Your Guide to Understanding the LEI
LEGAL ENTITY IDENTIFIER
How can my organization obtain a Legal Entity Identifier in Rwanda?
The LEI will be assigned on receipt of an application from the legal entity and after due validation of data provided by it.
The Legal Entity Identifier (LEI) is a global reference number that uniquely identifies every legal entity or structure that is party to a financial transaction, in any jurisdiction.
The LEI is a 20-character, alpha-numeric code based on the ISO 17442 standard developed by the International Organization for Standardization (ISO).
The LEI connects to key reference information that enables clear and unique identification of legal entities participating in financial transactions. Each LEI contains information about an entity’s ownership structure and thus answers the questions of ‘who is who’ and ‘who owns whom’.
The LEI data pool can be regarded as a global directory that greatly enhances transparency in the global marketplace.
Why obtain a Legal Entity Identifier?
- LEI provides global recognition for your business or organization
- LEI is a global identifier that is endorsed by the G20 and the Financial Stability Board (FSB). Regulatory Oversight Committee (ROC) of FSB provides overall framework for LEI and the operational arm of ROC, Global Legal Entity Identifier Foundation (GLEIF), Switzerland manages the global LEI system (GLEIS) through LEI issuing entities, known as Local Operating Units (LOUs).
- Complying with the Beneficial Ownership guidelines in Rwanda that are set to be enforced: https://rdb.rw/wp-content/uploads/2023/03/Beneficial-Ownership-Guidelines_Eng.pdf
- It is standardized across countries.
- LEI serves as an essential identifier in cross border (international) transactions.
- LEI confers global credibility on your business, financial institution or organization. You can mention your LEI on your website and stationery and incorporate in QR Codes, Bar Codes, Website Seals etc.
- Small & Medium Enterprises (SMEs) that obtain LEIs can stand out from amongst their peers in the domestic and global marketplace.
- As B2B e-commerce expands, LEI is being increasingly used for better identification of buyers and sellers on online marketplaces.
- LEI also allows you to validate parent-subsidiary relationships
- Issued LEIs can be easily searched on the GLEIF database; either on its web interface or via API
- LEI searches always provide updated results since the LEI has to be renewed annually. LEI renewal requires validation of the latest corporate details of the legal entity.
Who is eligible for obtaining the Legal Entity Identifier?
- Any legal entity that is a party to financial transactions can obtain a LEI. This entity could be an incorporated entity, partnership firm, proprietorship firm, bank, mutual fund, asset management company, trust, holding company, special purpose vehicle (SPVs) etc.
FAQ'S
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Frequently Asked Questions regarding the LEI
What is LEI?
The Legal Entity Identifier (LEI) initiative is designed to create a global reference data system that uniquely identifies every legal entity, in any jurisdiction, that is party to a financial transaction. More specifically, LEI is a unique 20-digit code that is assigned to a legal entity
What is the purpose of LEI?
The global LEI system (GLEIS) has been set up by regulatory authorities [including G20 and the Financial Stability Board (FSB)]
The LEI is designed to enable the identification and linking of parties to financial transactions in order to manage counterparty risk. Its goal is to help improve the measuring and monitoring of systemic risk and support more cost-effective compliance with regulatory reporting requirements
What is the LEI structure?
The LEI is a 20-character alphanumeric code created using ISO 17442:2012 standard and has the following structure:
- Characters 1-4: Prefix used to ensure the uniqueness among codes from LEI issuers (Local Operating Units or LOUs).
- Characters 5-18: Entity-specific part of the code generated and assigned by LOUs according to transparent, sound and robust allocation policies. As required by ISO 17442, it contains no embedded intelligence.
- Characters 19-20: Two check digits as described in the ISO 1744 standard.
Every eligible legal entity will be assigned unique LEI for use globally.
Who is required to have an LEI?
Any legal entity that is a party to financial transactions can obtain a LEI. This entity could be an incorporated entity, partnership firm, proprietorship firm, bank, mutual fund, asset management company, trust, holding company, special purpose vehicle (SPVs) etc
How much time does it take to process an LEI application?
it generally takes ... to issue an LEI after receipt of payment / submission of required documents
Who is an Authorized Person for particular LEI?
Every legal entity applying for LEI and operating the portal to modify, update or renew is required to do so through officials authorized for this purpose.
- Main user or primary user who is submitting the online application form for issuance of LEI
- Authorized user – Name and email id of authorized officials named in the LEI online application form
- Secondary user – Name and email id of Secondary authorized officials named in the LEI online application form
A duly authorized person is the official authorized through Letter of Authority / Board Resolution.
What are the documents required to be submitted to ProData247 - LEI for processing LEI applications?
- Letter of Authority as per the format specified by ProData247 - LEI team
- Audited Financial Statements
- Audited financials of Holding and Ultimate parent or auditor’s certificate as per format specified by ProData247 - LEI in case of holding company and ultimate parent
Why do LEIs need to be renewed?
Renewing the Legal Entity Identifier is necessary to ensure that all information about the company connected to the LEI is up to date
Are there any fees associated with getting an LEI
There may be fees associated with the getting and obtaining an LEI. TBD with LSEG