The Legal Entity Identifier is a unique and consistent identifier of counterparties to financial transactions.
In Europe the adoption of LEIs are mainly related to the EMIR regulatory reform and the start of the Reporting Obligation from 12 Febuary 2014 applicable to both parties to an OTC derivative. As of 3 January 2018 the mandatory use of LEI will be extended to Transaction Reporting of certain financial instruments under MiFID II/MiFIR.
The establishment of a Global LEI system is critical to improving measurement and monitoring of systemic risk. Global, standardised LEIs will enable regulators and organisations to more effectively measure and manage counterparty exposure while also resolving long standing issues on entity identification across the globe.
The LEI is a unique 20-character alphanumeric code, defined in the ISO 17442 standard. The format for an LEI is always 18 alphanumerical characters [A-Z, 0-9] followed by 2 check digits.
Apart from the format, the check digits and the initial 4 characters identifying the LOU issuer, an LEI has no intrinsic logic or 'embedded information' and has been designed such that no particular information about the LEI holder can be construed by looking at the LEI.