Legal Entity Identifier Registration

14,999.00

All Inclusive Fees

 

(EMI: Rs.1444.61 for 12 months)*

Description

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The Legal Entity Identifier is a code assigned to every entity, just like the Aadhar card for individuals, on an international scale. The Legal Entity Identifier (LEI) code is conceived as a key measure to improve the quality and accuracy of financial data systems for better risk management post the Global Financial Crisis which took place during the period of 2007-2008. Now, it is being increasingly used and adopted in jurisdictions around the world in an effort to achieve these aims.

What is an LEI?

LEI is a 20-digit unique code to identify legal entities that involve financial transactions worldwide. Such legal entities may be individuals, companies or government entities. The 20-digit unique code has been developed by the International Organization for Standardization (ISO) based on the ISO17442 standard.

Why the need for Legal Entity Identifier Registration arises?

When we think of the international financial world, it becomes very difficult for a company located across the ocean, on another continent to ascertain the fiscal liabilities and obligations of a trading partner. It was observed that various companies were concealing details of potential pay-outs while being caught in legal disputes. Some companies, in order to raise money from investors at a higher valuation, may hide details of initial investments and debt in the company. This is the problem that the Legal Entity Identifier targets to resolve.  Further, LEI can serve the following purposes:

  • Providing reliable and correct credentials of legal entities that are parties to a financial transaction.
  • Outlining financial exposure taken by the corporate.
  • Supporting cost-effective compliance with regulatory reporting requirements.
  • To check credit rating, in case any new financial product is launched in the market to raise funds.
  • In the following chart, you can find the various legal entities which must apply for LEI

Apart from the above, there are various LLPs, Private Companies, Government Companies, One Person Companies (OPCs), Insurance Companies, Trusts, Housing Finance Companies, Non-Banking Financial Companies (NBFCs), etc. which can be included under the bracket of Legal Entities

 

Mandatory LEI direction by the Reserve Bank of India

  • In the year 2017, Reserve Bank of India (RBI) under Section 35 of the Banking Regulation Act instructed banks to compulsorily ask their large borrowers having fund exposures more than 5 crores and up to Rs 50 crores to obtain an LEI.
  • Further, it was directed that banks should encourage large borrowers to obtain Legal Entity Identifier for their parent entity as well as all subsidiaries and associates.

Thus, LEI has been implemented in a phased manner for participants (other than individuals) in the over-the-counter markets for rupee interest rate derivatives, foreign currency derivatives and credit derivatives in India.

Regulatory Authority administering issuance of LEI

  • Legal Entity Identifier under Global scenario

Global LEI Foundation also known as GLEIF is the designated authority who administer the issuance of LEI and its compliance related matters. GLEIF is a non-profit oriented institution which has been provided the task of running the system and structure of LEI on international level.

  • Legal Entity Identifier under Indian Scenario

In India, entities can obtain LEI by doing self-registration with any of the Local Operating Unit which is accredited by the GLEIF.

Further, Legal Entity Identifier India Limited is a fully-owned subsidiary of the Clearing Corporation of India Ltd., and it serves as a Local Operating Unit for the issuance of internationally compatible Legal Entity Identifiers in India. Under the Payment and Settlement Systems Act of 2007, the Reserve Bank of India recognizes Legal Entity Identifier India Limited as an “issuer” of Legal Entity Identifiers. The Global Entity Identifier Foundation has accredited Legal Entity Identifier India Limited as a Local Operation Unit to issue and manage Legal Entity Identifiers.

Assignment of LEI

LEI will be assigned on application by the legal entity and after due authentication of data. For the organization, LEI will

  • Help as a proof of identity for a financial entity
  • Help to abide by regulatory requirements
  • Facilitate transaction reporting to Trade Repositories

Documents required for Legal Entity Identifier Registration

To register for an LEI, the legal entity is required to submit the following documents:

  • Registration Certificate/Certificate of Incorporation
  • Copy of PAN Card
  • Board Resolution as per the format specified by LEIL
  • Power of Attorney as per the format specified by LEIL
  • Statutory Auditor’s Certificate as per the format specified by LEIL
  • Undertaking –cum-Indemnity as per the format specified by LEIL
  • Audited Financial Statements

The financial set of documents provided by the entity is duly verified by the body that governs the entity which may include Ministry of Corporate Affairs for Companies, Securities and Exchanges Board of India (SEBI) for Mutual Funds and the corporation charges a minimal fee at the time of registration/ renewal.

Registration Authorities for different Legal Entities

All LEI requests will be independently validated with the identified source. The below is the list of Registration Authority for the respective legal forms.

Name of Registration Authority Type of Legal Entity
Ministry of Corporate Affairs All types of Companies permitted under

the Companies Act including NBFCs,

AMCs and Insurance Companies

Securities Exchange Board of India Mutual Funds (MFs), Alternative Investment Funds (AIFs) and AMCs
National Securities Depository Limited and /or Central Depository Services Limited MF Sub Schemes and AIF Sub Schemes
National Housing Bank Housing Finance Companies
NSDL (ITD) For PAN Verification of all Legal entities
Deposit Insurance and Credit Guarantee Corporation Scheduled Urban Co-operative Bank Guarantee Corporation
Gazette Notification / Act of Parliament / Presidential order Public Sector Undertaking Banks,

Government Organizations

Mandatory LEI for Market Participants

All participants, other than individuals, undertaking transactions in the markets regulated by the RBI such as government securities markets, money markets (markets for any instrument with a maturity of one year or less) and non-derivative forex markets are required to obtain LEI codes.

Registration Fees

New registration under LEI will cost Rs. _______/- while renewal of existing registration costs Rs. ______/-, exclusive of GST, which shall be levied @_________%. Details regarding the same is available on the website of LEI.

Consequence of Non-Registration for an LEI Number

Borrowers who do not apply for an LEI number will be barred from availing the credit facilities from banks.

Further, the parent entity, subsidiary, as well as the associates of the entity, must obtain the LEI.

Renewal of LEI Number

Upon expiry of the validation period of one year, the entity will need to renew its license by submitting the entire records again in order to ensure the accuracy and actuality of the information.

The renewal date for existing LEI can be checked on “View Details” which provide the “LEI Next Renewal Date”.

We are a certified Registration Agent and manage your Legal Entity Identifier Registration. Our consulting team organizes registration, administration, and renewal. Our support team of experts is ready to answer any questions you might have.

Why you should choose Registration SEVA to get your Legal Entity Identifier Registration?

There are several reasons why you should choose us:

  • India’s first premium service provider for LEI
  • We help you in getting your LEI code in minimum time
  • Easy Application process
  • Simple Registration Form
  • Fastest Service Guaranteed
  • Assisting in LEI monitoring and maintenance
  • Secure Payments
  • __% discount on Multi-year
  • Automatic Renewals Available
  • __% discount for Auto Renewals
  • Responsive Customer Support

Through Registration SEVA, the process is quite simple and you are just one step away in getting your Legal Entity Identifier. So what are you waiting for? Register now!!

Final Deliverables

The introduction of this rule has undoubtedly facilitated the universal identification of borrowers. The primary reason remains to build up the risk management measures and eliminate fears of counterparty unreliability. The introduction of LEI in the banking sector is a step in the right direction and will support the integration in this era of globalization as well.

With the Indian banking industry neck-deep with stressed assets, the introduction of LEI will ensure loans are granted in a much more judicious manner and banks can carry out a better assessment of micro and macro-prudential risks, curbing financial fraud and contribute to accuracy of financial data.

FAQ on Legal Entity Identifier

01. What is a Legal Entity Identifier (LEI)?

A Legal Entity Identifier (LEI) is a unique identification code mandatory for all entities trading with securities, stocks and bonds.

LEIs are designed to identify legal entities. The LEI was introduced to illuminate ownership structures of active companies and to increase the transparency of the global financial market. This legal requirement applies to all companies regardless of size.

The LEI is a 20-digit alphanumeric code based on the ISO 17442 standard.

02.Who requires an LEI?

A Legal entity identifier (LEI) is mandatory for all companies regardless of size for transactions in interest rate, forex and credit derivative market.

03. What are the legalities of the LEI?

In 2017, the Reserve Bank of India (RBI) has made LEI compulsory for companies and organizations having aggregated fund-based and non-fund based exposure of credit over RS 5 crore. The final deadline for an LEI registration is March 31, 2020.

04. What do the LEI numbers and letters stand for?

The Legal Entity Identifier is standardized with ISO standard 17442 and consists of a combination of 20 numbers and letters.

  • The first four numbers define the identity of the issuing Local Operating Unit (LOU). This unit acts in the name of the Global Legal Entity Identifier Foundation (GLEIF) who outsources issuance and allocation of the LEI to certain authorized issuing agencies.
  • Numbers 5 and 6 always have a value of zero.
  • The numbers/letters seven to eighteen are unique identifiers to each entity.
  • The final 2 digits are checksum for verification purposes.

05. Who assigns an LEI number?

LEIs are assigned by the Global Legal Entity Identifier Foundation(GLEIF) and are issued by a network of Local Operating Units (LOU).

06. What is the validity period of an LEI?

An LEI is valid for one year from the date of issuance/last renewal date.

07. What happens if I don’t renew my LEI?

LEI shall be valid for a term of one year after assignment or renewal. It shall be the duty of the entity to apply for the renewal of LEI before the expiry of the validity of the LEI. The status of your LEI will change to ‘LAPSED’ on the next renewal date.

08.Can an individual apply for LEI?

No, an individual acting in natural capacity is currently out of scope to apply for LEI.

09. My company headquarters is moving abroad. Do I need to apply for new LEI?

No, an issued LEI retains its validity even if the entity moves into the area of responsibility of

a different issuing agency as long as the legal entity remains the same.

10. What are the documents required to be submitted to LOU for processing LEI applications?

The legal entity will have to submit the documents which include but are not limited to:

  • Registration Certificate/Certificate of Incorporation
  • Copy of PAN Card
  • Board Resolution as per the format specified by LEIL
  • Power of Attorney as per the format specified by LEIL
  • Statutory Auditor’s Certificate as per the format specified by LEIL
  • Undertaking –cum-Indemnity as per the format specified by LEIL
  • Audited Financial Statements