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What Is a Legal Entity Identifier?
A Legal Entity Identifier (LEI) is a 20-character alphanumeric code that uniquely identifies legal entities participating in financial transactions worldwide. Introduced after the 2008 financial crisis, the LEI system provides transparency by making it possible to identify every party in a financial transaction.
The Global LEI System is managed by the Global Legal Entity Identifier Foundation (GLEIF) and overseen by the LEI Regulatory Oversight Committee. Over 2 million LEIs have been issued across 200 countries, covering banks, corporations, funds, and government entities.
LEI Structure
An LEI follows the ISO 17442 standard and consists of three parts.
- LOU prefix — characters 1-4 identify the Local Operating Unit (LOU) that issued the LEI. Each LOU is an accredited organization authorized to issue and maintain LEIs
- Entity identifier — characters 5-18 are a 14-character alphanumeric code unique to the entity within that LOU
- Check digits — characters 19-20 are two check digits calculated using the ISO 7064 Mod 97-10 algorithm (the same algorithm used for IBAN validation)
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Validate an LEI →How LEI Validation Works
LEI validation checks format compliance and verifies the mathematical check digits.
- Length check — an LEI must contain exactly 20 alphanumeric characters
- Character check — only uppercase letters (A-Z) and digits (0-9) are allowed. No special characters or lowercase letters
- Check digit verification — letters are converted to numbers (A=10, B=11... Z=35), the resulting number is checked using modulo 97, and the remainder must equal 1
Common Use Cases
LEI validation is mandatory in financial regulatory reporting and increasingly used in corporate supply chain management.
- Regulatory reporting — MiFID II, EMIR, Dodd-Frank, and other regulations require LEIs for all counterparties in financial transactions
- KYC/AML compliance — banks use LEIs during Know Your Customer and Anti-Money Laundering checks to verify counterparty identity
- Corporate bond issuance — bond issuers must have an active LEI to issue securities in regulated markets
- Supply chain verification — companies increasingly use LEIs to verify the legal identity of suppliers and trading partners
LEI Registration and Renewal
LEIs must be registered through an accredited Local Operating Unit and renewed annually.
- Registration requires submitting legal entity information: official name, registered address, legal form, and jurisdiction
- Annual renewal is mandatory — lapsed LEIs become inactive and may prevent entities from conducting regulated transactions
- Costs vary by LOU but typically range from 50 to 200 USD for initial registration and 50 to 100 USD for annual renewal
Frequently Asked Questions
Who needs an LEI?
Any legal entity that participates in financial transactions involving securities, derivatives, or other regulated instruments needs an LEI. This includes banks, investment firms, corporations issuing bonds, insurance companies, and government entities.
How long does it take to get an LEI?
Most LOUs can issue an LEI within 1-3 business days after receiving a complete application. Some offer expedited processing for urgent needs.
Can an individual person get an LEI?
No. LEIs are designed for legal entities only — corporations, partnerships, trusts, government bodies, and other organizations. Natural persons use other identification systems.