Note on Legal Entity Identifier (LEI)

1. An Overview:

 

The Legal Entity Identifier (LEI) is a unique global identifier for legal entities participating in financial transactions. Also known as an LEI code or LEI number, its purpose is to help identify legal entities on a globally accessible database. Legal entities are organizations such as companies or government entities that participate in financial transactions. An individual person may not obtain an LEI. The identifier is used in regulatory reporting to financial regulators and all financial companies and funds are required to have an LEI.

 

The Legal Entity Identifier (LEI) code is conceived as a key measure to improve the quality and accuracy of financial data systems for better risk management post the Global Financial Crisis. LEI is a 20-digit unique code to identify parties to financial transactions worldwide.

 

LEI will be assigned on application from the legal entity and after due validation of data. For the organization, LEI will

1. Serve as a proof of identity for a financial entity
2. Help to abide by regulatory requirements
3. Facilitate transaction reporting to Trade Repositories

 

1. LEI Code Applicability:

 

LEI codes are mandatory for all legal entities who are trades in securities. The Reserve Bank of India has mandated the use of LEIs,

1. All companies trading in OTC markets for Rupee Interest Rate derivatives
2. Foreign currency derivatives
3. Large Corporate Borrowers
4. Credit derivatives
5. Legal entities operating within certain financial markets in India.

 

(All entities having total fund-based and non-fund-based exposure of Rs. 5 crore and above are termed as Large Corporate Borrowers. However, currently, LEI code is applicable only for entities having total exposure above Rs. 50 crores.)

 

III. Consequences for Non-Application:

 

1. Entities dealing in OTC derivative markets will not be eligible to transact without a valid LEI code.
2. Borrowers who do not obtain LEI code will not be granted renewal/enhancement of credit facilities.
3. Entities dealing in non-derivative markets transaction will not be able to undertake transactions in financial markets after the due date, either as an issuer or as an investor or as a seller/buyer.
4. Transactions undertaken through the recognized stock exchanges are outside the purview of the LEI requirement.

 

1. LEI Registration Date:

 

Phase	Net Worth of Entities	Current Deadline	Extended Deadline
Phase III	Up to 200 crores	March 31, 2020	September 30, 2020

RBI made it mandatory to obtain the LEI (Legal Entity Identifier) for all the categories of entities (except individuals) prior to 30^th September 2020 who are undertaking the following transactions-

 

 

1. Documents required for LEI code application:

 

1. Certificate of Incorporation/Registration Certificate
2. PAN Card
3. Undertaking-cum-Indemnity as per the format specified by LEIL
4. Audited Financial Statements
5. Board Resolution as per the format specified by LEIL or a certified true copy of the general board resolution or general power of attorney will be accepted if the legal entity commits to submit a fresh board resolution in the format as prescribed by LEIL when the next Board Meeting is held subsequently.
6. Power of Attorney (as per the format specified by LEIL)
7. Audited financials of Immediate Parent and Ultimate Parent Entity or Auditor’s Certificate as per the format specified by LEIL in case of an immediate parent and ultimate parent entity.

 

1. Validity:

 

The validity period for LEI is 1 (one) year from the date that the Legal Entity Identifier is registered

Annual renewal of LEI is a must for a company or organization that wants to continue to participate in financial transactions.

 

VII. Place of rendering Services:

 

The place of rendering services generally shall be our office situated at Office No. 106, Sr No. 55, Sukhniwas, 15th August Chowk, Mangalwar Peth, Pune – 411011, Maharashtra, India.

 

VIII. Professional Fees: Shall be discuss in Meeting

 

“Our priority is Client’s satisfaction and we believe in maintaining healthy and long-term relations with our clients.”

Kindly sign a copy of the letter/ or mail me at info@csladda.com in token of approval or you may issue separate letter accepting terms and condition of this letter.

 

Thanking you and assuring best professional services.

 

Sd/-

Pramodkumar R. Ladda

Company Secretary & Insolvency professional