Frequently Asked Questions (FAQ) on Legal Entity Identifier (LEI)

What is an LEI?

The Legal Entity Identifier (LEI) initiative is designed to create a global reference data system that uniquely identifies every legal entity, in any jurisdiction, that is party to a financial transaction. More specifically, LEI is a unique 20 digit code that is assigned to a legal entity.

What is the purpose of LEI?

The global LEI system (GLEIS) has been set up by regulatory authorities [including G20 and the Financial Sector Conduct Authority (FSCA)] to address the global financial crisis. The LEI is designed to enable the identification and linking of parties to financial transactions in order to manage counterparty risk. Its goal is to help improve the measuring and monitoring of systemic risk and support more cost-effective compliance with regulatory reporting requirements.

What is pre-LEI/LEI?

LEI codes will be issued by appointed Local Operating Units (LOUs). A Regulatory Oversight Committee (ROC) governs and regulates the Global LEI System. A Central Operating Unit (COU) will oversee the functions of LOUs when operational. Pending this, a pre-LEI code process has been established to assist relevant entities who are required to have a pre-LEI/LEI code. The Financial Services Board(FSB) of South Africa has sponsored Strate as pre-LOU and the ROC allocated a pre-LOU prefix to Strate (3789) to allow it to issue pre-LEI/ LEI codes.

How can I find out more about the global LEI system?

The website of the LEI Regulatory Oversight Committee (http://www.leiroc.org/) provides general information on the current status of the global LEI system.

What is the LEI structure?

How to register for LEI codes?

A legal entity seeking an LEI will need to make an online application through our web site (http://www.lei-Strate.co.za). The application should be made by duly authorised persons of the legal entity. Strate will then acknowledge receipt of the application by sending an email to the legal entity and will request supporting documents.

Who are the Authorized Signatories for a legal entity?

Strate will only accept application from duly authorised signatories of the legal entity. Authorized signatories of a legal entity are:
1. For companies, are the ones authorized by the Board Resolution,
2. For Trusts, are the ones authorized by the Board of Trustees Resolution,
3. For Societies, are the ones authorized by the Resolution of the Committee of Members,
4. For sole proprietorship concerns, is the proprietor himself or a duly authorized person appointed through a power of attorney,
5. For partnership firms and limited liability partnerships, are the partners themselves or an authorized person appointed through a power of attorney

How to apply for an LEI?

To apply for a legal entity identifier, an entity will have to submit the following information to Strate:

1. The official name of the legal entity as recorded in the business registry, or with the fund manager for collective investment vehicles, or otherwise in the entity constituting documents.

2. The address of the headquarters of the legal entity or the address of the fund manager.

3. The address of the legal formation.

4. The official business registry where the foundation of the legal entity is mandated to be recorded on the formation of the entity, where applicable.

5. The reference in the official business registry to the registered entity, where applicable. The applicants will also have to submit supporting documents as per the table below together with a proof of address.

Which Entities are eligible for an LEI

ISO 17442:2012 states that the ISO standard "specifies the elements of an unambiguous Legal Entity Identifier scheme to identify the legal entities relevant to any financial transaction.

The term "legal entities" includes, but is not limited to, unique parties that are legally or financially responsible for the performance of financial transactions or have the legal right in their jurisdiction to enter independently into legal contracts, regardless of whether they are incorporated or constituted in some other way (e.g. trust, partnership, contractual). It excludes natural persons, but includes governmental organizations and supranationals." (source: International Organisation for Standardisation, http://www.iso.org/iso/catalogue_detail?csnumber=59771)

Can individuals get an LEI?

Individuals/Natural persons are not eligible for LEIs.

What is the structure of the LEI code

The LEI definition currently relies on a standard published by the International Organisation for Standardisation (ISO) on 30 May 2012 ( ISO 17442:2012, Financial Services - Legal Entity Identifier (LEI) )

The number allocation scheme was further specified in Annex 2 of the Financial Stability Board's third progress note on the Global LEI Initiative on 24 October 2012:

* Characters 1-4: A four character prefix allocated uniquely to each Local Operating Unit (LOU) issuing LEIs. This prefix identifies (except for LEIs issued before 30 November 2012) the LOU that first issued the LEI and contributes to avoiding that different LOUs would assign the same LEI. However, the entity might have subsequently ported the maintenance of its LEI to a different LOU.
* Characters 5-6: Two reserved characters set to zero.
* Characters 7-18: Entity-specific part of the code generated and assigned by LOUs according to transparent, sound and robust allocation policies.
* Characters 19-20: Two check digits as described in the ISO 17442 standards. The check digit scheme follows ISO/IEC 7064 (MOD 97-10) and contributes to avoiding typing errors.

       Reference data:

As specified in ISO 17442:2012, the reference data stored in the LEI data base for each entity includes:

* The official name of the legal entity;
* The address of the headquarters of the legal entity;
* The address of legal formation;
* The date of the first LEI assignment;
* The date of last update of the LEI;
* The date of expiry, if applicable;
* For entities with a date of expiry, the reason for the expiry should be recorded, and if applicable, the LEI of the entity that acquired the expired entity;
* The official business registry where the foundation of the legal entity is mandated to be recorded on formation of the entity, where applicable;
* The reference in the official business registry to the registered entity, where applicable.

The Legal Entity Identifier Regulatory Oversight Committee( ROC ) adopted a common data format (CDF) in 2014 defining with more granularity the content of an LEI record.

Beyond the "level 1" "business card" information described above and already collected by the Global LEI System, the objective is to progressively extend the reference data to "level 2" data on relationships among entities. As a first step, the ROC established in December 2014 a task force to develop a proposal for collecting in the Global LEI System information on the direct and ultimate parents of legal entities. A public consultation is expected to be organized on this topic in the course of 2015. Phased implementation of such information is expected to begin around the end of 2015.

What is the cost of obtaining an LEI?

An entity that applies for an LEI should pay an initial allocation fee of R2,200 exclusive of VAT and an annual maintenance fee of R1,225 exclusive of VAT to Strate. Part of these fees will be passed on by Strate to the Global LEI Foundation. The fees may be reviewed in the future.