The Legal Entity Identifier (LEI) is a unique 20-digit alphanumeric code that plays an important role in identifying legal entities participating in financial transactions on a global scale. As financial markets grow increasingly complex and interconnected, the LEI system provides a standardized approach to identifying entities, thereby promoting transparency, reducing the risk of financial fraud, and enhancing regulatory oversight. Each LEI code acts as a digital identity card for a company, making it easier for regulators, financial institutions, and counterparties to verify the identity of legal entities involved in financial dealings. This system is not only essential for maintaining market integrity but also for fostering trust in the global financial ecosystem.
The full form of LEI is Legal Entity Identifier, and it is designed in compliance with the ISO 17442 standard, developed by the International Organization for Standardization (ISO). This standardized format ensures that each entity’s identity can be clearly and consistently recorded across jurisdictions. Unlike regional identifiers such as the Corporate Identification Number (CIN) issued in India or the Company Registration Number (CRN) used in other countries, the LEI offers a globally recognized format that transcends national boundaries. It provides key reference information, including the legal entity’s official name, registered address, country of incorporation, and details about ownership structure if applicable. This transparency makes it easier to assess the risk exposure of counterparties, track systemic risks, and ensure that firms are compliant with international financial regulations.
The issuance and management of LEIs are handled by organizations known as Local Operating Units (LOUs), which are accredited by the Global Legal Entity Identifier Foundation (GLEIF). GLEIF is a non-profit organization established to oversee the implementation and use of the LEI system globally.
It is important to highlight that since 3rd January 2018, the possession of a valid LEI code has become mandatory for all legal entities that wish to continue trading in securities, including stocks, bonds, and other listed financial instruments. Obtaining an LEI code is now a mandatory requirement for a wide range of financial transactions, especially those involving derivatives, debt instruments, and cross-border investments. Regulatory bodies such as RBI, SEBI, and IRDAI have made LEI registration compulsory for specific categories of entities to enhance transparency in the financial ecosystem. To simplify the registration process, service providers like Compliance Calendar offer expert guidance and support, helping businesses obtain their LEI code and certificate quickly and efficiently. These services ensure that entities remain compliant with regulatory requirements without the burden of navigating complex procedures.
The LEI code serves as a main part in the global movement towards financial transparency, standardization, and risk reduction. Whether you’re a multinational corporation, a bank, a non-banking financial company, or a startup involved in financial transactions, securing an LEI is not just a regulatory formality—it’s a strategic step towards responsible and recognized participation in the global economy
Structure of the LEI Code
The Legal Entity Identifier (LEI) is a unique 20-character alphanumeric code that serves as a global identification number for legal entities engaged in financial transactions. Its structure is not arbitrary but is carefully designed according to the ISO 17442 standard, ensuring a uniform and universal identification system across countries and jurisdictions. The format of the LEI enhances transparency, prevents duplication, and facilitates regulatory oversight.
The LEI code is divided into four distinct parts, each serving a specific purpose:
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Characters 1–4: Local Operating Unit (LOU) Identifier
The first four characters of the LEI represent the Local Operating Unit (LOU) that issued the code. LOUs are authorized organizations accredited by the Global Legal Entity Identifier Foundation (GLEIF) to register and renew LEIs. Each LOU is assigned a unique prefix. This part of the code allows regulators and users to trace which LOU was responsible for issuing a particular LEI, thereby ensuring accountability and operational transparency.
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Characters 5–6: Reserved Characters ("00")
The fifth and sixth characters are always set to "00". These are reserved for potential future use as the LEI system evolves. This reservation allows flexibility for expansion or additional coding requirements without disrupting the existing format. It also acts as a marker to differentiate the LEI from other codes used in financial systems.
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Characters 7–18: Entity-Specific Unique Identifier
These twelve characters form the core of the LEI code, uniquely identifying the legal entity. This string is assigned by the LOU based on specific data about the legal entity, such as its name, registered address, registration number, and jurisdiction. No two legal entities, regardless of location or type, will share the same combination in this segment, ensuring that each entity has a globally unique LEI.
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Characters 19–20: Check Digits
The last two characters are check digits calculated using the ISO 17442 modulus algorithm. Their purpose is to validate the integrity of the LEI code by detecting typographical or data entry errors. If any part of the LEI is altered unintentionally, the check digits will fail to validate, prompting corrective action.
The LEI code is thoughtfully structured to serve its role in the global financial system. Its standardized format facilitates trust, enhances data accuracy, and supports international financial transparency and risk management.
Importance of LEI Registration
The Legal Entity Identifier (LEI) registration system plays an important role in today’s complex and interconnected global financial ecosystem. Designed to provide unique and consistent identification of legal entities involved in financial transactions, the LEI system was introduced following the 2008 global financial crisis. Its primary goal is to enhance transparency, improve risk management, and support financial market stability.
LEI is a 20-character alphanumeric code that provides essential reference information about a legal entity, such as its name, address, registration number, and ownership structure. The Global Legal Entity Identifier Foundation (GLEIF) manages the system, ensuring global consistency and accessibility. Over the years, LEI registration has become an integral part of regulatory compliance and financial reporting across many jurisdictions, including India.
Why LEI Registration is Important?
1. Transparency in Financial Transactions
One of the main objectives of LEI registration is to ensure transparency in financial markets. LEIs help in accurately identifying the legal entities behind transactions, enabling regulators, investors, and counterparties to know exactly with whom they are dealing. This reduces uncertainty, enhances data quality, and prevents the use of multiple identities for fraudulent or non-compliant activities. Publicly available LEI data enables anyone to verify the authenticity and basic details of a legal entity.
2. Improved Risk Management
LEIs are instrumental in managing credit, market, and counterparty risks. Banks, financial institutions, and regulators use LEIs to map exposures to specific entities, analyze concentration risks, and monitor systemic risks. Accurate identification of counterparties helps institutions assess risk more effectively and respond to market developments with greater confidence. It also assists in avoiding duplicate or incorrect entity data in risk management systems.
3. Regulatory Compliance
Many jurisdictions around the world, including India, have made LEI registration mandatory for certain financial transactions. Regulatory bodies such as the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), and others require LEIs for transactions in derivatives, forex, large corporate borrowings, and bond markets. Without a valid LEI, entities may face restrictions or penalties, making registration a legal necessity for compliance.
4. Strengthening Market Integrity
The LEI system enhances the integrity and credibility of financial markets. When all participants are uniquely and consistently identified, it builds trust among investors and financial institutions. Clear identification reduces the scope for ambiguity or manipulation and contributes to a more resilient financial ecosystem. It also supports global efforts toward a more transparent and efficient financial infrastructure.
5. Fraud Detection and Prevention
LEIs help prevent fraud by making it easier to detect unusual patterns or suspicious entities. Since LEI information is centralized and publicly accessible, it becomes easier for auditors, regulators, and businesses to verify the legitimacy of trading partners or borrowers. This not only minimizes the risk of fraudulent activities but also supports due diligence and Know Your Customer (KYC) procedures.
Global Legal Entity Identifier Foundation (GLEIF)
The Global Legal Entity Identifier Foundation (GLEIF) is a not-for-profit organization established by the Financial Stability Board (FSB) in June 2014. Its primary mission is to support the implementation and use of the Legal Entity Identifier (LEI) globally. GLEIF is headquartered in Basel, Switzerland, and is supervised by the Regulatory Oversight Committee (ROC), a group of public authorities that promote transparency and standardization in the global financial system.
GLEIF plays a pivotal role in managing and maintaining the global LEI system, ensuring its integrity, reliability, and openness. It works in collaboration with Local Operating Units (LOUs) — accredited organizations responsible for issuing and maintaining LEIs for legal entities in various jurisdictions. The LEI system, developed in response to the 2008 global financial crisis, aims to create a transparent and consistent method of identifying legal entities participating in financial transactions.
Core Functions of GLEIF
GLEIF ensures the availability of open, accurate, and up-to-date LEI reference data to the public. The data includes information such as the name of the legal entity, address, country of registration, legal form, and parent-subsidiary relationships (Level 1 and Level 2 data).
The foundation is committed to promoting data quality and reliability through regular performance checks, certification procedures for LOUs, and public feedback mechanisms. It serves as a central hub for disseminating LEI-related resources, enabling regulators, financial institutions, businesses, and the public to make informed decisions based on verifiable data.
Legal Entity Identifier Services by GLEIF
GLEIF offers a complete suite of services designed to enhance the usability, accessibility, and transparency of LEI data worldwide. These services make it easier for stakeholders to explore, analyze, and verify legal entity information on a global scale.
LEI Search
One of GLEIF’s most widely used services is the LEI Search Tool, which allows users to search the global LEI data pool in real time. The Global LEI Index is the world’s only central repository of open, standardized, and high-quality legal entity reference data. It includes all LEIs issued to date, along with the corresponding entity information.
Any individual—whether a financial analyst, compliance officer, regulator, or business owner—can access this search engine to verify the authenticity of legal entities. This fosters transparency and promotes informed decision-making across financial markets.
LEI Statistics
GLEIF also provides interactive statistics and data visualizations on the global LEI population. Through user-friendly graphs and a world map, stakeholders can explore vital metrics such as:
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Total LEIs issued to date
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LEI issuance trends across countries
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LEI renewal rates and lapsed records
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Relationship data showing parent-subsidiary linkages
This data is essential for regulators, analysts, and journalists who want insights into how LEI adoption is growing globally and within specific regions or industries.
LEI Challenge Facility
To maintain the quality and accuracy of the global LEI dataset, GLEIF offers the LEI Challenge Facility. This tool enables any interested party to challenge and request the verification or correction of LEI reference data if inconsistencies are found. This includes both Level 1 (who is who) and Level 2 (who owns whom) data.
For example, if a company’s legal name or address is outdated, or if its ownership relationships are not properly reflected, users can initiate a challenge. The respective LOU is then required to verify and update the data promptly, ensuring the system remains accurate and current.
This collaborative data correction mechanism sets the LEI system apart from other identification systems, making it a dynamic and self-improving global registry.
GLEIF Advantage
By centralizing, standardizing, and maintaining the global LEI system, GLEIF empowers financial institutions, regulatory authorities, and businesses to reduce operational risk, comply with regulations, and foster trust in financial transactions.
Its services support:
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Anti-money laundering (AML) and Know Your Customer (KYC) initiatives
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Risk management by financial institutions
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Data integrity and reporting compliance for regulators and auditors
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Due diligence and supply chain validation for global businesses
The Global Legal Entity Identifier Foundation is not just a data provider—it is a global enabler of financial transparency, security, and efficiency. Through tools like LEI Search, LEI Statistics, and the LEI Challenge Facility, GLEIF ensures that the global LEI system remains reliable, open, and future-ready. As financial markets continue to evolve, the role of GLEIF in supporting regulatory frameworks and promoting trust will only grow stronger.
Who is Eligible for LEI Registration?
The Legal Entity Identifier (LEI) is a globally recognized identification number that uniquely represents a legal entity participating in financial transactions. Introduced under the ISO 17442 standard and overseen by the Global Legal Entity Identifier Foundation (GLEIF), the LEI system enhances transparency, compliance, and trust across global financial markets. As of 2025, the eligibility criteria for LEI registration are broad and inclusive, aiming to ensure that all entities involved in financial transactions can be distinctly identified.
Eligible Entities for LEI Registration
Any legal entity that engages in financial activities or is required to report to a financial authority is eligible—and in many cases, required—to obtain an LEI. This includes but is not limited to:
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Companies and Corporations
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Financial Institutions
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Government Bodies and Public Sector Entities
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Non-Profit and Charitable Organizations
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Partnership Firms and LLPs
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Sole Proprietorships (Subject to Certain Conditions)
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International Branches and Subsidiaries
Regulatory Requirement in India
In India, regulatory authorities like the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have mandated LEIs for:
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Large corporate borrowers (?5 crore and above)
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Participants in Over-The-Counter (OTC) derivative markets
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Participants in bond markets, and those dealing in foreign exchange
Benefits of LEI Code for Businesses
The Legal Entity Identifier (LEI) has emerged as an important tool for businesses monitoring the evolving the sector of regulatory compliance and international finance. While its adoption is often driven by regulatory requirements, the strategic advantages it offers go well beyond compliance. For Indian businesses, especially those aiming to expand globally or engage in high-value transactions, obtaining an LEI code is a smart and forward-thinking move.
Here are the key benefits of an LEI code for businesses:
Global Recognition and Enhanced Credibility
An LEI code boosts a company’s credibility and visibility in the global financial market. Since the LEI is a globally accepted identifier standardized under ISO 17442, having one helps businesses establish trust with foreign investors, financial institutions, and partners. It signifies that the company is compliant with international standards and has verifiable corporate identity data maintained in a global public database. This is particularly useful for Indian companies seeking to attract foreign direct investment (FDI), enter new markets, or collaborate with international firms.
Faster Transaction Approvals
Many banks and financial institutions across the globe now require businesses to submit their LEI code when processing high-value or cross-border transactions, including foreign exchange dealings, derivatives, and large corporate borrowings. With an LEI in place, businesses experience fewer delays and smoother approvals, as the code helps financial institutions quickly verify the legal status and ownership of the transacting party. This leads to quicker processing and reduced administrative hassles.
Regulatory Alignment with SEBI, RBI, and Global Norms
In India, regulatory authorities such as the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) have made LEI mandatory for specific financial activities. This includes participation in the bond and derivatives markets, forex transactions, and for borrowers availing credit of ?5 crore and above. Having an LEI code ensures that the business is fully compliant with these evolving mandates, avoiding penalties and interruptions in financial dealings.
Improved KYC and Risk Management
LEI simplifies Know Your Customer (KYC) procedures by providing a single, verifiable source of information about a legal entity. Financial institutions and partners can easily confirm ownership structures, registration status, and other critical details, leading to improved risk assessment and smoother onboarding processes.
Greater Transparency in Dealings
With public access to the LEI database, stakeholders such as regulators, investors, suppliers, and clients can easily assess a company’s financial identity and ownership relationships. This level of transparency helps build trust and supports informed decision-making, especially in mergers, acquisitions, and financial disclosures.
Procedure to Obtain a Legal Entity Identifier (LEI)
To obtain a Legal Entity Identifier (LEI), the process begins with document preparation. The applicant must collect all the necessary documents based on the legal structure of the entity. This may include a Certificate of Incorporation, PAN card, a board resolution or power of attorney authorizing an individual to act on behalf of the entity, and any other regulatory documents as specified by LEIL. The documents must be in the prescribed format and clearly legible for verification purposes.
The next step is self-registration, where an authorised person is appointed to handle the entire LEI registration process. This person must be officially authorised through a resolution or power of attorney. The individual will create an account on the LEIL portal using their email ID and provide necessary details in the form. The application allows for a primary user, who submits the form, and secondary users, who act as additional authorised contacts for the process.
Once registration begins, the applicant is required to fill in the company information page. This section collects essential details such as the entity’s legal name, registered office address, incorporation date, entity type, and identifiers like PAN and CIN. These inputs must match the information provided in the uploaded documents. Following this, the holding company page captures information about any parent or holding company, including its legal name, jurisdiction, and LEI (if available), to ensure ownership relationships are transparent and traceable.
If the entity is a step-down subsidiary, the applicant must also complete the parent page, where they provide details of the ultimate parent entity, including its name, registration details, and LEI if it exists. If the entity has no parent, it must file a declaration citing reasons such as legal or operational constraints. After all entity-related data is entered, the applicant proceeds to the payment step, where the LEI registration fee is paid online via digital payment methods or through a Demand Draft (DD) if preferred.
Following payment, the applicant proceeds to the document upload section, where all required documents prepared earlier are submitted. The portal allows a total upload size of 40 MB, and the files must be in PDF or image format. After uploading, the user completes the final submission, confirming that all information and documents are accurate and complete.
The application then moves into the verification stage, where LEIL reviews all submitted data and documents. If any discrepancies or missing information are identified, LEIL may request additional documents or ask the applicant to correct the application. Once all validations are complete, and the application is approved, LEIL proceeds with the issuance of the LEI code. The unique 20-digit LEI is sent to the registered email address of the applicant and is also made publicly available in the GLEIF database. This code must then be used in financial transactions, regulatory filings, or dealings with banks as required.
Renewal of LEI Code
The Legal Entity Identifier (LEI) is a unique 20-character alphanumeric code assigned to legal entities engaged in financial transactions. Once issued, the LEI remains valid for a period of one year from the date of issuance. To maintain its active status, the entity must renew the LEI code annually or opt for multi-year renewal options. Failing to renew the LEI on time may result in the code being marked as “Lapsed,” which can cause issues in regulatory compliance and financial transactions.
The renewal process involves updating and verifying the legal entity’s data in the LEI database. This includes confirming whether the entity’s name, registration details, address, or parent-subsidiary relationships have changed. If there are any updates, the applicant must submit the necessary documents during the renewal process. The purpose of renewal is to ensure that the data linked to the LEI remains accurate, current, and reliable.
To facilitate flexibility and ease of compliance, it has three renewal duration options:
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1-Year Renewal: This is the standard and most commonly chosen option. The LEI is renewed every year by submitting the required documents and paying the annual renewal fee. This option suits businesses that prefer short-term financial planning or want to assess their operational needs on a yearly basis.
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3-Year Renewal: Entities that prefer less frequent administrative efforts can opt for a three-year renewal plan. This allows the LEI to remain active for three consecutive years without the need for annual intervention. The upfront payment covers the entire duration, and LEIL undertakes the responsibility of maintaining and verifying the entity’s data during this period.
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5-Year Renewal: For long-term planning and hassle-free compliance, businesses can choose the five-year renewal option. It eliminates the need for yearly submissions and payments, offering a cost-effective and time-saving alternative. Like the 3-year plan, LEIL will conduct periodic verification to ensure the data remains valid throughout the term.
Renewing your LEI code on time is essential, especially for businesses engaging in regulated financial markets or high-value transactions. An active LEI ensures smooth dealings with banks, regulators, and financial institutions. Therefore, selecting the appropriate renewal duration based on your business needs not only helps maintain compliance but also enhances your credibility in the global financial ecosystem.
LEI Requirement for Borrowers
As per the latest directions issued by the Reserve Bank of India (RBI), the mandate for obtaining a Legal Entity Identifier (LEI) has been extended to include borrowers availing large credit exposures from financial institutions. The requirement now also applies to Primary Urban Co-operative Banks (UCBs) and Non-Banking Financial Companies (NBFCs). Specifically, non-individual borrowers (such as companies, Partnership firms, LLPs, etc.) who have an aggregate exposure of ?5 crore or more from banks and financial institutions must obtain a valid LEI code.
The term "aggregate exposure" includes both fund-based and non-fund-based credit facilities, such as loans, advances, guarantees, and investments made by financial institutions in favor of the borrower. While calculating this exposure, the higher value between the sanctioned limit and the outstanding balance is considered. Lenders are instructed to determine the total exposure using either their own records, information from the Central Repository of Information on Large Credits (CRILC), or a declaration provided by the borrower.
It is important to note that failure to obtain an LEI will have significant consequences for borrowers. In such cases, the concerned borrower will not be eligible for the sanction of any new credit facility, nor will they be allowed to renew or enhance any existing credit limit. This move is aimed at strengthening the credit risk monitoring framework and enhancing transparency in the lending ecosystem.
However, departments and agencies of the Central and State Governments (excluding Public Sector Undertakings registered under the Companies Act or incorporated under specific statutory provisions) are exempted from this requirement. This exemption acknowledges their unique structure and statutory responsibilities that differentiate them from commercial legal entities.
These directions have been issued under various statutory provisions including Section 21, 35A, and 56 of the Banking Regulation Act, 1949, Sections 45JA and 45L of the RBI Act, 1934, Section 30A of the National Housing Bank Act, 1987, and Section 6 of the Factoring Regulation Act, 2011. The intent behind this regulatory initiative is to promote better identification, tracking, and assessment of borrowers and ensure that financial institutions operate with greater risk awareness and due diligence.
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