NOTE: LEGAL ENTITY INDENTIFIER [LEI]
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
- Serve as a proof of identity for a financial entity
- Help to abide by regulatory requirements
- Facilitate transaction reporting to Trade Repositories
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,
- All companies trading in OTC markets for Rupee Interest Rate derivatives
- Foreign currency derivatives
- Large Corporate Borrowers
- Credit derivatives
- Legal entities operating within certain financial markets in India.
- All current and future participants
This information is in regards with latest circular issued by RBI on obtaining mandatory LEI code (Legal Entity Identifier). LEI will be effective from 1st April 2021 for those entities having yearly RTGS/NEFT transactions value INR 50 Crore and above. Failing to present LEI number of Remitter / Beneficiary transactions may not be processed (debits and credits) from mentioned date.
CONSEQUENCES FOR NON-APPLICATION:
- Entities dealing in OTC derivative markets will not be eligible to transact without a valid LEI code.
- Borrowers who do not obtain LEI code will not be granted renewal/enhancement of credit facilities.
- 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.
- Transactions undertaken through the recognized stock exchanges are outside the purview of the LEI requirement.
LEI REGISTRATION DATE
LEI will be effective from 1st April 2021 for those entities having yearly RTGS/NEFT transactions value INR 50 Crore and above. Failing to present LEI number of Remitter / Beneficiary transactions may not be processed (debits and credits) from mentioned date.
DOCUMENTS REQUIRED FOR THE LEI REGISTRATION:
- Certificate of Incorporation/Registration Certificate
- PAN Card
- Undertaking-cum-Indemnity as per the format specified by LEIL
- Audited Financial Statements
- 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.
- Power of Attorney (as per the format specified by LEIL)
- 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.
The validity period for LEI is 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.
Pramodkumar R. Ladda
Company Secretary and Insolvency Professional
The Place of rendering services situated at: Branch No.01.: 496B,Om Apt,2nd Floor, Near KCC Classes, Kasba Peth, Pune – 411 011.
Branch No. 02: Off No. 106, Sr. No. 55, Sukhniwas, Mangalwar Peth, Pune-411011
Tel: +91-20-24570055 | Office Cell : +91- 9284293227, 9309845448, 8080051671 |
Personal Mob. : +91- 7972422151, 9595271145 |
Skype id: pramodladda