What is LEI?
Legal Entity Identifier (LEI) — is a unique code, assigned to the legal entity in accordance with ISO 17442 standard and used when participating in the financial markets transactions and financial reporting.
Regulatory Oversight Committee (ROC) is an international authority, supervising LEI assignment and maintaining global system of legal entities identification (Global Legal Entities Identifier System, GLEIS). Regulatory Oversight Committee functions under and regulated by the Financial Stability Board (FSB). ROC acting in its capacity of the regulator established Global LEI Foundation (GLEIF) and authorized it to maintain and evolve Global LEI System. GLEIF is also obliged to accredit organizations seeking to operate as Local Operating Units (LOUs) — issuers of LEIs and custodians of LEI reference data.
Presentation: “Legal Entity Identifier. Reasons for implementation, benefits and code receiving procedures”
Reasons for implementing LEI initiative
International community, and G20 countries in particular, has been working for some time on implementation of unified codification and identification international standards for financial and capital markets in order to unify formats for data exchange between market participants.
International financial crisis in 2008–2009 has changed this process by adding to the need for unification of financial operations formats more demand for transparency of companies, participating in such operations and ensure control and risk management for regulators and supervision authorities.
In order to fulfill this task, G20 decided to create a global system of legal entities identifiers, which should allow not only to determine uniquely participants of financial transactions, but to estimate transactions financial risk and risk of the company, participating in such transactions. G20 authorized Financial Stability Board to develop international infrastructure, which, under ROC supervision, shall fulfill this task.
Goal and order of LEI implementation
LEI code provides unique identification of a legal entity on the local market (i.e., in Russia), as well as to identify such entity on international level.
Global LEI system was implemented step-by-step:
- launch of pre-Local Operating Units (pre-LOU), which shall start LEI assigning to entities before all parts of the GLEIS infrastructure are created;
- establishment of the Central Operating Unit (COU), which shall maintain global identification system;
- creation of a global information network, which shall unify all Local Operating Units and COU into a single infrastructure, responsible for fulfillment of all goals, stipulated by G20.
At the 1st stage an interim global information network was maintained: code assignment was done by pre-Local Operating Units endorsed by ROC in several countries.
At the 2nd stage GLEIF was established and authorized by ROC to fulfil the COU functions as well as to accredit organizations wishing to operate as a LOU.
During the 3rd stage pre-LOUs were accredited by GLEIF and granted a LOU status. They also implemented unified formats set by GLEIF for data interchange in the global identification system, resulting creation of the permanent global infrastructure of legal entities identification.
NSD is one of such Local Operating Unit. This permanent status was received by NSD on January 5, 2018, it replaced the temporary one (pre-LOU). NSD had been performing pre-LOU functions since March 01, 2013. Pre-LOU status was received by NSD with support of Russian authorities, participating in creation of GLEIS.
Legal entity identifier contains 20 symbols and has the following structure:
NSD’s prefix as a Local Operating Unit: 2534.
LEI is assigned to a legal entity only by its request or by request of persons, authorized by a legal entity.
Information on assigned codes is public and disclosed on Local Operating Units’ websites — in scope of each LOU. Information on all LEIs issued around the world is also published in the GLEIF’s database on its website.
LEI codes uploaded to GLEIF’s database are official and globally accepted by regulators and participants of national and international markets regardless of whether codes were assigned by pre-LOUs or accredited LOUs.
Public data on assigned codes also contains main information on legal entity in accordance with the ISO 17442, including its legal name, registered address and other data. The Level 2 data, which allows for the identification of parents and their subsidiary companies using LEIs and connections between them, is also disclosed.
LEIs, assigned by NSD, are disclosed in the LEI directory.
National Settlement Depository plays a major role on the Russian financial market and keeps information on almost all entities, operating on the market.
On the basis of Request from legal entities such information could be processed by NSD for LEI assigning and keeping such information actual in the global LEI system.
Using LEI allows:
- To minimize mistakes made during financial transactions.
- Simplify reporting to market regulators.
- To uniquely identify counterparties, issuers and other market participants.
How to receive LEI
In order to receive LEI, a legal entity shall submit to NSD the set of documents in accordance with a Rules for the Provision of Services Related to Assignment and Verification of the Legal Entity Identifier by National Settlement Depository, including an Application for Assignment of LEI (Appendix 2 to the Rules).
Required documents are disclosed in the Documents section of the website.
See the Fee schedule section of the website for further information.