What is Legal Entity Identifier (LEI) and its Purpose – 2023
Introduction About Legal Entity Identifier (LEI)
LEIL has been recognized by the Reserve Bank of India as an “Issuer” of Legal Entity Identifiers under the Payment and Settlement Systems Act 2007 (as amended in 2015).” LEIL has been Accredited by the Global Legal Entity Identifier Foundation (GLEIF) as a Local Operation Unit (LOU) for issuance and management of LEI’s.
The Legal Entity Identifier (LEI) is a 20-character alpha-numeric code used to uniquely identify parties to financial transactions worldwide. It has been implemented to improve the quality and accuracy of financial data reporting systems for better risk management. It is used to create a global reference data system that uniquely identifies every legal entity in any jurisdiction that is party to a financial transaction.
Why Legal Entity Identifier (LEI) required for your organization?
The Legal Entity Identifier (LEI) is a global reference number that uniquely identifies every legal entity or structure that is party to a financial transaction, in any jurisdiction.
LEIL will assign LEIs to any legal identity including but not limited to all intermediary institutions, banks, mutual funds, partnership companies, trusts, holdings, special purpose vehicles, asset management companies and all other institutions being parties to financial transactions.
LEI will be assigned on application from the legal entity and after due validation of data. For the organization, LEI will
- Serve as a proof of identity for a financial entity
- Help to abide by regulatory requirements
- Facilitate transaction reporting to Trade Repositories
Also Read-How to apply Online for Import Export Code (IEC) 2023?
What is the Legal Entity Identifier (LEI) code?
The structure of the global LEI is determined in detail by ISO Standard 17442 and takes into account Financial Stability Board (FSB) stipulations.
LEIL as an LOU
The parent Company CCIL, offers a host of services that enables trading on sophisticated Trading Platforms, reporting trades to a comprehensive Trade Repository, settle the trades on a guaranteed basis through its CCP services and enjoy a range of post-trade services. At every stage, the LEI will be a useful value-addition. LEIL uses its parent company’s expertise in trading, reporting and settlement engines to bring to you LEI web portal that provides a number of benefits:
- Self-registration – Set yourself up quickly and simply.
- Advanced search and filter including foreign LEIs – helps you find the information you need quickly.
- Challenges – assists with the proactive maintenance of entity data.
- Easy to use interface – User Guide, FAQs and very little training required.
- Accuracy and reliability – Rigorous duplicate check from consolidated database from other LOUs.
Who needs to apply for Legal Entity Identifier (LEI) codes?
An entity registered in India needs to apply for LEI code from time to time. The list of entities eligible to apply for Legal Entity Identifier (LEI) codes are but not limited to Sole Proprietorships, Limited Liability Partnerships, Partnership Firms, Trusts, Private Limited Companies, Public Limited Companies, Government Companies, One Person Company, Insurance Companies, Housing Finance Companies, Non-Banking Finance Companies, Non profit companies, Special Purpose Vehicles – ARC Trusts, Special Purpose Vehicles – Companies,
SPV – Partnership Firms, SPV – Co-operative Societies or Multistate Co-operative Societies Mutual Fund, Mutual Funds-Sub Scheme, Pension Fund, pension Fund Sub-Scheme, Alternative Investment Fund (AIF), AIF- Sub Scheme, Nationalized Banks, Scheduled Urban Cooperative Bank, RRBs, Payment Banks, Banking Companies – Others, Stand Alone Primary Dealers, Public Financial Institutions, Unlimited Companies, Cooperative Societies or Multistate Cooperative Societies, Government Organizations, Companies Limited by Guarantee, Provident/Superannuation/Gratuity/Insurance Fund, HUF, etc. Other entities as may be specified from time to time.
Industry Classification- Legal Entity Identifier
If you want to know about industry classification under Legal Entity Identifier- it is mandatory to select the industry classification as per your organization, if you don’t know about industry classification, then click on link given here- Industry classification.
How Legal Entity Identifier (LEI) help for Financial Transaction?
Legal entity identifier (LEI) is mandatory for transactions in interest rate, forex and credit derivative market. The Reserve Bank of India (RBI) has also made LEI compulsory for companies and organizations having aggregate fund-based and non-fund-based exposure of credit over RS 50 crore.
| Total Exposure to SCBs | To be completed by |
| Above ₹25 crore | April 30, 2023 |
| Above ₹10 crore, up to ₹25 crore | April 30, 2024 |
| ₹5 crore and above, up to ₹10 crore | April 30, 2025 |
Schedule for Implementation of LEI in the Money market, G-sec market and Forex market
| Phase | Net Worth of Entities | Proposed deadline |
| Phase I | above Rs.10000 million | April 30, 2019 |
| Phase II | between Rs.2000 million and Rs 10000 million | August 31, 2019 |
| Phase III | up to Rs.2000 million | Extended from March 31 2020 to September 30 2020 |
Legal entity identifier will help banks and credit providers in monitoring the exposure of corporate borrowers. It will prevent banks from issuing multiple loans against the same collateral. Companies can order LEI from any Local Operating Unit or use the help of service providers such as Registration Agents. LEI REGISTER is an LEI Registration Agent. Our main task is to help companies in India to apply for an LEI in a prompt and easy way.
Documents Required for Legal Entity Identifier (LEI) Registration
For all legal entity documents- click here
Mandatory Documents for Identity Verification
| Sr. no. | Particulars | Optional/Mandatory | Checklist (please ✔documents ready to submit to LEIL) |
| 1 | Letter of Authority as per format specified by the LEIL | Mandatory | |
| 2 | Audited Financial Statements of the legal entity for the last financial year or link to its website showing its financials. | Mandatory | |
| 3 | If you have holding company, please provide the following:
Audited Consolidated Financial Statements of the direct and/or ultimate parent OR Auditor’s Certificate (Please check “Legal Docs Download” Tab for the template after logging in LEIL website) |
Conditional Mandatory | |
| 4 | Shareholding pattern on company’s letterhead if not provided in the Audited Financial Statements | Conditional Mandatory |
Fee Structure for Legal Entity Identifier (LEI) Registration
You can choose any payment (single/multiyear) option as follows:
- Amount for one year – 5,015/- (4250/- plus GST @ 18%) for New Applications –
- Amount of Rs 3,540/- (3000/- plus GST @ 18%) for Renewal Application
LEI Number is valid for one year. LEIL shall send reminder email well in advance in case of single year payment or multi-year payment to submit required documents before the due date In the multi year option,
if the validity of LEI extends beyond the end -date of contract for which term the multi- year fee payment is made due to non submission of required documents for renewal in time, an additional fee of Rs 250/- per month will be levied for the period for which it extends the end date . Entities are, therefore, requested to submit the required documents timely.
Fee Structure at the time of Renewal.
How to register Legal Entity Identifier (LEI) online?
For Register LEI (Legal Entity Identifier), you may contact to YMW FINANCIAL TEAM on 08298057771.
YMW FINANCIAL team will help you to obtain the Legal Entity Identifier (LEI) Registration.
If you want to do LEI Registration by itself then click on following link- click here and follow below video-
FREQUENTLY ASKED QUESTIONS- Legal Entity Identifier
- What is Legal Entity Identifier and what is its purpose?
Ans. The Legal Entity Identifier (LEI) is a 20-character alpha-numeric code used to uniquely identify parties to financial transactions worldwide. It has been implemented to improve the quality and accuracy of financial data reporting systems for better risk management. It is used to create a global reference data system that uniquely identifies every legal entity in any jurisdiction that is party to a financial transaction.
It can be obtained from any of the Local Operating Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF), the body tasked to support the implementation and use of LEI. In India, LEI can be obtained from Legal Entity Identifier India Ltd. (LEIL) (https://www.ccilindia-lei.co.in/), which is also recognized as an issuer of LEI by the Reserve Bank of India (RBI).
- Which transactions should include LEI information?
Ans. All single payment transactions of ₹50 crore and above undertaken by entities (non-individuals) should include remitter and beneficiary LEI information. This is applicable to transactions undertaken through the NEFT and RTGS payment systems.
In case of RTGS, both customer payment and inter-bank transactions meeting the above criterion should include LEI information.
- Is LEI required for Central Government or State Governments or Departments and Ministries thereunder?
Ans. It is not necessary for Governments or their Departments / Ministries to obtain LEI or mention LEI number for payment transactions in NEFT and RTGS. However, Corporations / Undertakings, including those fully owned by the Government, shall need to obtain LEI. All single payment transactions of ₹50 crore and above of Government Undertakings and Corporations, through NEFT / RTGS, shall include remitter and beneficiary LEI information.
- Is LEI required for individual customer transactions?
Ans. No, LEI is not required for customer transactions where both remitter and beneficiary are individuals. For transactions, where either or both parties are non-individual/s, LEI will be required.
- What are the technical guidelines for populating LEI in NEFT and RTGS and messages by member institutions?
Ans.
- In NEFT payment messages, the field 7495 is a free format optional field consisting of 6 lines with 35 characters each with alphanumeric options. The first two lines of this field hall be used for capturing sender and beneficiary customer LEI information, in that order, where applicable and available. When LEI information is captured, narration, remarks, etc., shall be part of last 4 lines of the field. The sender and beneficiary information shall be captured in following format:
7495: line 1 -> SL/20 digit sender LEI/
line 2 -> BL/20 digit beneficiary LEI/
- In RTGS customer payment and inter-bank messages, the optional field “<-RmtInf->” has 4 repeat tags with each having 140 characters. The first two loops of this field shall be used for capturing sender and beneficiary customer LEI information, in that order, where applicable and available. When LEI information is captured, narration, remarks, etc., shall be part of last two repeating loops of the field. The sender and beneficiary information shall be captured in following format:
<-RmtInf-> loop 1 -> /SL/20 digit sender LEI/
loop 2 -> /BL/20 digit beneficiary LEI/
- What are the types of accounts for which LEI should be recorded?
Ans. LEI shall be recorded for all non-individual NEFT / RTGS messages / transactions. An indicative list of entity types is given by LEIL at https://www.ccilindia-lei.co.in/Documents/FAQs.pdf.
- Is it required to capture counterparty LEI information i.e., Remitter in case of inward and Beneficiary in case of outward transactions by banks?
Ans. The remitting bank should ensure that LEI information for both sender and beneficiary is captured. Any inward transaction with inappropriate or no LEI should not be rejected by beneficiary bank. However, post-credit, both remitting and beneficiary banks should maintain valid and verified LEI information for all payment transactions of ₹50 crore and above.
- Whether day to day operational transactions of ₹50 crore and above carried out by financial institutions like sub-member banks / banks / BCs / WLAs, etc., are excluded from the purview of the guidelines?
Ans. Response to Q.No.2 may be referred to for the applicable types of transactions.
- Whether LEI would be applicable for transactions initiated by banks for their internal payments, loan disbursement to their corporates, term deposits, maturity proceedings, account closure proceedings, etc.
Ans. Response to Q.No. 2 may be referred to for the applicable types of transactions.
- Is this change in format applicable for WEB-API messages?
Ans. The LEI instructions are applicable to all the channels being used for connecting to RTGS viz. thick-client, Web-API (through INFINET or any other approved network) and Payment Originator (PO) module
