The Legal Entity Identifier ("LEI") is a 20-character, alpha-numeric code based on the ISO 17442 standard developed by the International Organization for Standardization ("ISO"). The LEI enables clear and unique identification of legal entities globally. Thus far, most companies with a LEI are participating in financial transactions but the uses for LEI codes are growing steadily.
From a LEI code, anyone can answer the questions "who is who" and "whom owns who" by searching the publicly available LEI data pool. Searching the LEI data pool is available and completely free for everyone. This significantly increases transparency in the global marketplace in a manner no other system has done before.
The LEI data pool is unique since it provides standardized information on entities from all over the world. Further, the information in the data pool is registered and verified annually according to the procedures set out by the LEI Regulatory Oversight Committee.
Image source: GLEIF
The Financial Stability Board of the G20 has stated that global LEI adoption supports “multiple financial stability objectives” including improved risk management and better assessment of risks. As a result, it promotes market integrity while reducing market abuse and financial fraud. Perhaps even more valuable in the long-term, the LEI rollout “supports higher quality and accuracy of financial data overall”.
In cooperation with its partners in the Global LEI System, the Global Legal Entity Identifier Foundation ("GLEIF") continues to focus on further optimizing the quality, reliability and usability of LEI data, empowering market participants to benefit from the wealth of information available with the LEI population.
As more companies adopts the LEI standard, the value of the network and the benefits for the wider business community grows. Therefore, all entities are encouraged to register their own LEI. With LeiPass, the process has never been easier.