What is a Legal Entity Identifier (LEI)?

A Legal Entity Identifier (LEI) is a unique 20-character alphanumeric code used to identify legal entities in financial transactions worldwide. It acts as a global reference ID for your organization, created to improve transparency and risk management in the financial system. Each LEI is associated with reference data about the entity – such as its official name, registered address, and ownership structure – essentially answering the questions of “who is who” and “who owns whom.” In other words, an LEI makes it easy for regulators and counterparties to uniquely recognize a company or organization across the globe.

Who issues LEI codes?

LEIs are issued and maintained by GLEIF-accredited organizations called Local Operating Units (LOUs). Any LEI issued by an accredited LOU is globally valid and listed in the public GLEIF database.

How long is an LEI valid?

An LEI is valid for one year at a time. Renew annually to keep the record active and compliant. Multi-year options are available to handle renewal automatically each year.

How is the LEI structured?

The 20-character LEI consists of: 4 characters LOU prefix, 2 reserved zeros, 12 entity-specific characters, and 2 check digits.

What is the LEI full form in banking?

LEI full form is Legal Entity Identifier. In banking it identifies legal entities in payments, reporting, and onboarding. Read the [LEI full form in banking](/learn/lei-full-form) guide.

MiFID II regulation – LEI required

11/10/2024 • 5 min read

MiFID II (Markets in Financial Instruments Directive) and MiFIR (the accompanying regulation) require investment firms to report transactions using Legal Entity Identifiers (LEIs). If a client eligible for MiFID II reporting does not have an active LEI, the firm must refuse the trade—this applies across equities, bonds, derivatives, and many structured products in the UK and EU.

Who must hold an LEI?

**Investment firms** – Broker-dealers, banks, and trading venues executing transactions in EU/UK regulated markets.
**Clients subject to reporting** – Corporates, trusts, funds, and other legal entities. Retail individuals are typically exempt, but sole traders operating as legal entities may require one.
**Third-country firms** – Non-EU/UK firms trading on EU/UK venues must still provide an LEI to comply with MiFIR transaction reporting.

When LEI lapses block trades

Trade repositories and Approved Reporting Mechanisms (ARMs) reject reports with lapsed LEIs. Firms must monitor expiry dates and ensure clients renew annually. “No LEI, no trade” remains the rule since MiFID II went live in 2018.

How to keep MiFID II compliant

Require LEIs during onboarding and refresh due diligence before execution.
Validate LEI status against GLEIF’s daily files or via an API.
Automate renewal reminders (GlobalLEI provides alerts at 90/60/30 days).
For urgent trades, assist clients with same-day LEI issuance or renewal via Express processing.

Record-keeping

Investment firms must maintain documentation for the LEI, the authorisation to trade, and any exemptions. Store the LEI reference alongside MiFID II client classifications so your reporting systems always submit a valid identifier.

If you need help aligning MiFID II controls with LEI issuance or renewal workflows, GlobalLEI can provide compliance checklists, API access, and managed renewal services.