Legal Entity IdentifierLEI
A legal entity identifier is a 20-character code that uniquely identifies a company or other legal entity in financial transactions. In some jurisdictions, such as the EU, firms need one before they can trade securities.
Open a brokerage account for your company in the EU and the broker will ask for one thing before anything else: an LEI. Without that 20-character code, many firms simply cannot take your orders.
- Category
- Accounting, Tax and Operations
- Reading time
- 3 min
- Also called
- LEI, LEI code, LEI number
- Updated
The LEI in plain words
GLEIF describes the LEI as a unique 20-character alphanumeric code that identifies a legal entity.1
Each LEI is unique and belongs to just one legal entity.1
It follows the ISO 17442 standard and has the backing of the G20 and the Financial Stability Board.1
How to get and use an LEI, step by step
Check if you need one
Check whether you need one: in the EU, every legal-entity client of an investment firm does.2
Gather company data
Prepare registry number, address and ownership details.
Apply
Apply through an issuing organisation, or ask your firm to help you get one.2
Give it to your broker
Firms may not act on instructions from a client without an LEI.2
Used in reporting
Transaction reports include the LEI of firms and clients.2
Renew yearly
Keep the record current so it stays valid.
Worked examples
Example 1 — Reading the code
20 charactersA hypothetical LEI has 20 characters.
| Prefix + entity part | 18 characters |
| Check digits | 2 |
| Total | 18 + 2 = 20 |
An LEI is a unique 20-character alphanumeric code; GLEIF's own is 506700GE1G29325QX363.1
Example 2 — No LEI, no trade
Order blockedA hypothetical company tries to buy €50,000 of shares through an EU broker without an LEI.
| Order | €50,000 |
| Executed | €0 |
The “no-LEI-no-TRADE” rule prohibits EU firms acting for a client without an LEI.2
Example 3 — Cost vs delay
0.04%A hypothetical LEI costs €80 a year; a week-long delay holds up a €200,000 allocation.
| Annual cost | €80 |
| Cost as share of allocation | €80 ÷ €200,000 = 0.04% |
The LEI is a precondition for clients wishing to access EU markets, so getting it early is cheap insurance.2
LEI vs company registry number
| Aspect | LEI | Registry number |
|---|---|---|
| Scope | Global | One country |
| Format | 20 characters, ISO 17442 | Varies by country |
| Used for | Financial transactions and reporting | Company law |
| Renewal | Usually annual | Rarely |
Where LEIs are used
Company brokerage accounts
Needed before trading in many jurisdictions.
Derivatives reporting
Identifying both sides of a trade.
Regulatory reports
Linking transactions to entities.
Due diligence
Looking up a Broker or counterparty.
Advantages and disadvantages
Advantages
- One global ID for each entity.
- Makes regulatory reporting consistent.
- Public data helps check counterparties.
- Cheap and quick to obtain.
Disadvantages
- Annual renewal is easy to forget.
- Lapsed codes can block trading.
- Individuals cannot use it for personal accounts.
- Requirements differ by jurisdiction.
Going deeper
Read as far as you need. Each level builds on the one before it.
A global ID
Beginner
The LEI is a unique 20-character code for a legal entity.1
MiFID II
Intermediate
Under MiFID II, every legal-entity client of an EU investment firm needs an LEI — “no LEI, no trade”.2
Why regulators rely on it
Advanced
The LEI is the one data field that identifies a client uniquely and permanently, which is why transaction reporting relies on it.2
Common mistakes
Waiting until trade day
Applying only when an order is rejected.
Letting it lapse
Missing the annual renewal.
Assuming it's only EU
Other jurisdictions require LEIs for some activities.
Mixing up entities
Each subsidiary needs its own code.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- An LEI is a 20-character global entity ID.
- Each code represents one entity.
- EU firms need it before trading for clients.
- It is used in regulatory reporting.
- Rules differ by country.
Frequently asked questions
Do individuals need an LEI?
Who issues LEIs?
Is the LEI the same in every country?
Further learning
- Broker
Who will ask for your LEI.
- Counterparty Risk
Why identifying entities matters.
- Settlement
Where trade data flows.
- Order
What needs an LEI to execute.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.