A Legal Entity Identifier (or LEI is a 20-character code used to uniquely identify a company engaging in a to finansial transactions.

Since January 2018, all companies in the European Union are required to obtain an LEI code in order to buy or sell stocks and bonds. An LEI has been required when trading derivatives since November 2017.

The LEI system was initiated by the G20 countries in 2009.

LEIs are issued by Local Operating Units (LOU) that are accredited by the non-profit Global Legal Identifier Foundation (GLEIF). The GLEIF publishes records for all registered companies in the Global LEI Index. The data is made publicly available on their website.

The GLEIF is overseen by the Regulatory Oversight Committee (LEI ROC) – a group of 90 public authorities (mostly central banks) from more than 50 countries.

Company, trusts etc. registered in the European Union must have an LEI in order to buy or sell stocks, bonds, derivates etc. Your bank is required to register your LEI before executing your trade orders, so they will be able to tell you, if you need one.

Other juristions only use LEI codes for certain industries, especially in the financial sector.

LEI codes are issued by a Local Operating Unit (LOU). There are currently only 35 LOUs worldwide, and most of them are only accredited for a handful of countries.

There is no difference in the LEIs issued by cheap or expensive issuers. However, the issuers may differ with respect to e.g. the user-friendliness of the application processes, the languages supported in their communication, the payment methods accepted, and the processing time.

Most people will probably prefer an issuer that accepts payment with credit cards, unless they are familiar with international bank transfers, or the issuer is registered in their own country.