One of the most common mistakes made by small business owners is to forget the legal framework that surrounds their business activity. Especially when working at all levels of the financial markets, there are a number of requirements that must be met by any natural or legal person. Among many, the legal entity identification code should be highlighted as one of the most important.
Commonly known as LEI registration (Legal entity identifier), this is nothing more than a code supporting the legal registration of a company participating in the financial markets. It is issued in accordance with the ISO 1744 standards that came into force in 2018.
A characteristic of the LEI number is that in many cases it is not mandatory. However, below we will explain why this is so beneficial for all legal entities participating in the financial markets, regardless of their size or tier.
What is its purpose and why is it useful to me?
The origin of the LEI register is based on the identification of all participants in the financial market. An identification code that allows tracking, evaluation and verification of every entity or person interacting within a market is a guarantee of reliability, measurement and indexing of market flow. In other words, it is a code that offers transparency and a better functioning of the stock market.
The 20-digit code is divided into the information identifying the company’s registered office, address, country, legal form and other corporate information. In this way, only with its LEI code, it is possible to identify multiple aspects of a company.
For any legal entity, large or small, operating in the financial markets, reliability is an imperative for success. Nobody invests where they don’t trust, so any tool that demonstrates transparency and legality contributes to the operational image of the companies.
We can also add other benefits of LEI registration such as:
- Registration and summary of your company data available for all users
- An international standard used in more than 195 countries is used
- Being part of a transparent and reliable database with an excellent reputation worldwide
- Faster and more efficient processes between institutions with LEI registration
- Functional in 100+ jurisdictions that require the use of LEI
So should I go for my LEI registration?
Deciding to create an LEI code is the first step in improving any company operating in the financial markets. It is enough to fill out a few forms to submit an application and in a short time you will receive your LEI number.
In addition, there are various tools that facilitate the process, here it is possible to find one of the best tools for request a LEI Registration. There you can request your code and get all relevant and pertinent information on how to use the legal entity identifier. In countries like Spain, this process takes no more than 15 working days. In addition, it remains valid for a year, although there are services that allow you to purchase it for several years.