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Legal Entity Identifier

Legal Entity Identifier (LEI)

A Legal Entity Identifier (LEI) is a unique 20-digit code that identifies a distinct legal entity that is counterparty to a derivatives (swaps) transaction in the financial markets.

Objective

Until a globally valid LEI system has been set up, entities can obtain a so-called pre-LEI.

The pre-LEI will cover the activities of the distinct legal entity and any branch offices that it may have. A Branch office cannot have its own LEI.

At a later date, once the final LEI system has been agreed to by the regulators, existing pre-LEIs will be converted into permanent LEIs.

Why do you need a LEI?

All counterparties to derivatives transactions in the European Union are expected to have a LEI for reporting to trade repositories under the European Market Infrastructure Regulation (EMIR). Likewise, the LEI can be used for trading and trade reporting purposes in the United States.

Whilst the LEI will clearly assist the regulatory authorities in monitoring and analysing threats to the stability of the financial markets, it can also be utilised by counterparties internally for risk
management purposes.

How to get a LEI?

To obtain a LEI you must register with an authorised LEI issuer. They will carry out a validation check on the information provided and, assuming validation is successful, issue a pre-LEI.

Time line

As the regulatory authorities have not yet agreed on a standard LEI that can be used globally, at the moment entities can only obtain what is being referred to as a pre-LEI.

LEI: the highlighted parts of the value chain are affected

ECB: LEI mandates should be considered by US

Discuss

The US and other non-European countries should start pulling their weight on legal entity identifiers, a top European banking official said. Benoît Cœuré, an executive board member of the European Central Bank, said the EU "is setting a good example" by adopting regulations that require use of the barcode equivalents aimed at pinpointing systemic risks.

LuxEIS: Luxembourg Entity Identifier Service

Clearstream

LuxCSD has been sponsored as the pre-LOU (Local Operating Unit) of the Global Legal Entity Identifier. It is a system for Luxembourg-domiciled entities and investment funds. If you are interested in having your LEI data managed by LuxCSD and benefit from our support, please follow this link.

Required to have a LEI?

Staff Clearstream

LuxCSD’s LEI issuance service for Luxembourg-domiciled entities and investment funds is now operational. All EU counterparties entering into derivatives trades are required to have a LEI to meet the reporting obligations under the European Market Infrastructure Regulation (EMIR).

IOSCO Consultative Report: harmonisation of critical OTC derivatives data elements

Discuss

The purpose of this consultative report is to help develop guidance to authorities on definitions for the second batch of critical data elements that are important for the globally consistent and meaningful aggregation of data on OTC derivatives transactions.

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