What the LEI is in credit risk
Published · By Stonewake
Definition of the Legal Entity Identifier
The Legal Entity Identifier (LEI) is a unique 20-character alphanumeric code that enables anyone, anywhere in the world, to access clear, unique identification data about a legal entity. Every LEI is unique and can represent only one entity. Each entity's LEI code connects to verified reference information from authoritative local sources, including the entity's ownership structure, which is accessible in the Global LEI Index.
The LEI adheres to four necessary principles of ISO 17442: a global standard, a single unique identifier assigned to each legal entity, supported by high-quality data, and a public good available free of charge to all users.
What the LEI Identifies
The Global LEI Index is the only online source with the potential to capture any entity engaging in financial transactions globally. The reference data connected to an LEI provides the information on a legal entity identifiable with an LEI. The business card information available with the LEI reference data, e.g. the official name of a legal entity and its registered address, is referred to as 'Level 1' data. It provides the answer to the question of 'who is who'.
In addition, the LEI data pool includes the 'Level 2' data that answers the question of 'who owns whom'. Specifically, legal entities that have or acquire an LEI report their 'direct accounting consolidating parent' as well as their 'ultimate accounting consolidating parent'. If the direct and / or ultimate parents of an LEI registrant have obtained an LEI, the LEI of the parent(s) is published together with the LEI record of the child entity.
The Global LEI Index
The Global Legal Entity Identifier (LEI) Index contains historical and current LEI records including related reference data in one authoritative, central repository. The Global LEI Index is the only global online source that provides open, standardized and high quality legal entity reference data. Any interested party can access and search the complete LEI data pool free of charge and without the need to register.
The Global Legal Entity Identifier Foundation (GLEIF) issues three sets of Golden Copy Files daily. With each updated version of the Golden Copy Files, GLEIF also makes available four delta files. The delta files identify only newly issued Legal Entity Identifiers (LEIs) and / or revisions to an LEI's reference data historically reported in a Golden Copy File.
Issuance and Administration of the LEI
The LEI is administered by GLEIF, a supranational, not-for-profit foundation, backed by the G20 and the Financial Stability Board, and overseen by the Regulatory Oversight Committee (ROC). The LEI is based on the global ISO 17442 standard.
The principles governing the collection of data on direct and ultimate parents in the Global LEI System are set out in a dedicated policy document published by the Regulatory Oversight Committee in March 2016. Data collection was initiated in May 2017.
Level 1 and Level 2 LEI Data
Level 1 data comprises the business card information of a legal entity, such as its official name and registered address. Level 2 data provides the ownership structure, answering the question of 'who owns whom'.
Legal entities that have or acquire an LEI report their direct and ultimate accounting consolidating parents. If those parents have obtained an LEI, the parent LEI is published together with the LEI record of the child entity. The Global LEI Index contains both historical and current LEI records, including related reference data, in one authoritative, central repository.