Legal Entity Identifier (LEI)
What is a legal entity identifier (LEI)?
A Legal Entity Identifier or LEI number is a unique 20-digit code that can be issued to companies, trusts, and entities that need to participate in financial transactions. A LEI number contains information about the structure of an organization, which improves transparency in the financial markets.
Why was the LEI created?
The financial crisis of 2007-08 made financial institutions around the world realize that the identification systems that existed at that time were not adequate to clearly recognize all the details of the transactions they carried out with different legal entities. This made it impossible to weigh the risks involved, placing financial institutions in a vulnerable position. To avoid another financial crisis as a result of this, the G20 decided to create this LEI system in 2011.
Who needs a LEI?
Any legal entity may request a LEI: A corporation, an association, a trust, a non-profit organization, and any other entity recognized by law.
LEIs are required by any legal entity that participates in financial transactions or that operates within the current financial system. There are currently a number of regulations in Europe and other jurisdictions that establish that entities must have a LEI to execute financial transactions. LEI requirements vary by country, legal jurisdiction, or business activity. It is the prerogative of the authorities operating in each individual jurisdiction to order the use of LEI.
If you require your entity to obtain a LEI, the FABREGA MOLINO MANAGEMENT team can complete the entire registration process on your behalf expeditiously and carry out the initial validation. After the presentation, we follow up as needed, until a LEI is assigned, usually within 3-5 business days. We also follow up and update any information for the annual renewal required to ensure that your LEI remains active at all times.