For a company that makes transactions on the stock market or buying and selling securities a unique international identification code (Legal Entity Identifier) is needed. This due to the Markets in Financial Instrument Directive (MFID2). Even though the directive isn’t new there are few entrepreneurs that actually are aware of LEI and the system around LEI codes. Recently new services for registration of LEI have been launched and the number of registration agents have increased. This makes it easier for companies and organizations to register and renew LEI. Aspecially for those who are not familiar with the regulations.
Legal Entity Identifier (LEI) is a unique identification code that is mandatory for companies and organizations that are active on the securities market. The code is alphanumeric and consists of 20 characters. Each LEI code is unique and can be linked to a specific company or organization. The purpose of the code is to be able to identify legal persons who are active in the securities market and thus be able to maintain transparent reporting.
Register LEI code online
Anyone with a company or organization that are buying or selling securities must have a valid LEI code. This regardless if the company trades in shares, futures, bonds, options or exchange traded funds. The only exception is companies that hold a capital insurance. In this case it’s the insurance company that is the formal owner of the contents of the insurance. In regards to this a LEI code is mandatory for a legal person who is trading with financial instruments.
To register a LEI code is easy and can be done in just a few minutes. There are many good services online for this. An example is Leicertficate.org where you can register an LEI code in just 2 minutes. The registration service is also one of the cheapest one on the market. In order to offer registration and renewal of LEI a permit from GLEIF is required. GLEIF is the organization that stands behind the Legal Entity Identifier system. GLEIF is also handeling the maintainment of the system. The units that have been accredited by GLEIF are called LOU:s. Each LOU is linked to different registration agents and service providers who may provide registration and renewal of LEI. The marketing of these service providers has increased recently. This makes it easier for legal persons to find a suitable service for LEI registration.
Important to renew LEI
The validity of an LEI code is limited and that’s why it’s very important for companies who wish to continue trading to renew their LEI. A LEI code is valid a year and then a renewal is required. To renewal a LEI code is as easy as it is register one. The alphanumeric code remains the same but the validity period extends. With the new registration and renewal services found online, it is now possible for companies to renew a LEI code for several years at a time. It is then the service provider that ensures that the code is renewed every year during the period for which the company has paid for. In this way, entrepreneurs do not have to spend time and effort to manage the process themselves each year. Instead they can focus a 100% on their business.