LEI code
Legal Entity Identifier (LEI) is a global identification number for legal entities in financial markets, consisting of a 20-digit alphanumeric code. The LEI code is unique; it is assigned once to a specific company, and the same code can no longer be assigned to another company. The LEI code is not a substitute for the Estonian Business Register registry code. The LEI code is required for legal persons wishing to carry out transactions with listed securities.
The LEI code links a legal entity to key information that allows companies participating in global financial markets to be clearly and uniquely identified. The LEI codes started to be used for reporting as of 3 January 2018 under MiFID II and MiFIR regulations, when the existence of a valid LEI code became mandatory for legal entities engaged in listed securities transactions.
Companies with the right to provide investment services must use the LEI code when notifying the supervisory authorities of transactions in securities by a legal person client. If the client does not have a LEI code, it is not possible to fulfil the reporting obligation. Therefore, the Bank is also unable to execute transaction orders of legal persons that do not have a LEI code.
Legal persons are required to submit a LEI code when they wish to purchase or sell listed securities or crypto assets, or when they wish to use an LHV Trader or portfolio management service. In addition, the LEI code is required for non-payment (FOP) and delivery versus payment (DVP) transactions in listed securities when there is a change of ownership of the securities (e.g., shares are transferred from a legal person’s account to a private person’s account).
LEI code is not necessary in the case of unlisted shares and private limited company shares, unlisted bonds, and transactions involving traditional fund shares.
Legal persons can apply for a LEI code from authorised bodies, a list of which is available on the website of the Global Legal Entity Identifier Foundation (GLEIF). There are a number of options and the choice is yours. LHV offers its clients a convenient LEI code management service, where we apply for an LEI code for a company on behalf of the company from the authorised authority that issues the LEI code. Concluding a management service agreement for both issuing a new code and retrieving an existing code is quick and easy. The Bank will be responsible for the management and annual update of the code. LHV Pank itself does not issue LEI codes.
The LEI code is issued for a charge and comes with an annual maintenance fee. It is worth noting that the price may vary significantly depending on the service provider. The price list for the LEI code management service offered by LHV can be found here.
In order to execute transaction orders and fulfil the related reporting obligation, the LEI code of the legal entity must be valid. Before executing a transaction, the company providing the investment service will verify the existence of the code and its validity. If the LEI code already issued has expired, the validity of the code must first be extended before transactions can be carried out.
The investment service provider must request from a client that is a legal person, all the information necessary to provide the supervisory authority with information on transactions. Such information includes the LEI code.
If a legal person client fails to provide the investment service provider with all the information necessary to carry out securities transaction, including the LEI code, the service provider will not be able to comply with its legal reporting obligations. In this case, it is not possible to execute the transaction order.
When you receive your LEI code, you must add the code to your company details in internet bank or mobile app. You can do this in internet bank under “Information and settings” → “Data” → “LEI code”; on the mobile app, you can also find the corresponding field under the company data. If you are using the LEI code management service provided by LHV, the necessary information will be added to your company details automatically.