What is LEI?


If your business participates in financial trades or transactions, perhaps you have heard the term ‘LEI.’ But what is LEI? And what purpose does the LEI serve?

An LEI number (Legal Entity Identifier) is a 20-character code which functions as an international company or entity registration number. By connecting to key reference information, the LEI number is used to identify legal entities participating in financial transactions such as trading stocks, bonds, or forex.

If your company deals in trading securities – locally as well as globally – you require an LEI number.

In this article, we will answer the following and much more:

  • What is an LEI number?
  • Who needs a Legal Entity Identifier in Jersey?
  • How do I apply for an LEI number?

Do you need an LEI number? View our LEI prices here.

Mads, LEI Service
Mads Bjerggaard  

Mads holds a bachelor’s in Business Administration and Computer Science from Copenhagen Business School.
Mads has worked with complex IT-systems for more than 20 years.
Mads is also co-founder of a legal-tech company (with same owners as LEI Service).


What is an LEI number?

LEI stands for Legal Entity Identifier. The LEI number, or LEI code, functions as an international business or entity registration number. It is used by companies and banks to identify legal entities (e.g. other companies and organisations) when partaking in financial transactions such as trading stocks, bonds, or forex. 

An LEI number is a requirement for all legal entities performing trades and transactions on the financial markets in a number of countries, including the UK and the EU.

The LEI number consists of 20 characters and can be broken into three parts:

  • Characters 1-4: identification of the LOU (Local Operating Unit)
  • Characters 5-18: identification of the legal entity
  • Characters 19-20: verification of the identity of the legal entity

This 20-character, alpha-numeric code is based on the ISO 17442 standard developed by the International Organization for Standardization (ISO). It offers transparency by enabling identification of legal entities on an international scale as well as confirmation of their identity.

An LEI code consists of two levels of data which provide answers to critical questions:

  • Level 1: who is who?
    Information about the entity’s legal name, registration number, legal address, and more.
  • Level 2: who owns whom?
    Relevant information concerning the entity’s ownership and ownership structure.

The LEI system is not free. To obtain a new LEI number or renew an existing LEI number, an annual fee must be paid. This covers administration fees and regulations as well as system maintenance.

What is LEI: the purpose

Now that we have answered the question, ‘What is LEI,’ you may wonder: what is an LEI meant for?

The LEI system provides standardised information as well as a global reference system. This enables the global tracing of financial transactions, allowing you to easily identify legal entities and their owners.

Developed in 2012, the LEI system is a product of the global financial crisis of 2007-2008. Its purpose is to provide transparency within financial systems and transactions. This serves to prevent money laundering and financial fraud.

The LEI is also used to regulate financial factors within jurisdictions which utilise the LEI system. The aim is for the global system to become a standard system which can be used across markets and countries.

To ensure the credibility, transparency, and reliability of the LEI, control of the system is divided between three authorities:

  • ROC (Regulatory Oversight Committee): a committee comprised of supervisory authorities which uphold the governance principles of and oversee the Global LEI System
  • GLEIF (Global Legal Entity Identifier Foundation): a non-profit organisation responsible for the coordination and management of LEI numbers
  • LOU (Local Operating Unit): an LEI-issuing organisation which issues LEI numbers to legal entities

For an illustration of the LEI system, click here.


Who needs a Legal Entity Identifier in Jersey?

All legal entities – companies, charities, trusts, organisations, banks, and more – participating and dealing in financial transactions, stocks, bonds, and other securities in the UK require an LEI code.

Up until recently, the UK was subject to EU mandates requesting the LEI. Regulations such as MiFID II and EMIR have since 2018 required legal entities registered in EU or EEA countries to quote their LEI when reporting and participating in trades and financial transactions across the European markets.

In Britain, Limited or Sole Traders may not be legally required to get an LEI. However, BREXIT may affect companies trading internationally. This means that some entities who have yet to obtain an LEI may be required to do so as a result of the ongoing international negotiations. Further, as the LEI system is quickly being adopted as a global standard, it is a good idea to obtain an LEI number before you need it.

Read more about how to obtain an LEI number here.

The price of an LEI varies depending on whether you require a new LEI code or an LEI renewal. At LEI Service, we choose to offer both services – renewal as well as registration of a new LEI code – for the same price.


How do I apply for an LEI number?

Although the LEI is steeped in legal requirements and regulations, obtaining an LEI number need not be a complicated affair. At LEI Service, we have made the process easy for you.

Apply for a new LEI number here.

All you need to do is enter your company number here. Our system will collect your data automatically from Companies House, and we will request your confirmation of the data provided. Then we will handle the application process for you. Your LEI number will be issued within 10 minutes to 48 hours.


How do I renew my LEI number?

To ensure that all information is up-to-date, an LEI number must be renewed annually. Depending on your chosen solution, LEI Service can make sure that your LEI number is automatically renewed. We do this by updating the required information. In the event that changes are made to a client’s legal entity, the client is obligated to keep us updated.

You can renew your existing LEI number here.


How do I know if my LEI is valid?

If you have chosen VIP / express delivery and completed your purchase on a weekday before 5PM, we will ensure that your LEI code is registered within two hours. (This applies exclusively for new LEI codes.)

Please note that many banks and the global register collect and update LEI information daily. This means that it can take up to 24 hours before your LEI number is visible for 3rd parties.


How do I search for LEI numbers? (LEI lookup)

Do you need to look up the LEI number of a legal entity? Or would you like to check that your LEI number is registered correctly in the global LEI system?

Search the GLEIF database here.


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