Explaining LEI to A Layman

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A legal entity identifier (LEI) is a reference code – like a one-time code – used in the market to differentiate the way a legal entity conducts financial transactions around the world.

All members operating in the financial markets (Forex, Futures, Bonds, Equities, etc.) have LEI codes.  This code is required to connect financial markets, companies and regulators.

What is the purpose of LEI?

Legal Identifier (LEI) is a 20-digit code used to identify financial institutions around the world.It has been implemented to improve the quality and accuracy of financial reporting systems for better risk management. Visit leiservice.com to know more.

Do all companies need LEIs?

 Currently, the most popular LEI law firms are financial institutions such as retailers, banks, investment and insurance companies, and credit unions. However, individuals do not need LEI to trade in the financial markets.

All you need to know about LEI.

 LEI is a twenty-digit code based on the ISO 17442 standard developed by ISO. It is combined with key reference information to enable clear and unique identification of legal entities involved in financial transactions.

LEI includes information on entity ownership structures and answers to “who owns who” and “who owns” questions.  Simply put, the publicly available LEI database can be thought of as a global index, which enhances the understanding of the global market.  The Financial Stability Board (FSB) has announced that the adoption of international LEI contributes to the “multiple sustainability goals” as a significant threat.  LEI is slowly advocating for “quality and accuracy of financial data”.

 *  The public LEI database is a global information standard and a unique key for legal entities.The data is regularly recorded and analyzed according to the system and procedure established by the collector.

  * Along with its partners in the international LEI process, the Global Foundation for Legal Entity Identifiers (GLEIF) continues to focus on improving the quality, reliability and usability of LEI data, providing market participants with more information.Helps to take advantage of the LEI population

 * Group 20, the BCA, the governing body of LEI policies, and many regulators around the world, emphasize the need for LEIs in the public interest.The LEI Global Index, developed by GLEIF, is instrumental in achieving this goal. It provides complete details of any interested, relevant and frees LEI.

What are the features of LEI?

 An LEI consists of a 20-letter numeric string, with the first four letters identifying the local operating unit (LOU) that issued the LEI.The letters 5-18 are the unique letter-number strings assigned to the organization by the LEI.The last two letters are checkered digits.

About LEI

  Legal Entity Identifier (LEI) is a 20-letter, alpha-numeric code based on the ISO 17442 standard developed by the International Organization for Standardization (ISO). It is linked to critical reference information that enables a clear and unique identification of legal entities involved in financial transactions.Each LEI contains information about an entity’s ownership structure and thus answers the questions of ‘who owns’ and ‘who owns’.  Simply put, the publicly available LEI data pool can be thought of as a global directory, which greatly enhances transparency in the global market.  


The Financial Stability Board (FSB) reiterates that the adoption of LEI globally will achieve “multiple financial stability goals” such as better risk management in firms as well as better assessment of micro and macroeconomic risks.  As a result, it promotes market integrity while controlling market misuse and financial fraud.  Last but not least, the LEI Rollout “supports the high quality and accuracy of aggregate financial data.