LEI Code Registeration - An Overview

In today's interconnected financial world, clear identification is crucial. The Legal Entity Identifier (LEI) is a unique 20-character alphanumeric code, recognised globally, assigned to distinct legal entities participating in financial transactions. Think of it as a global business passport. The LEI system enhances transparency across financial markets, helps manage risk, and simplifies regulatory reporting by providing a consistent way to identify any legal entity involved in a transaction, anywhere in the world.

Need to obtain or renew an LEI for your business in India? Trustra Advisory simplifies the entire process, ensuring you stay compliant effortlessly. Our experts guide you every step of the way.

What Exactly is an LEI Code?

• Full Form: LEI stands for Legal Entity Identifier.
• Purpose: It's a standardized (ISO 17442) global identifier that provides verifiable data about legal entities. This helps answer critical questions in financial transactions: "Who is who?" and "Who owns whom?".
• Global Standard: Unlike local registration numbers (like CIN in India), the LEI is universally recognized, facilitating cross-border transaction tracking and regulatory oversight.
• Issuance: LEIs are issued by Local Operating Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF). In India, Legal Entity Identifier India Ltd. (LEIL) is the recognized issuer endorsed by the Reserve Bank of India (RBI).

Structure of an LEI Code:

Every 20-character LEI follows a consistent structure defined by the ISO 17442 standard:

Example LEI: 89450027AK4LSOGXGY18

• Characters 1-4: 8945 - Identifies the LOU that issued the LEI (e.g., LEIL's prefix).
• Characters 5-6: 00 - Two reserved characters, always set to zero.
• Characters 7-18: 27AK4LSOGXGY - A unique sequence specific to the legal entity.
• Characters 19-20: 18 - Two check digits for validating the code's integrity.

Why is Obtaining an LEI Important?

Having an LEI is increasingly vital for businesses involved in the financial system. Key benefits include:

• Enhanced Transparency: Clearly identifies parties in financial transactions worldwide, reducing confusion.
• Improved Risk Management: Allows financial institutions and regulators to better assess counterparty and credit risks.
• Regulatory Compliance: Many regulations (e.g., from RBI, SEBI) mandate LEIs for specific transactions and reporting. Non-compliance can lead to restrictions.
• Operational Efficiency: A single, standard identifier simplifies transaction processing, reporting, and record-keeping across different systems and borders.
• Fraud Prevention: Makes it easier to trace transactions and verify entity legitimacy, helping combat financial crime.
• Market Integrity: Contributes to overall financial market stability by ensuring clear identification of all participants.

Who Needs an LEI in India?

The requirement for an LEI (LEI applicability) covers a broad range of entities in India, particularly those involved in significant financial activities:

• Financial Institutions: Banks, insurance companies, NBFCs.
• Large Borrowers: Entities with total fund-based and non-fund-based exposure over ₹5 crore from any bank/financial institution.
• High-Value Transactions: Any entity undertaking transactions of ₹50 crore and above via RTGS/NEFT.
• Non-Resident Rupee Account Holders: Non-residents opening special non-resident rupee (SNRR) accounts.
• Market Participants: Entities involved in non-derivative markets, specific over-the-counter (OTC) derivative markets, and foreign exchange transactions, often mandated by SEBI or RBI guidelines.
• Issuers/Guarantors: Entities involved in issuing securities to the public or listed on stock exchanges.

Note: Regulatory requirements can evolve, so it's crucial to stay updated on the latest RBI and SEBI circulars regarding LEI applicability.

What Information Does an LEI Reveal?

The LEI connects to a public database containing key reference information about the entity:

• Level 1 Data (Who is who?):
  • Official Legal Name
  • Registered Address & Headquarters Address
  • Country & Legal Jurisdiction
  • Entity Status (Active, Inactive, etc.)
  • Initial Registration Date & Last Update
  • LEI Expiry Date
• Level 2 Data (Who owns whom?):
  • Information about the entity's direct and ultimate parent companies, helping to map corporate structures (where applicable and reported).

This publicly available data fosters trust and transparency in the global marketplace.

How to Get an LEI Code in India (The LEIL Process):

Obtaining an LEI generally involves these steps through the official issuer, LEIL:

1. Prepare Documents: Gather necessary documents like audited financial statements and a Letter of Authority or Board Resolution authorizing the application. Check the LEIL website ("Downloads" section) for specific formats and requirements based on your entity type.
2. Online Registration: Create an account on the LEIL portal using an official email address. Only authorized personnel should apply.
3. Fill Application: Complete the online form with accurate details about your company and any parent entities (direct/ultimate).
4. Payment & Submission: Pay the applicable fees (options usually include net banking, cards, or Demand Draft). Submit the application along with the required documents. You'll receive a reference number for tracking.
5. Verification: LEIL will verify the submitted information and documents. They may request clarifications or additional documents if needed.
6. Issuance: Once verification is successful, LEIL issues the LEI code and sends it electronically (usually via email). Share this LEI with your banks and relevant financial partners.

LEI Validity and Renewal:

• Validity: An LEI code is valid for one year from the date of issuance or the last renewal date.
• Renewal: To keep the LEI active and the associated data current, it must be renewed annually before the expiry date. An inactive LEI can disrupt transactions and regulatory reporting.
• Process: LEIL typically sends renewal reminders. You can often renew for multiple years (e.g., 1, 3, or 5 years) for convenience. During renewal, data is often re-verified against official registries.

Documents Typically Required for LEI Application:

While specific requirements can vary slightly, common documents include:

• Audited Financial Statements: To verify the entity's existence and operational status.
• Letter of Authority / Board Resolution: Authorizing specific individuals to apply for the LEI on behalf of the entity (using LEIL's specified format).
• Parent Company Documents: If applicable, audited financials or an Auditor's Certificate for holding/ultimate parent companies might be needed.

Always refer to the latest checklist on the LEIL website.

How to Search for an LEI Code:

You can easily look up an entity's LEI or verify an existing code:

• India Specific Search: Use the search function on the LEIL website (https://www.google.com/search?q=lei-india.com) to find LEIs issued in India.
• Global Search: Use the Global LEI Index provided by GLEIF (gleif.org). This comprehensive database allows searching by LEI, entity name, or address for entities registered worldwide. Search results provide details on the LEI status, entity information, and the issuing LOU.

Simplify Your LEI Registration with Trustra Advisory!

Navigating the LEI application and renewal process can seem complex. Trustra Advisory is here to help!

We provide end-to-end assistance for obtaining and managing your Legal Entity Identifier:

• Expert Guidance: Our team understands the LEI requirements and application process thoroughly.
• Document Assistance: We help you gather and prepare the necessary documentation correctly.
• Hassle-Free Application: We manage the online submission and follow-up with LEIL on your behalf.
• Timely Renewals: We can help you manage annual renewals to ensure your LEI remains active and compliant.

Focus on your business while we handle the compliance. Secure your LEI code effortlessly and confidently with Trustra Advisory. Contact us today to get started!

Documents Required for LEI Code in India