GLEIF is supported and overseen by the LEI Regulatory Oversight Committee and is headquartered in Basel, Switzerland. The purpose of the LEI Code is to increase the transparency of financial transactions and reporting tasks. The use of LEIs is mandatory under a number of European Union regulations and directives and, from 3 January 2018, for all legal entities wishing to trade in securities or derivatives of any kind on European financial markets (e.g. shares, bonds; ETFs, currency futures, swaps, interest rate swaps, etc.) must register for an LEI. One of the advantages of a freely accessible global LEI system is that anyone can search for legal entities registered in the database. Our LEI search tool can be used for this purpose. Each LEI code contains reference data divided into two sections: Level 1 – who is who and Level 2 – who owns whom.
All LEI codes are published in the Global Legal Entity Identifier Foundation (GLEIF) database, and the data is publicly available and accessible to everyone, whether or not they have an LEI code. A Legal Entity Identifier (LEI) is a unique 20-digit alphanumeric code used to identify legal entities around the world. The code is based on the ISO 17442 standard developed by the International Organization for Standardization (ISO). LEI codes help firms and regulators identify parties involved in financial transactions, with the aim of improving transparency in the global marketplace. Even if the LEI code of a legal entity follows the ISO technical specification, the LEI code itself does not provide valuable information, but only serves to uniquely identify each entity. An LEI is obtained from service providers called Local Operating Units (LOUs) or from LEI registrars such as LEI Lookup. Companies like us act as intermediaries between customers and LOUs. This means that any new registrations or changes submitted usually go through us. We then contact the LOUs who issue, renew and publish the LEI codes in the GLEIF database. As a service provider that helps legal entities register for an LEI, our goal is to make the process as smooth and transparent as possible. Learn more about how to get a legal entity identifier. A legal entity is not limited to the use of an LEI issuer in its own country.