Legal Entity Identifier (LEI) Registration Online

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To streamline and enhance transparency in financial transactions, the Reserve Bank of India (RBI) has mandated the use of Legal Entity Identifiers (LEIs) for large-value transactions in centralized payment systems. As per the RBI circular dated January 5, 2021, it is compulsory for all entities (non-individuals) initiating or receiving transactions of INR 50 crore and above using Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) services to provide their LEI number and its expiry date. This requirement became effective on April 1, 2021.

For more details, visit the RBI notification here.

Role of Legal Entity Identifier India Limited (LEIL)

Legal Entity Identifier India Limited (LEIL), a wholly-owned subsidiary of The Clearing Corporation of India Ltd. (CIN- U74900MH2015PLC268921), serves as a Local Operating Unit (LOU) accredited by the Global Legal Entity Identifier Foundation (GLEIF). Recognized by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007, LEIL is authorized to issue globally compatible LEIs within India.

Why Does Your Organization Need an LEI?

The LEI is a global reference number that uniquely identifies legal entities engaging in financial transactions across jurisdictions. LEIL issues LEIs to a variety of entities including banks, mutual funds, trusts, asset management companies, and more. An LEI serves multiple purposes:

• Proof of Identity: Provides a unique identification for financial entities.

• Regulatory Compliance: Helps entities comply with various regulatory requirements.

• Transaction Reporting: Facilitates accurate transaction reporting to trade repositories.

Structure and Details of an LEI

An LEI is a 20-character, alpha-numeric code structured as per ISO Standard 17442. It encapsulates critical information about the entity:

• Official name and registered address

• Country of Formation

• Relevant country and subdivision codes

• Dates of LEI assignment, last update, and expiry

Who Needs a LEI?

LEI codes are mandatory for legal entities trading in securities under the MiFID II directive (2014/65/EU). In India, the RBI mandates LEI usage for companies trading in OTC markets for Rupee Interest Rate derivatives, foreign currency derivatives, and credit derivatives. This requirement has been phased in since November 2, 2017, based on borrowing amounts:

• Entities borrowing 1000 crore and above needed LEIs by March 31, 2018.

• Entities borrowing between 500 crore and 1000 crore needed LEIs by June 30, 2018.

• Entities borrowing between 100 crore and 500 crore needed LEIs by March 31, 2019.

• Entities borrowing between 50 crore and 100 crore needed LEIs by December 31, 2019.

Moreover, the RBI's notification on November 29, 2018, extends LEI requirements to participants in markets regulated by the RBI, including government securities markets, money markets, and non-derivative forex markets, phased by entity net worth:

• Entities valued over 10000 million require LEIs by April 30, 2019.

• Entities valued between 2000 million and 10000 million required LEIs by August 31, 2019.

• Entities valued up to 2000 million require LEIs by March 31, 2020.

Obtaining and Validating an LEI

LEIs are issued by GLEIF through Local Operating Units (LOUs). In India, LEIL is the authorized LOU. LEIs are valid for one year and require annual renewal. Entities can opt for a maximum of 5 years with automatic annual renewal, eliminating the need for yearly reapplication.

Applicability Across All Channels

The LEI requirement applies to all channels used for connecting to RTGS, including:

• Thick client: Traditional desktop applications used by financial institutions.

• Web-API: Integration through the internet or any approved network like INFINET.

• Payment Originator (PO) Module: Platforms facilitating the initiation of payment instructions

Timeframe for Obtaining an LEI

The process to obtain an LEI typically takes between 24-36 hours, with the LEI number delivered directly via email. For more information or to apply for an LEI, Connect to Compliance Calendar LLP.

To learn more about LEI Process click here

Therefore, the mandate by the Reserve Bank of India (RBI) to use Legal Entity Identifiers (LEIs) for large-value transactions marks a significant step towards enhancing transparency and efficiency in financial transactions. Effective from April 1, 2021, entities conducting transactions of INR 50 crore and above via Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) must provide their LEI number and expiry date. This requirement applies across all channels used for RTGS connectivity, including thick-client, Web-API, and Payment Originator (PO) modules.

Legal Entity Identifier India Limited (LEIL), recognized by both the RBI and the Global Legal Entity Identifier Foundation (GLEIF), is the authorized body to issue LEIs in India. The LEI serves as a unique global identifier for legal entities, aiding in regulatory compliance, transaction reporting, and proving the identity of financial entities.

Entities involved in significant financial transactions must obtain and renew their LEIs to ensure compliance with regulatory requirements and to facilitate seamless financial operations. The process of obtaining an LEI is streamlined, typically taking 24-36 hours, and can be managed efficiently through LEIL.

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