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What is the LEI Number?

by Olufisayo
LEI Number

The Legal Entity Identifier (LEI) is a 20-character alphanumeric identifier produced by the International Organization for Standardization and based on the ISO 17442 standard (ISO).

It connects to essential reference data, allowing for the unambiguous and distinct identification of legal organizations involved in financial transactions. LEI number lookup will display the data included in a Legal Entity Identifier.

What is the purpose of the LEI?

The necessity for a common identity resurfaced as capital markets and banking went digital. This created a lot of headaches in terms of controlling the corporate world and financial markets in terms of identity.

Corporations owned firms that were owned by other companies, causing a lot of uncertainty about who owned who and making it difficult to figure out who you were dealing with in some circumstances. This was the source of many well-known fraud cases and made it simple to move ‘dirty’ money across companies.

This made it difficult for banks and other financial institutions to onboard new customers because KYC methods relied on outdated and unconsolidated data. Registry data can be difficult to find and must be compiled into a single database.

An LEI code’s structure

ISO certificate 17442 standardizes a legal entity identifier code (LEI code). This is made up of a 20-number and letter combination.

  • The ID of the LOU that issued the LEI is always shown in numbers 1-4.
  • The numbers 5 and 6 always have a value of 0.
  • Each entity’s numbers/letters 7-18 are unique.
  • Numbers 19-20 are for verification.

What legal entities are eligible to apply for a Legal Entity Identifier?

Any of the following ‘Legal Entities’ can get a Legal Entity number:

  • Non-Profit Organizations Non-Profit Organizations Non-Profit Organizations Non-Profit Organizations Non-Profit Organizations Non-Prof
  • Entrepreneurs who are sole proprietors (Having a distinct identity within a business register)
  • (The Head Office must already have an LEI) International Branch Offices
  • Trusts and funds

Who is not eligible to receive a Legal Entity Identifier?

Any of the following are not permitted to request an LEI:

In charge of divisions, branch offices have an existing registered LEI in the same country as the head office. The parent or Head Office organization’s code should be used for all of these entity types.

What are the advantages of the LEI system for the industry?

Individual enterprises and the system as a whole are projected to save money and improve risk management as the global LEI becomes more extensively utilized. The majority of the savings will come from operational reductions including reduced transaction failure rates, data reconciliation, cleansing, and aggregation costs, and regulatory reporting costs.

Companies will profit in the long run from a worldwide LEI system since it will allow them to properly identify their counterparties and consumers and improve internal risk management. It’s too early to say how much money the financial industry would save by implementing the worldwide LEI system, but estimates range from $300 million to $10 billion.


The LEI requirements differ by country, legal jurisdiction, and industry. It is up to the authorities in each jurisdiction to decide whether or not to require the use of LEIs. On the other hand, individual market players are responsible for obtaining their own LEI and ensuring that it is current and renewed on an annual basis. LEI Worldwide can assist in this regard.

Photo by Magda Ehlers from Pexels

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