The goal of introducing the Global LEI System (GLEIS) is to standardize the identification of legal entities worldwide. Currently, there are many different identification systems and methods in different countries and markets. The ultimate goal of GLEIS is that there is only one standard system. Today, companies use LEI codes to identify legal entities around the world. If a company is not sure whether to engage in a financial transaction with another company, it can use the LEI database to improve transparency and better understand where its partner comes from, who its parent companies are and, ultimately, minimize risk and increase security. A legal form has only one meaning according to local law, so providing an English translation for all legal forms in all countries would be confusing. In general, an LEI code is required for any legal person involved in financial transactions or wishing to trade on the financial markets (purchase of shares, bonds or other securities). There are many regulations (depending on the jurisdiction) where the use of LEIs is mandatory or highly recommended. Level 2 data contains information about the parent structure of the entity – direct and ultimate parent entities and direct and ultimate child entities (if applicable). A separate tab with a log of changes made to the LEI record can also be found, which can be useful for reviewing changes to the entity`s information. One of the advantages of a freely accessible global LEI system is that anyone can search for registered legal entities in the database. For this purpose, our LEI search tool can be used. The Global Legal Entity Identifier Foundation (GLEIF) is a non-profit organization created to support and implement the use of LEI codes.
It was founded in June 2014 and its main tasks include overseeing the implementation and registration of LEI numbers, as well as promoting transparency in the global financial market. They host the main LEI database, which contains all LEI codes and related information. GLEIF is supported and overseen by the LEI Regulatory Oversight Committee and is headquartered in Basel, Switzerland. The global LEI system was established to better regulate, monitor and analyze threats to financial stability. This was primarily a response to the 2008 financial crisis following the collapse of Lehman Brothers Holdings Inc. The global LEI system provides greater transparency in large financial transactions, especially when transactions involve legal entities from multiple countries. Currently, there are several systems that mimic the purpose of an LEI, but this global system hopes to consolidate all the information into a single database that takes into account all the legal entities in the world. GLEIF also publishes the Entity Legal Form Code List (ELF).
It contains the legal forms of legal entities that are established in individual legal systems. Examples of legal forms of companies are: Limited Liability Partnership (LLP), Limited Liability Company (GmbH) or Société Anonyme (SA). The ELF code list assigns a unique code to each legal form of the entity. The ELF code list is based on the ISO 20275 standard “Financial Services – ELF”, developed by the International Organization for Standardization. The aim is to enable the codification of legal forms within legal systems and thus facilitate the classification of legal persons according to their legal form. By integrating ELF codes into the standardized set of legal entity reference data available in the Global LEI Index, the business card information contained in each Legal Entity Identifier (LEI) record is further enhanced. ISO stresses that understanding the legal form of a business “is an important part of financial services transactions. To enter into a business relationship, it is necessary to distinguish the type of entity with which business is carried out. The parties (and their organizational structure) involved in financial transactions must be identified in these transactions. Standardization of legal or organizational construction will contribute to flexibility and allow a better understanding of risk exposure and access to capital. A Legal Entity Identifier (LEI) is a unique 20-digit alphanumeric code used to identify legal entities worldwide. The code is based on the ISO 17442 standard developed by the International Organization for Standardization (ISO).
LEI codes help companies and regulators identify parties involved in financial transactions with the aim of increasing transparency in the global marketplace. The most typical choice for legal entities is registration for one year. After applying for an LEI, the number is issued and may be made available to other legal entities in connection with financial transactions. Alternatively, partners and financial institutions can search for the company name to find the LEI code and related information. The objective of the LEI Code is to increase transparency in the execution of financial transactions and reporting tasks. The use of LEIs is mandatory under a number of regulations and directives of the European Union and, as of 3 January 2018, of all legal entities carrying out transactions in securities or derivatives of any kind (e.g. shares, bonds; ETFs, currency futures, swaps, interest rate swaps, etc.) must register to obtain an LEI. GLEIF monitors compliance with the ELF code list by LEI issuers when an ELF code for a particular legal form is available in a jurisdiction.
Once an application has been submitted with all the correct information, the LEI can usually be issued within a few hours. LEI`s search function is extremely easy to use and functional, even if the exact LEI code of another legal entity is not known. For example, a partial LEI code can be entered and the search function automatically suggests potential results. Alternatively, the name of the legal entity can also be entered. It also has an auto-suggest feature that makes it easy to find the right entities. By integrating ELF codes into the standardized set of legal entity reference data available in the Global LEI Index, the business card information contained in each Legal Entity Identifier (LEI) record is further enhanced. The richer data provides an improved user experience as it helps categorize legal entities and thus provides better insight into the global market. As of the implementation of version 1.2 of the list of ELF codes, french legal forms (and ELF codes) will now also be used for 7 French overseas territories (French Guiana, Guadeloupe, Martinique, Mayotte, Réunion, Saint-Barthélemy and Saint-Martin). These courts are part of the France and as such have the same legislation and therefore the same legal forms. Further general information can be found on this GLEIF website: www.gleif.org/en/about-lei/code-lists/iso-20275-entity-legal-forms-code-list Interested parties who wish to propose a legal form to be included in the list of ELF codes are requested to send an e-mail to elf@gleif.org.
Interested parties wishing to propose a legal form to be included in the list of the ELF code are requested to send an e-mail to info@gleif.org. The ELF code list is based on the ISO 20275 standard “Financial Services – Entity Legal Forms (ELF)”, which was developed by the International Organization for Standardization. The standard was published in July 2017. As ISO states, “it specifies the elements of a single system to identify the different legal forms of the entity in a jurisdiction. The aim is to enable the codification of legal forms within legal systems and thus facilitate the classification of legal persons according to their legal form. The ISO standard states that the legal form of the entity means the “type of entity that an organization is considered to be part of the legal or regulatory system under which it was created.” All legal forms of legal entities are only available in the national language(s). Countries with several official languages (e.g. Switzerland, Belgium, Canada) have registered their legal forms in all official languages. According to GLEIF, Level 1 data is used to answer the question “Who is who?” The data includes the official name of the legal entity as registered in the commercial registers, the country of incorporation, the addresses of the registered legal and registered offices, as well as the date of the first transfer of LEI, the date of the last update of the LEI data and, where applicable, the expiry date. In the future, organizations that issue LEIs will refer to the ELF code in their LEI issuance processes and reports. The DUI Common Data File (CDF) format defines how LEI issuers report their LEI and Level 1 REFERENCE DATA, i.e.
the business card information of a legal entity.