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The Legal Entity Identifier Number

The Legal Entity Identifier (LEI) is a globally verifiable identity code that contains a combination of twenty letters and numbers and is unique to a legal entity. The LEI contains a record with information about an entity such as its identity and group structure, its name, address and where it is registered, as well as whether they are a branch or owned by another company. The LEI allows such entity to be identified on a global database of entities searchable by number instead of by name. It is a way of identifying market participants on a single, standardised database and offers accurate data about a company which is accessible and completely free of charge to use.

To date, there have been over 1.6 million LEIs created globally, and it is quickly being adopted as a global standard in business transactions. For many companies within the global financial system, it is now also a legal requirement.

Advantages

One of the advantages of having an LEI number is that there is international recognition of the entity and trading credibility is increased, as investors, customers and potential stakeholders can locate essential data in real time. Furthermore, the entity would know exactly who it is dealing with.

Who Needs to Obtain a LEI

The use of the LEI is required by Maltese entities when they are trading within the EU, USA or further afield.

The Mifid II directive was introduced for European entities that trade in securities along with EMIR. These regulations stipulate that EU, including Maltese registered businesses will be required to report an LEI when trading abroad.

In general, it is a requirement for the below entities. The list, however, is not exhaustive.

  • Entities involved with financial transactions;
  • Financial intermediaries;
  • Funds and trusts;
  • Banking institutions and financial institutions;
  • Any legal entity that is listed on a stock exchange;
  • Entities that trade derivatives; that issue or trade debt, securities or equity; trading in pension schemes, commodities trading, contracts for differences, securities transactions, investment vehicles, mutual and hedge funds;
  • Entities that trade with an EU licensed broker;
  • Entities that are supervised by a financial regulator and their affiliates, subsidiaries and holding companies

Given that LEI numbers are becoming more popular, and entities are realising what benefits they can offer, such as streamlining banking processes and making them more efficient, many entities are choosing to obtain a LEI even if this is not a legal requirement in their country.

Obtaining a LEI

Whether you are a financial institution acting on behalf of your clients, or require an LEI for your company, you can obtain an LEI at www.lei-worldwide.com. The process is very simple and if you require any advice, please do not hesitate to contact Integritas for help and assistance, according to your specific needs.

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