Anyone who works in finance, investments, or money transactions has surely heard of LEI codes. LEI codes have been around for quite some time, but the requirements related to holding such a code have changed over the years. More and more entities and institutions are required to have their individual LEI code. Initially, financial institutions were the ones obliged to obtain the code, which was linked to the European EMIR regulation. Over time, the list of entities required to hold the code was expanded to include, among others, those issuing securities.

What is an LEI code?
An LEI code is simply an individual number that entities conducting various operations and activities in financial markets must possess. This includes banks, institutions trading in securities, bonds, mutual funds, and even insurance. The code consists of 20 alphanumeric characters, meaning it contains both digits and letters. It is generated randomly and assigned by one of dozens of institutions operating in Europe. All these institutions that issue codes are overseen by the non-profit umbrella organization GLEIF.

Who must have an LEI code?
Who, in practice, needs to hold an LEI code? As previously mentioned, banks are always required to have one. Next are investment funds, stockbrokers, pension funds, and credit institutions. In addition, companies and individuals who run a business and conclude financial transactions as part of their business activity must also have an LEI code. If you operate a sole proprietorship and invest in finance—but not as part of your main business activity—you do not need to apply for an LEI code. In other words, the average person who, for example, buys and sells shares privately (not as part of a business) does not need to apply for this code.

How is an LEI code assigned?
LEI codes are issued relatively quickly. For entities registered in Poland, the LEI code can be generated in as little as 5 minutes. For entities from other countries, we recommend checking the relevant list along with the corresponding LEI code issuance times. Ordering involves selecting the registration option and then completing the available form. The cost of registering an LEI code starts at $48.96 net per year. Moreover, if you order your LEI code through our company, you will also receive a free DV-validated SSL certificate for the same duration as your LEI code registration. Check out our offer for LEI code registration.

Lack of an LEI code
The legal acts regulating the obligation to have an LEI code are the EU directive MiFID II and, subsequently, the Regulation on Markets in Financial Instruments (MiFIR) – Article 26 of Regulation No. 600/2014. What happens if institutions required to hold an LEI code fail to obtain one? The regulations concerning the LEI code have been in force since the second half of 2018. Not having an LEI code results, among other things, in the inability to conduct financial operations such as selling or buying shares, bonds, government bonds, and other derivatives. This means, for instance, that entities will not be able to operate on the Stock Exchange. The straightforward process of obtaining an LEI code and the relatively low fees should therefore encourage entities to apply for their LEI number.

Do you have any questions about the LEI code? Feel free to contact our sales department.