If you’ve never heard of the LEI code, now’s the time to find out what it’s all about. It is a mandatory legal entity identifier for some companies. The acronym stands for ‘Legal Entity Identifier’. Want to know more?
Since the Regulation and Directive on Financial Markets and Instruments came into force, it was ruled that all legal entities in charge of operating in the financial markets of Spain and the European Union are obliged to obtain the LEI code. In this way, the legal persons that carry out the financial transactions are identified in order to comply with the information requirements in the financial markets.
But what is its purpose?
The rules for obtaining the LEI code are applied with the intention of improving the management of financial risks, as well as making it easier for regulators to recognise possible systemic risks in the initial phases. To make this possible, this unique global code identifies the contracting parties to financial transactions.
Types of entities with the LEI code
The companies susceptible to possessing this identifier are, in the first place, those that are linked to the financial sector, although all companies that participate in derivatives trading are included.
It is important to note that individuals and branches whose head office is also in Spain are exempt from possessing this code.
The financial entities that must have the Legal Entity Identifier are the following:
– International Branches
– Counterparties for financial transactions
– Communities of Assets
– Entities that trade/issue shares or debt
– Investment vehicles (pension funds, investment funds, alternative investment vehicles, etc.)
– Entities under the supervision of a financial regulator and their affiliates, subsidiaries or holding companies
– Banks and finance companies
– Listed entities
If you still want to know more about the Legal Entity Identifier and you need to take steps to resolve some kind of related matter, do not hesitate to contact one of our gestores administrativos, trustworthy professionals.