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Legal Entity Identifier for Cross-border Transactions

 
RBI published on the 10th of December 2021 that it’s now mandatory for entities to register for a Legal Entity Identifier (LEI) code for cross-border transactions. The last date to register for the LEI code has been set for the 1st of October 2022.
 
 
LEI shall be recorded for all non-individual NEFT / RTGS messages/transactions.
 
 
Once an entity has obtained an LEI number, it has to be reported in all transactions of that entity, irrespective of the transaction size.
 
 

“In order to further harness the benefits of LEI, it has been decided that AD Category I banks, with effect from October 1, 2022, shall obtain the LEI number from the resident entities (non-individuals) undertaking capital or current account transactions of ₹50 crores and above (per transaction) under FEMA, 1999. Further, AD Category I banks may encourage concerned entities to voluntarily furnish LEI while undertaking transactions even before October 1, 2022. Once an entity has obtained an LEI number, it must be reported in all transactions of that entity, irrespective of transaction size.” – RBI said in the circular.

What is an LEI?

The Legal Entity Identifier (LEI) is a 20-character alpha-numeric code used to uniquely identify parties to financial transactions worldwide. A company’s LEI data is publicly available, completely free of charge, and can be accessed by anyone through the LEI database. This provides a more transparent global marketplace and offers businesses a one-stop approach to identifying legal entities, which has the potential to take the complexity out of business transactions.

Entities can obtain an LEI from Local Operating Units (LOUs) or Registration Agents (RAs) accredited by the Global Legal Entity Identifier Foundation (GLEIF), the body tasked to support the implementation and use of LEI.

LEI Register is a GLEIF accredited Registration Agent working with Ubisecure Oy (RapidLEI). We have been helping legal entities apply for new LEI codes or transfer and renew existing LEI codes since early 2018. We have successfully pursued our goal of making the LEI registration process simple, automated, fast, and affordable.

At LEI Register, we keep our profit margins low and believe in building long-term business relationships. Provide a same-day LEI issuance facility, live chat, and toll-free support seven days a week, active until 11 p.m.

How to register an LEI?

The entities can register themselves in 3 simple steps:

  1. Fill in the application form with the entity details at https://www.legalentityidentifier.in/
  2. Upload the necessary documents & select the validity of the LEI code.
  3. Proceed with the payment.

The adoption of LEIs in India

The Global LEI System (GLEIS) was developed by the G20 in 2011 in response to the 2008 global financial crisis. This was when the need for a more transparent financial system became evident. The purpose of the LEI code is to allow the identification of any organization or legal entity on a worldwide database. 

The adoption of LEI has grown at a rapid pace in India as compared to our global peers.

 

According to GLEIF, the number of entities having an LEI code can be found below:

 

Year

2017

2018

2019

2020

2021

No. of entities having an LEI code

2152

15,770

14,524

14,853

29,461