Who needs an LEI code?

Do I need an LEI code?

All legal entities wanting to trade in securities, such as shares, bonds and certificates, or carry out other financial transactions, must have an LEI code. LEI stands for Legal Entity Identifier.

Legal entities are defined as all forms of businesses, including companies, associations, and foundations. An LEI code consists of 20 characters and is an alphanumeric code used to identify the entity in question. All LEI codes appear in a searchable database at GLEIF (Global Legal Entity Identifier Foundation).

GLEIF is a non-profit organization responsible for the implementation and utilization of the global LEI system. The organization has its headquarters in Switzerland. GLEIF are responsible for the accreditation of LEI providers (LOUs) so that they can officially issue LEI codes to their customers.

What types of companies must have an LEI code?

Virtually all business types and organizations need an LEI code. The list includes, but is not limited to:

Pension schemes
Insurance companies
Banks and financial institutions
Investment associations
Hedge funds
Holding companies
Private limited companies
Joint stock companies
Stakeholders
Non-Governmental Organizations (NGOs)
Sole proprietorships

It is not a requirement for private individuals who carry put financial transactions to purchase an LEI code. If you are in doubt as to whether you should buy an LEI code, it is a good idea to contact your bank or investment firm. You are also always welcome to contact our customer service.

Why does my company need an LEI code?

An LEI code contains important details about the entity that is dealing in securities. An LEI code entails information on the entity's ownership structure, so it is possible to identify 1) who is who, and 2) who owns whom.

In the EU, it is a legal requirement to have an LEI code as a result of the MiFID II directive that came into force in 2018. MiFID II is a regulatory framework designed to regulate and standardize financial markets. The purpose of MiFID II is thus to increase transparency and security on the financial market. LEI codes have many functions and can be used, among other things, in the fight against money laundering.

Where can I buy an LEI code?

There are many global providers of LEI codes. We recommend that you choose an LEI provider that is familiar with local legislation and company structures. At Global FinReg, we are connected to the local business registries in a number of countries. We offer to tap into these registries in order to retrieve your company information directly so you can save both the hassle and the time. Our English-speaking customer service team is of course ready to assist you with any questions you may have.

There are cases of cheap LEI issuers who use their LEI prices in order to lure customers over to their company, only to sell a code to another issuer without notifying the client in question. Therefore, check the credentials of your future LEI or give them a call to make sure they are who they say they are.

So who needs an LEI code?

To summarize: all legal entities that carry out financial transactions must have an LEI code. This pertains to any company regardless of the specific type or size. Only private individuals are exempt from the requirement to have an LEI code.

From our offices at Copenhagen in Denmark we at Global FinReg offer a number of services that make it easy and quick for you to get an LEI code. We care deeply about your privacy so we have made sure you can feel completely safe when registering as a user, e.g. through MitID. We automatically obtain your company information through the correct business registry and issue your LEI code within 1-2 working days.