Who is the registration addressed to?
Registration in the register of the LEI code (Legal Entity Identification) is addressed to all legal persons (financial institutions) wishing to participate in financial transactions.
In Italy, registration in the register has been mandatory since 2018 and is aimed at:
- Banks and financial institutions
- Securities Service Provider
- Insurance companies
- Investment funds
The LEI code opens a new chapter in the archiving and standardization of data provided by financial entities with the aim of making transactions safer, more transparent, reducing their complexity.
Banks and investment services need to be sure that the trader has a valid LEI if they want to participate in the trading of financial instruments.
To keep securities it is not mandatory to have an LEI code only but recommended as an expired or invalid code could be an obstacle when you decide to sell the securities.
To whom should the registration be addressed?
Registration must be addressed to the local LOU (Local Operation Unit) of the area, the body will collect the data provided by the legal person through an online form according to the national legal structure and system.
The head office, registered office, company name and information on the ownership structure are reported in the 20-digit alphanumeric code and consists of:
- Characters 1 to 4: prefix of the LOU issuing the code
- Characters 5, 6: Characters set to 0
- Characters 7 to 18: specific entity code
- Characters 19, 20: control code
This code in turn follows the ISO 17442 standard which specifies the most important elements of this financial reform. The reason for this maneuver is understandable, to streamline the system it is necessary to adopt a single global data collection system, uniform to all legal entities operating in the financial market.
The first to use the LEI code and the GLEIS system (global LEI system) were the United States and the European Union as an interim measure. The LEI code register wants to be a global and transparent identification tool, in this huge database the information is stored with the aim of guaranteeing public access, ensuring that there is no use other than the public interest in the financial sector, capable of save time and improve risk management of a financial crisis.
Before a global standard, there were other directives: MiFID 2 – Markets in Financial Instruments Directive and EMIR.
The function was to establish the requirements relating to the introduction of a new financial instrument and authorization of investment companies in the markets to monitor, assess the risk of a transaction, repress market abuses where they occur and oblige these companies to fully transparency during a negotiation.
How to make the request?
The request can be made directly, through a delegate or a registration agent. Given the complexity of the matter in question it is advisable to entrust the registration to an intermediary who will deal with the entire case and to collect the information necessary for correct registration.
The cost to register and obtain the code is quite cheap and can be purchased for a period of 1, 3 and 5 years, for those who need it you can register for a few months.
It is important to remember the deadline to avoid a new registration, costs and registration times.
If for any reason one wants to cancel his registration, the early termination works exactly like a first activation, therefore obliged to a contextual publication.
Technology and safety
Technology, the emergence and development of applications have definitely made our lives easier, but at the same time they have put our personal information at risk of attack.
Just think of the amount of data on a credit card every time we make a purchase, our data is read and verified with the payment. This data also allows us to extract important information about someone's economic life.
In the LEI register, thanks to the transparency and completeness of information, we can check the validity of the code and view the data of the associated company.
This data provides important information in terms of authenticity and legal sanctions, two of the fundamental requirements underlying financial investments.
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/come-registrarsi-per-il-codice-lei/ on Sun, 09 Aug 2020 22:01:52 +0000.