This is why LEI codes are so important

The global LEI system

GLEIF (Global Legal Entity Identifier Foundation) is a non-profit organization founded in 2014. GLEIF is responsible for supporting the implementation and use of the global LEI system. The organization’s main task is to ensure that legal entities worldwide can be assigned unique identification codes, known as LEI codes, which are used to identify and verify legal entities in the financial markets.

As the administrator of the global LEI system, GLEIF is responsible for maintaining the official database where the public can search and find all issued LEI codes. GLEIF ensures that the data in the database is up-to-date and correct by cooperating with LOUs and registration agents responsible for issuing and maintaining LEI codes.

GLEIF also works closely with the LEI ROC (Regulatory Oversight Committee), which consists of public authorities from different countries. The role of the LEI ROC is to regulate and monitor the activities of GLEIF to ensure that the LEI system operates in accordance with the set standards and principles.

In short, GLEIF and the global LEI system enable more transparent and secure trading by enabling legal entities and stakeholders in the financial markets to identify and verify each other in a reliable and standardized way.

Read more about the global LEI system.

The enormous potential of the LEI system

By using the unique LEI codes, you can quickly and easily validate legal entities all over the world. GLEIF manages the global LEI system and maintains an up-to-date database for the public.

Read more about the LEI system.

New possibilities for LEI codes

GLEIF has introduced two new proof-of-concept initiatives promoting the use of LEI codes to strengthen digital trust and verification of legal entities.

The first initiative is focused on integrating LEI codes into electronic seals (eSeals) in collaboration with a Japanese consortium. The objective is to increase digital trust by reliably verifying the identities of legal entities worldwide. Results show that by including LEI codes in eSeals, you can increase digital trust and support international trade and commerce.

The second initiative deals with digital signing using verifiable LEIs (vLEIs) in the telecommunications industry. GLEIF has announced public trials of a new suite of organizational identity services that use vLEIs to verify digital identity. This will help tackle identity-related challenges such as scam calls and robot messages.

These initiatives are important steps toward creating international security in digital transactions. You can find more details about the initiatives on GLEIF’s website under GLEIF and LEI News.

Optimize your investments with an LEI code

It requires an active LEI code if a legal entity wants to invest. An LEI code identifies legal entities, including corporations, and is essential to comply with financial reporting legislation. Without an LEI code, the legal entity cannot invest in certain instruments, including stocks and bonds.

"Investing as a legal entity requires an active LEI code. An LEI code identifies legal entities, including corporations, and is essential to comply with financial reporting legislation. Without an LEI code, the legal entity cannot invest in certain instruments, such as bonds and shares."

There are several advantages to registering an LEI code: the company has access to more investment opportunities, it’s compliant, and it increases its credibility in the markets. Click here to apply for an LEI code.

Read about LEI codes when investing through a company.

LEIs in the banking sector - efficiency, transparency and the fight against financial crime

An LEI code is required for companies, foundations, and funds to trade in securities in accordance with the MiFID II requirement. Banks require companies to disclose their LEI code for financial transactions. The banks are required to report your LEI code, which increases the transparency and security of the markets.

The global LEI system is continuing to develop and will play an ever-growing role for banks in the fight against financial crime. Read more about the MiFID directive at EUR-lex here.

Read more about banks and their use of LEI codes.

Expansion of the global LEI system in 2024

GLEIF has announced plans to expand the use of the LEI system by 2024 to increase transparency and efficiency in financial transactions.

You can read about the new initiatives here. The article gives you an insight into the exciting perspectives and increased possibilities to strengthen the identification of companies across sectors and geographical borders.

The LEI system will also be integrated into non-financial sectors such as trade and shipping, opening up even wider application and opportunities for increased cooperation between national and international authorities.

Secure data processing with professional solutions

Global FinReg offers advanced data processing solutions, so you can rest assured that your data is processed in accordance with local rules and regulations. We understand the importance of protecting your data and maintaining high data security. This way, you can focus on your core business and know that your data is in safe hands with us.

Read more about our data processing.

Strengthening KYC processes with LEI codes

LEI codes can play an important role in strengthening the 'Know Your Customer' (KYC) process for financial institutions.

We have written an article explaining how LEI codes act as a global standard for company identification, as well as a reliable and verifiable source of information about a company's identity and structure. In the article, we also highlight how the use of LEI codes can help financial institutions meet the requirements of the KYC process and reduce their risk of financial crime.

Read more about LEI codes and KYC.

How LEI codes can help with anti-money laundering

Anti-money laundering (AML) is another crucial issue in the financial world. You can read this article to find out how LEI codes can be used in the fight against anti-money laundering.

In the context of anti-money laundering, the LEI system can help identify the owner of the business for the transaction in question. The global identification code provides a unique answer to the questions: 1) who is who, and 2) who owns who.

Our CEO, David, has participated in 'The Laundry' podcast, where he goes in-depth on topics such as KYC, AML, M&A, and even risk assessment.

You can find 'The Laundry' podcast on YouTube, Spotify, and many other podcast providers. Click here to explore the podcast.