What does LEI code mean?


Adversity causes change, and most of the time it is for the better. As a result of one such adversity (the financial crisis), the G-20 countries devised a unique method of tracking transactions between companies or between organisations and individuals. This is referred to as the Legal Entity Identifier. This is a collection of alphabets and numbers assigned to a legal entity that may be used to identify the legal identity and, if necessary, back-track financial activities.This is now becoming a standard parameter for companies and organisations across the globe with their future in mind who whish to continue to stay in business and make financial traces across international borders.

What does lei code mean?

Every jurisdiction across the globe has their own way of identifying legal entities on a domestic level. While this might be a very well-maintained system that enables them to keep track of their financial transaction and being able to identify and distinguish one entity from the other, it might not be able to do so when the same is required to be done on a global level. This is where an LEI comes into the picture. The Legal Entity Identifier (LEI) code is a globally standardized alpha-numeric identifier envisioned as a critical parameter for improving the quality and accuracy of financial data systems globally in order to improve risk management involving legal entities.The LEI can be considered as a directory on a global level for Business units across the globe.

Importance of having an LEI.

The financial services sector is quickly evolving; by registering for an LEI, you are committing to increasing openness in the global marketplace and building a brighter future for all market players. When it comes to recognising legal entities with whom you wish to perform business/financial activities, LEIs are the global standard for identification. When you use information related with a company’s LEI, you’ll know who you’re dealing with and who owns them. LEIs can lessen the administrative load on the customer, allowing you to swiftly onboard them and begin offering your services. Access to this data enables you to properly assess risk and make educated decisions.

Benefits of LEI.

  • The LEI system is designed as a totally open, non-proprietary public good, which means that its core data for all registered businesses is freely available. What this implies for financial market organisations is that they gain the major benefit of the LEI system and its capacity to identify and aggregate all present and future consumers within corporate systems, which delivers significant benefits to corporations, banks, and investment firms.
  • LEI remains open to potential future additions including both new types of legal entities and the pieces of reference data pertaining to those entities. It is intended to become the benchmark for identifying legal entities in the global financial sector.


If you wish to conduct transactions within the international economic market, you will almost certainly require an LEI. This is required in many countries throughout the world, and if you do not have an LEI, many financial institutions may refuse to do business with you.


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