A Legal Entity Identifier (LEI) is a unique 20-character alphanumeric code that identifies legal entities participating in financial transactions. LEIs were introduced following the 2008 financial crisis to improve transparency in global financial markets.
Structure
LEIs follow ISO 17442 standard:
- Length: Always 20 characters
- Characters 1-4: Local Operating Unit (LOU) prefix
- Characters 5-6: Reserved (typically "00")
- Characters 7-18: Entity-specific identifier
- Characters 19-20: Check digits (using ISO 17442 algorithm)
Example: 213800ZBKL9QJBUPS454
- 2138: Prefix for London Stock Exchange LOU
- 00: Reserved characters
- ZBKL9QJBUPS4: Entity identifier
- 54: Check digits
Key Characteristics
- Global uniqueness: Each LEI identifies one legal entity worldwide
- Public information: LEI data is publicly accessible via GLEIF
- Entity-level: Identifies organizations, not securities or individuals
- Mandatory: Required for many regulatory reporting obligations
Who Needs an LEI?
LEIs are required for:
- Listed companies and issuers
- Financial institutions (banks, brokers, funds)
- Entities trading derivatives or securities
- Organizations subject to MiFID II, EMIR, or similar regulations
- Private companies engaged in financial transactions
Usage
LEIs enable:
- Regulatory reporting: Transaction reporting, trade repositories
- Risk management: Counterparty identification and analysis
- Entity verification: KYC (Know Your Customer) processes
- Market surveillance: Tracking entity behavior across markets
- Corporate hierarchy: Understanding parent-subsidiary relationships
Relationship to Other Identifiers
| Identifier | What it identifies | Scope |
|---|---|---|
| LEI | Legal entity | Global |
| ISIN | Security/instrument | Global |
| TIDM | Trading symbol | Exchange-specific |
LEI Registry
The Global Legal Entity Identifier Foundation (GLEIF) maintains the global LEI system. Organizations must:
- Apply for an LEI through a Local Operating Unit (LOU)
- Renew annually to keep the LEI active
- Update entity information when changes occur
Data Available
Each LEI record includes:
- Legal entity name
- Registration details and jurisdiction
- Registered address
- Entity status and type
- Parent-subsidiary relationships (Level 2 data)