Legal Entity Identifier Code

Legal Entity Identifier (LEI) Code is a global reference number that identifies every legal entity participating in a financial transaction. The

RBI (Reserve Bank of India) has mandated the Legal Entity Identifier Code for all participants in the Over-the-Counter (OTC) derivatives markets. In this article, we look at the Legal Entity Identifier Code in detail.

Applicability for LEI code

The following entities eligible to apply for Legal Entity Identifier Code are Sole Proprietorships, Partnership Firms,

Limited Liability Partnerships (LLP), Public Limited Companies, Private Limited Companies, Government Companies, One Person Company, Insurance Companies, Trusts, Housing Finance Companies, Non-Banking Finance Companies, Non-profit companies, Special Purpose Vehicles, Mutual Funds-Sub Scheme, Pension Fund Sub-Scheme, Alternative Investment Fund (AIF), AIF-Sub Scheme, Pension Fund, Nationalized Banks, Scheduled Urban Cooperative Bank, Payment Banks, RRBs and other banking companies.

Purpose of Code

Legal Entity Identifier (LEI) code serves for the following purpose:

To provide consistent and accurate identification of legal entities which are parties to a financial transaction.
To trace financial exposure taken by the corporate.
To support cost-effective compliance with regulatory reporting requirements.
To check credit rating, in case any new financial product is launched in the market to raise funds.

Time Limit

The entities without a Legal Entity Identifier (LEI) code would not be eligible to participate in the OTC derivatives markets after the specified date in the schedule:

Phase	Net Worth of Entities	Due Date
Phase I	Above Rs.10000 million	December 31, 2019
Phase II	between Rs.2000 million & Rs.10000 million	December 31, 2019
Phase III	till Rs.2000 million	March 31, 2020

Payment of Registration Fees

The person applying for Legal Entity Identifier Code has to remit the fee to the LEIL as per the following fee structure:

For New Registration: Rs.7,080 (inclusive of GST). For Renewal: Rs.4,130 (inclusive of GST), where renewal fees will not be applicable at the time of new registration. The payment can be made by either NEFT or Demand Draft payable at Mumbai. Also, the details of payment mode available at the official portal for your reference.

Documents Required

The following are the documents to be submitted by the legal entity.

Certificate of Incorporation or Registration Certificate
Copy of PAN Card
Undertaking - cum-Indemnity as per the format prescribed by LEIL
Audited Financial Statements
Board Resolution as per the format prescribed by LEIL
Power of Attorney as per the format prescribed by LEIL in case of any further delegation by officials mentioned in Board Resolution.
Auditor's Certificate as per the format prescribed by LEIL, in case of holding the company and ultimate parent.

Online Registration for Legal Entity Identifier Code

To register for Legal Entity Identifier, follow the procedure mentioned below:

Step 1: The legal entity should register a new user on the official website of Legal Entity Identifier India Limited Step 2: The application to be submitted by a duly authorized person on creating an account using the option on the portal and fill in the required details. Step 3: Once created, a confirmation e-mail will be forwarded to the registered e-mail id to activate and verify the account. Step 4: The duly authorized may then click on the link provided in the e-mail to activate the account. Step 5: After successful login, on LEI service tab, the duly authorized can register and fill in necessary details. Step 6: After creating an account, the official will have to select 'Information' button and click on 'Legal Doc Download'. Step 7: Also, the list of documents for each legal form is available, and that can be download. Step 8: The authorized person will submit the online registration form and sends the physical documents as there is no option applicable to upload of documents on Legal Entity Identifier India Limited (LEIL) website. The documents need to be submitted to the address as mentioned below: Legal Entity Identifier India Limited (LEIL) CCIL Bhavan, 3rd Floor, S. K. Bole Road, Dadar (West), Mumbai - 400 028. Note: A duly authorized person to apply for Legal Entity Identifier Code are explained below:

Companies: For companies, is the one authorized by the Board Resolution,
Trust: For Trusts, is the one authorized by the Board of Trustees Resolution,
Societies: For Societies, is the one authorized by the Resolution of the Committee of Members,
Sole proprietorship: For sole proprietorship concerns, is the proprietor himself or a duly authorized person appointed through a power of attorney,
Partnership firms: For partnership firms and limited liability partnerships, is the partners themselves or an authorized person appointed through a power of attorney

Verification and Issue of LEI Number

All Legal Entity Identifier requests will be validated independently with the respective registration authorities like SEBI, NSDL, DICGC, MCA etc. Legal Entity Identifier India Limited will verify the documents received as well as the online form. Upon verification, if the submitted details are found correct, will issue Legal Entity Identifier number in 3 to 5 working days. A Legal Entity Identifier Code is valid for one year from the date of issuance or last renewal date. For renewal after the expiry date, the entire record needs to be validated once again to ensure the accuracy of the information.

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Frequently Asked Questions

Common questions about Legal Entity Identifier Code for Financial Transactions.

A Legal Entity Identifier (LEI) Code is a unique global reference number that identifies every legal entity participating in financial transactions. It serves to provide consistent and accurate identification of legal entities involved in such transactions.

The article mentions various entities that are eligible to apply for an LEI Code, including sole proprietorships, partnerships, limited liability partnerships, companies (public, private, government-owned), insurance companies, trusts, housing finance companies, non-banking finance companies, non-profit organizations, special purpose vehicles, mutual funds, pension funds, alternative investment funds, banks, and other financial institutions.

An LEI Code serves multiple purposes, such as enabling the tracing of financial exposure taken by a corporate entity, supporting cost-effective compliance with regulatory reporting requirements, and facilitating credit rating checks when new financial products are launched to raise funds.

Yes, the Reserve Bank of India (RBI) has mandated a schedule for entities to obtain an LEI Code based on their net worth. The deadlines range from December 31, 2019, for entities with a net worth above Rs. 10,000 million to March 31, 2020, for those with a net worth up to Rs. 2,000 million.

The fee structure for obtaining an LEI Code is as follows: Rs. 7,080 (inclusive of GST) for new registration and Rs. 4,130 (inclusive of GST) for renewal. The renewal fee is not applicable at the time of new registration.

The required documents include a Certificate of Incorporation or Registration, a copy of the PAN Card, an Undertaking-cum-Indemnity, Audited Financial Statements, a Board Resolution, a Power of Attorney (if applicable), and an Auditor's Certificate (in case of a holding company or ultimate parent).

Entities can register for an LEI Code online through the official website of the Legal Entity Identifier India Limited (LEIL). The process involves creating a user account, filling out an online registration form, and submitting physical documents to the LEIL office in Mumbai.

The article specifies that for companies, the authorized person is the one designated by the Board Resolution; for trusts, it is the person authorized by the Board of Trustees Resolution; for societies, it is the person authorized by the Resolution of the Committee of Members; for sole proprietorships, it is the proprietor or a duly authorized person appointed through a power of attorney; and for partnership firms and limited liability partnerships, it is the partners themselves or an authorized person appointed through a power of attorney.

An LEI Code is valid for one year from the date of issuance or the last renewal date. After the expiry date, the entire record needs to be validated again to ensure the accuracy of the information for renewal.

All LEI requests are independently validated by the Legal Entity Identifier India Limited (LEIL) with respective registration authorities like SEBI, NSDL, DICGC, MCA, etc. LEIL also verifies the documents received and the online form. Upon successful verification, an LEI Code is issued within 3 to 5 working days.