The Legal Entity Identifier (LEI) is a global and unique code based on the ISO 17442 standard, which is used to identify legal persons (companies) that are parties to financial transactions and to comply with the information requirements in financial markets.
Keep in mind that on January 3, 2018, the Financial Instruments Markets Directive, better known as Mifid II, enters into force throughout Europe. Among other regulatory changes, this new community norm will force all legal entities (companies, associations, foundations ...) that want to operate in the financial and stock markets to have to search LEI Code in force.
What is the LEI code?
The LEI code is a 20-character alphanumeric global code designed in particular for those organizations that are part of a financial contract as it uniquely identifies legal entities.
It is unique, permanent, consistent and portable by each entity. The format of the international LEI standard is based on the specifications provided by ISO 17442 and follows the following pattern:
Prefix; Reserved Digits; Random alphanumeric code; Control digits -> 9598 (*) 00 N60CEGKTATBG 90
(*) 9598 is the prefix assigned to the Spanish LOU by the Regulatory Oversight Committee (ROC), which consists of more than 50 financial regulators from around the world and a wide variety of public sector organizations and is responsible for monitoring the system I READ.
Each LEI Record contains the following information about the entity:
Official name
Legal address
Royal domicile of the entity's headquarters
Country / region of legal jurisdiction
Social form
Number in the Registry of entities and name of the Registry
LEI code of the LOU responsible for the entity's LEI Registry
LEI initial registration date
Date of last data update
Date and reason for termination of the LEI
Who must have the LEI?
All legal entities that participate in financial markets must provide their LEI to investment services companies and credit institutions that execute transactions on financial instruments so that they can identify them before executing operations. If the client does not provide his LEI, the instructed operations cannot be executed.
Forced
- Banks and financial companies
- Entities that issue shares, debt or securities for other capital structures
- Publicly traded entities
- Entities that trade stocks or debt
- Means of investment, including investment funds, pension funds and alternative investment means constituted as corporate entities or collective investment agreements (umbrella funds, hedge funds, venture capital, etc.)
- Entities under the supervision of a financial regulator and its affiliates, subsidiaries and portfolio companies
- Counterparties for financial transactions
Currently, private and branch offices cannot be assigned a LEI code.
Where
Its issuance and management in Spain are attributed to the Mercantile Registry.
The Commercial Registrars are responsible for managing and issuing the LEI code, through the application form published on the website of the Association of Registrars of Spain. This form must indicate whether it acts on behalf of your entity or on behalf of a third party, etc. ...
Cost
Once completed, the corresponding fees must be paid, set at 100 euros
Time for grant
Obtaining the LEI code is not immediate. The processing period can be extended up to 15 business days, although the usual, as indicated in the College of Registrars, is that "does not exceed four." In this period the registrar proceeds to verify that the data is true, as well as that the applicant no longer has an active LEI code or that there are other ongoing requests for the same entity.
The Spanish banking sector has expressed its concern about the possibility that in the last days of the year the majority of requests from companies and other institutions that want to obtain their LEI are crowded and that this prevents the fulfillment, in time, of this obligation.
Duration
Annual. Each exercise must be requested for renewal. To do this, the corresponding form must be completed and a fee of 50 euros paid.
Breach
The consequences of not having this code and informing the investment services entity or credit institution through which financial operations are carried out may result in the impossibility of operating in the market. This will also apply to issuers that do not report their LEI code to the markets in which they have their securities admitted to trading.
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