An Introduction to the LEI and GLEIF

Jul 10, 2024

An Introduction to the LEI and GLEIF

 

There are seven billion people on our planet. Over forty-five thousand companies on the major stock exchanges. And an infinite number of private businesses worldwide.

 What happens when you can’t make out who’s who? Who owns whom? And who owns what? Without the details of the organisations you’re dealing with, doing business can be tricky.

In the past, accurately identifying legal entities on a global level has been a complex task, requiring a significant investment in time, money and resources. This was because there wasn’t a single, open and up-to-date database giving you all the background information you needed. And this lack of transparency led to financial crises, fraud and market abuse.

Wouldn’t life be easier if there was one unique identity behind every business? This is where Legal Entity Identifiers – or LEIs – can help.

How they work is simple. A business signs up and receives a unique twenty-digit code based on a standard developed by ISO. This is the LEI.

 

The LEI connects to key reference information such as the name of a company or who owns it. This enables clear identification of legal entities. The reference data is validated against third party sources and then hosted online for all to use. By replacing siloed information with a standardized approach, LEIs take the complexity out of business transactions.

As we’ve seen with the current LEI population, LEIs have generated excellent results. They’re allowing public authorities to better evaluate risks, make corrective steps and improve data integrity. And they’re giving businesses the confidence they need to engage in transactions with total visibility, greater certainty and improved control.

 

Together, individual LEIs make up an accurate and transparent database for unique legal entity identification that all businesses can benefit from.

LEIs have been a force of good for the financial industry, and we believe the advantages apply to the wider business community too. The LEI allows everyone to cut costs, accelerate operations and gain deeper insight into the global marketplace. The LEI initiative, driven by the G20 and the Financial Stability Board, is open to public-private partnerships.

At GLEIF, their role is to make global LEIs a reality. They are a not-for-profit organisation backed and overseen by the LEI Regulatory Oversight Committee, representing public authorities from across the globe. They support the implementation and use of LEIs by providing the technical infrastructure needed to make sure this data is ready and easily accessible for everyone to use, free of charge.

By partnering with the LEI issuing organisations, who have in-depth knowledge of local markets, GLEIF can ensure our database is always accurate. And they’re continuously enhancing our data quality through rule setting, monitoring and reporting.

At GLEIF, they provide the only global source of open and standardised reference data with the potential to capture any entity engaging in a financial transaction.

As we know, there are millions of business entities on our planet. They’re on a journey to increase LEI adoption so that in the future, our database could provide a 360-degree view. Private and public sector organisations across the globe can benefit from having an LEI, which includes enabling smarter decisions about who to do business with – while bringing simplicity to onboarding and transacting.

You have many reasons to get an LEI. Remember, the more businesses that sign up the greater the advantages for all.

Isn’t it time we started connecting the dots?

Lets transform your banking automation journey together