Contents
- 1. The LEI Code Is Your Global Identifier – Be Recognised Globally!
- 2. Regulation May Mandate Obtaining LEI
- 3. LEI Is Already Widely Used For Know Your Customer (KYC) Practices
- 4. LEI Records Contain A Powerful Identity Data Set – Improve Trust Online
- 5. Enhance Security And Brand Protection Through Use Of Your LEI
Here, you’ll find all about the LEI code as well as compelling reasons why an organization should get an LEI. You’ll also find the pain points that people have and find advice on where and how to manage them.
1. The LEI Code Is Your Global Identifier – Be Recognised Globally!
There is a single LEI for all countries supported by G20, FSB, and Global LEI Foundation, and governed by Global LEI (GLEIF). “Who is who” and “who owns whom” are described in the LEI code, which is a real-time reference to your company’s identity record (Company search tool from the GLEIF).
LEI is just as vital as your local Company Number, VAT Number, Domain Names, and so on. For cross-border transactions, the LEI is crucial. LEI has a positive impact on both the local and global communities. With a large installed base, LEI is already widely supported. There have been about 1.5 million LEIs issued so far, and the number of LEIs installed is rapidly increasing!
2. Regulation May Mandate Obtaining LEI
Organizations are required by law to purchase LEI. There are a lot of new regulations in the works, so get your LEI in advance.
3. LEI Is Already Widely Used For Know Your Customer (KYC) Practices
Make sure your organization is not being penalized for not having the LEI. Extensive vendor networks (GLEIF data users) already rely on LEI for KYC, b2b onboarding, and identity data refresh activities.
In the banking sector, LEIs have been extensively studied as a cost-saving technique for KYC/onboarding (McKinsey & Company report). The LEI serves as the fundamental link between regional and private sector IDs, and it is through this linkage that a more reliable identification assertion may be made.
Entity Legal Forms (ELF) codes are included in the LEI’s harmonized, consistent identification data reference format (Ltd, GmbH, etc.). The unambiguous ELF data categorize legal entities and provide a clear insight into the global market space, enhancing the user experience.
4. LEI Records Contain A Powerful Identity Data Set – Improve Trust Online
LEI can be verified by both humans and machines. It is possible to search the GLEIF database of issued LEIs via the GLEIF website, a full dataset download, or an API.
Keeping an LEI active needs a revalidation of the company’s information every year. When the specifics of a company change, the LEI code renewal can be done for free and can accurately reflect the company’s identity; there is no need to issue a new code.
The LEI is the only publicly accessible identification that can link parent and child organizations. In the “who owns whom” area of organization identity, LEIs are known as Level 2 data.
LEIs can list several “Doing Business As” names and previously incorporated names, allowing counterparties to see a history of their transactions. Names and addresses can be entered in a variety of languages using LEIs. Identity data can be better understood and relied upon in a more localized context with the help of local language assistance.
The LEI system’s data quality is up for debate. The LEI reference data can be questioned. – If a counterparty believes the identification data is incorrect, a publicly accessible method exists inside the ecosystem to contest it.
5. Enhance Security And Brand Protection Through Use Of Your LEI
Site seals, QR codes, bar codes, and other forms of LEI reporting are becoming more commonplace.
XBRL already supports LEIs (the open international standard for digital business reporting). As the standardized organization identification, LEIs can be incorporated in XBRL documents such as financial statements.
LEIs will soon be used as the organization identity in SWIFT transactions in accordance with the new ISO payment standards.
Standardizing LEIs into Digital Certificates will be done via ISO 17442-2 and ETSI TS 119 412-1; this will allow for the incorporation of LEIs into digital signatures and workflows.
Conclusion
Here, we discussed what an LEI code is and how important it is for all legal entities. Not only is it a great source of identification of entities, and separates one entity from the other, it is also a source of protection for them.
Also Read: Enterprise Cloud Security Challenges for the Finance Services Sector
