The global implementation of a standardized system for identifying legal entities is expected to lower costs for both individual companies and the broader market while enhancing risk management and financial market transparency.

This will be achieved by minimizing errors in business transactions and reducing expenses associated with data cleansing, maintenance, and regulatory reporting. Additionally, the clear identification of all contracting parties strengthens key business processes and mitigates risks for all involved companies.

The Financial Stability Board (FSB), a regulatory body based in Basel, established the Legal Entity Identifier (LEI) system on behalf of the G20. The system’s primary purpose is to facilitate the quick and reliable identification of all entities involved in financial transactions, including investment funds, through a unique identifier. Oversight of the LEI system is provided by the Legal Entity Identifier Regulatory Oversight Committee (LEI ROC) (www.leiroc.org), which includes more than 50 regulatory institutions worldwide, along with various public sector stakeholders.

A significant milestone in the development of a global entity identification system was reached in June 2014 with the creation of the Global LEI Foundation (GLEIF) (www.gleif.org), which serves as the administrative hub of the Global LEI System (GLEIS). GLEIF oversees the worldwide implementation of uniform LEI standards. The issuance of LEIs is managed by various Local Operating Units (LOUs), which leverage their expertise in local regulations and structures to ensure that company and fund data is accurately integrated into the global system.

For more details on the LEI system and related organizations, visit the websites of the FSB (www.financialstabilityboard.org), LEI ROC (www.leiroc.org), or GLEIF (www.gleif.org).

The Legal Entity Identifier (LEI) is a globally recognized and standardized identifier designed for financial market participants. Its primary function is to uniquely and transparently identify entities such as companies, banks, and investment funds, aiding in compliance with various financial reporting regulations. The LEI serves as an innovative solution that spans multiple jurisdictions, legal systems, and markets.

The establishment of the Global LEI System was driven by lessons learned from the recent financial crisis. It was developed in response to the challenges faced by banks and regulatory authorities in swiftly identifying complex corporate structures and the connections between issuers and securities.

When Lehman Brothers collapsed in September 2008, both regulators and private-sector firms were unable to quickly and comprehensively assess the extent of market participants’ exposure to Lehman and the interconnectedness of the vast network of market players. The crisis highlighted the urgent need for a global system to identify financial connections, allowing regulators and firms to better understand the true nature of risk exposures across the financial system.

The creation of the global LEI system addresses these vulnerabilities and offers significant, long-term benefits for both the public and private sectors.

The widespread adoption of the global LEI within the financial industry ensures that externally reported data to regulators, as well as internally used data for risk management, will be more consistent and accessible. This will aid regulators in more effectively analyzing and monitoring the stability of the financial system and potential threats. Additionally, it will allow companies to improve their internal management of operational risks, while reducing costs associated with data collection, cleaning, aggregation, and regulatory reporting.

Following the financial crisis, the goal of the drivers of the Legal Entity Identifier (LEI) initiative – the Group of 20, the Financial Stability Board and many regulators around the world – was to use the LEI to create transparency in the derivatives markets. As demonstrated with the current LEI population, these efforts have generated excellent results. In many jurisdictions around the globe, public authorities rely on the LEI to evaluate risk, take corrective steps and, if required, minimize market abuse and improve the accuracy of financial data.

It is the prerogative of the authorities acting in individual jurisdictions to mandate the use of LEIs. The Global Legal Entity Identifier Foundation (GLEIF) closely monitors initiatives relevant to legal entity identification in regulatory reporting and supervision.

Each LEI record contains the following information about a company or fund:

• Official name of the legal entity / of the fund manager
• Legal form
• Commercial register number and name of the register
• Legal domicile of the administrative office / of the fund manager
• ISO country code 
• Date of the initial LEI registration
• Date of the last information update
• Additional information may be added in the process of the further development of the standard.

Additional information may be added in the process of the further development of the standard.

Over the past 20 years, the private sector made multiple attempts to create a global entity identification system but struggled to achieve the necessary coordination for a single global solution. Following the 2007-09 financial crisis, leaders from the world’s largest economies, through the G-20 and the Financial Stability Board (FSB), agreed to develop a coordinated solution to overcome these obstacles. This collaboration led to the creation of the global LEI system as a public-interest initiative.

In January 2013, finance ministers and senior financial regulators from the world’s largest economies, through the FSB, entrusted the oversight of the global LEI initiative to the Regulatory Oversight Committee, which consists of over 50 regulators and representatives from around the world.

Each LEI code is assigned by an approved local operating unit, which benefits from local knowledge of infrastructure, corporate organizational frameworks and business practices.

Each LEI is a 20-character alphanumeric code, accompanied by a set of reference data items, used to uniquely identify a legally distinct entity involved in financial market activities. This global standard complies with the 2020 specifications set by the International Organization for Standardization (ISO), as outlined in ISO 17442-1:2020, Legal Entity Identifier (LEI).

The successful operation of the global LEI system relies on the support of the global regulatory community, private sector firms, and industry associations. Regulators oversee the system via the Regulatory Oversight Committee, which provides updates about its activities at www.leiroc.org.

To develop a central operating unit, the committee consulted with the private sector, leading to the creation of the Global LEI Foundation, which assumed operational responsibilities in late 2014. The foundation is governed by a 16-member board of directors, all from the private sector. Its role is to ensure that all entities involved in implementing the LEI adhere to governing principles and standards, such as reliability, quality, and uniqueness — critical to achieving the unified goal of establishing a “golden standard” for the LEI.

Each LEI is assigned by an approved local operating unit, which leverages its local expertise in infrastructure, corporate structures, and business practices.

To obtain an LEI, a company must pay an initial registration fee, followed by an annual maintenance fee to cover the operating costs of these units. Each unit is required to share a portion of the fees with the nonprofit Global LEI Foundation.

Which legal entities are required to have an LEI is determined by national and international laws. It is expected that the LEI will be required globally by many authorities and institutions to better be able to regulate the financial markets.

In accordance with the applicable ISO standards, LEIs may currently only be assigned to legally independent entities, but not to natural persons.

The application process can be initiated online via the WM LEIPORTAL (www.wm-leiportal.org) or the bulk application procedure may be used. An LEI is only assigned after WM Datenservice has conducted a thorough review of the submitted application.

As an applicant, you must meet the following requirements:

At the time of the application, you are either authorized based on your position (e.g. executive, manager, authorized signatory) to apply for an LEI on behalf of your company or the fund controlled by your company

OR

You were authorized by an authorized representative (e.g. executive, manager) by means of a written form of authorization to apply for an LEI.

In its capacity as LEI allocation agency and in accordance with relevant guidelines, WM Datenservice diligently verifies the information submitted in regards to the applicant's identity. Among other things, this verification is based on the data available at the relevant commercial register.

In addition, the LEI application has to be completed by a person listed in the relevant commercial register record and authorized to represent the company, or by a person authorized via a written form of authorization, which was issued by a person listed in the relevant commercial register record and authorized to represent the company. The written form of authorization has to be submitted to us electronically in form of a PDF file.

In case of any data discrepancies, WM Datenservice requires that the original copy of the written form of authorization be submitted. WM Datenservice reserves the right to hold off the allocation of the LEI until the original copy of the written form of authorization has been received.

In order to maintain the highest possible level of LEI data quality, the details you submit as part of the application process will be verified based on the data available from different public sources. This way, we ensure that only correct information is coded and recorded.

We also make sure that an LEI has not already been assigned to the name and / or address of the company / fund you are applying for. If all information appears correct and if no duplicates exist, the LEI is assigned and published. You will be notified automatically via email once the identifier is published.

Each LEI requires profile specific information which is published in the global LEI system.Companies

• Company Name
• Commercial Register
• Legal Form of the Company
• Legal Headquarters
• Administrative Headquarters

Funds

• Fund Name
• Fund Structure
• Fund Type
• Legal Form
• Register of the Fund
• Name and Legal Headquarters of the Asset Management Company
• Custodian

Legal entities under public law

• Name of the Legal Entity of Public Law
• Classification
• Commercial Register
• Legal Headquarters
• Administrative Headquarters

General information like LEI status, date of initial allocation, date of last data change, managing allocation agency, expiration date, etc. is also published.

Additional fields and information can be adjusted through the further development of the standard.

As of May 2017, all companies wishing to apply for and/or to renew their LEIs are required by regulation to provide information on their group structure. Please see the FAQ below for further details.

As supervisory and controlling body of all LEI allocation agencies the Global Legal Identifier Foundation (GLEIF) requires from 1 May 2017 information on the group structure, in other words information on the direct and the ultimate parent. The objective is not only to answer the question "Who is Who?", but also "Who owns Whom?" For details in this regard, please visit the following link: www.gleif.org/en/There are three different profiles available to indicate the group structure. If there exists a parent and you are able to provide the data, this is possible via the two profiles "Parent With an LEI" or "Parent Without an LEI". In case that information on the group structure cannot be provided, this must also be indicated during the application and renewal process.

Until further notice, information on the group structure is only required for companies.

There is currently no information to submit for LEIs in the profiles "Funds" and "Legal Entity of Public Law" as the relevant specifications by the LEI ROC are not yet available. If the abovenamed entity is a joint venture, an associated company, a structured (non-consolidated) company or an international subsidiary, information on the parent is not required.

Direct Parent: The direct parent is defined as the lowest level legal entity that prepares consolidated financial statements (absolutely necessary) that consolidate the abovementioned entity, based on the accounting definition of consolidation applying to this parent.

Ultimate Parent: The ultimate parent is defined as the highest level legal entity (absolutely necessary) that prepares consolidated financial statements that consolidate the abovementioned entity, based on the accounting definition of consolidation applying to this parent.

Upon successful submission of your LEI application, your data record can be accessed via the LEI Search feature. However, at this time no LEI has been assigned yet. Before assigning and publishing the LEI, the Register LEI diligently verifies all data submitted as part of the application process.

Data verification commences when your payment has been received in full. The time required for the data verification process varies from case to case and is dependent on the total current order volume.

Once the data verification process has been successfully completed, your LEI will be published via the WM LEIPORTAL (go to LEI SEARCH | LEI Search and you will be sent an email to confirm the publication along with a link to your LEI record.

Many of the largest multinational banks operate thousands of legal entities worldwide, often with similar names. As the global LEI system grows, it is anticipated to assist regulators and market participants in understanding and documenting these intricate corporate structures and hierarchies.

Data on these relationships can reveal networks of control, ownership, liability, and risks, providing financial regulators with a clearer understanding of how market participants are interconnected. 

Prior to assigning an LEI, we carefully review and verify the information provided by you during the application process. We also check if an LEI has already been assigned by another allocation agency.

Should an LEI have been assigned already, or should we determine that incorrect or incomplete information was provided during the application process, no LEI is assigned or published. We will inform you via email about the reasons of why your LEI application has been denied.

Our LEI-Helpdesk will contact you if we need additional information or clarification regarding your application.

Yes, it is possible for individuals acting in a business capacity (registered merchants; traders registered in the commercial register) to apply for an LEI. Please note that an already existing entry in the respective responsible trade and/or commercial register is required for a successful LEI application and allocation.

A certified extract of the commercial register is a mandatory requirement of the LEI allocation to traders.

As the global LEI gains broader adoption, it is expected to reduce costs and enhance risk management for individual firms as well as the entire financial system. These savings will stem from minimizing transaction failures, lowering the costs of data reconciliation, cleaning, and aggregation, as well as reducing expenses related to regulatory reporting.

The global LEI system will offer long-term advantages to companies by providing clear identification of their counterparties and the customers they serve, simplifying internal risk management. Industry estimates suggest that full adoption of the global LEI system could result in savings of anywhere from $300 million to $10 billion for the financial sector.