With the recent use of new technologies and platforms for trading over-the-counter derivatives at an increasingly global scale, there has been a growing movement towards using a single identifier for each counterparty across jurisdictions. To facilitate this goal, regulators have encouraged firms to request LEIs from reputable data furnishers voluntarily.
Today, many organizations are required to identify their counterparties in legally binding transactions for which entities are required to have an LEI Certificate, even if they never will do business with them. For example, retail banks may only need an LEI to meet compliance requirements for identifying certain types of customers or counterparties when conducting due diligence or customer on-boarding procedures. In other cases, companies may want to voluntarily obtain an LEI along with a Unique Trade Identifier (UTI) to improve data quality and streamline operations with their business partners. The following steps might be helpful to obtain an LEI certificate for your company
Check if you need an LEI certificate
Not every company needs an LEI certificate. The first step is to check if you need one. You might not need an LEI certificate if you are only trading domestically and don’t have any foreign investors or subsidiaries. If you do need an LEI certificate, go to the next step.
Find out more about the LEI system
The second step is to learn more about the LEI system itself so that you understand what is involved in getting an LEI certificate. The Global Legal Entity Identifier Foundation (GLEIF) provides detailed information on everything from registering for an LEI code to managing them.
Validate your data quality and register for a GLEIF account
Before going any further with the process of getting an LEI code, take some time to make sure that your company data is valid and accurate. You may not want to jump right into getting an LEI code if there are serious errors or missing information in your records since the process will require updates once you get started. Use this stage as an opportunity to clean up your records before continuing onward.
Record for Legal Entities
The next step is to validate your company data and create at least one record for each legal entity (and its subsidiaries) within your organization – this means having at least one principal name and contact details. Once you have registered for a GLEIF account, you can validate your data
Order your LEI certificate
After you have registered and validated your company data, the next step is to order your LEI certificate. This can be done through an authorized provider. Simply search for ‘authorized LEI providers’ online and find one that suits your needs.
Receive your LEI certificate
Once you have placed your order, the provider will send you an email with instructions on how to retrieve and activate your LEI certificate. Follow the steps provided and you should be good to go in no time!
Upload your LEI certificate to GLEIF
The Global Legal Entity Identifier Foundation (GLEIF) provides detailed information on everything from registering for an LEI code to managing them. Take some time to read up on the system and learn what you’ll have to go through.
Manage your company data
While all of this seems like a lot, one of the best perks of having an LEI code is that it streamlines compliance processes and gives you a better overview of your company data. Make sure to keep your GLEIF account updated with any new changes or additions to your company data.
