LOU: Assignment and Verification of LEIs, Transmission to GLEIF

What is LEI?

The Legal Entity Identifier (LEI) is a code designed to uniquely identify legal entities in accordance with the ISO 17442 standard and to be used in their transactions and reporting in financial markets.

The Regulatory Oversight Committee (ROC) established at the Financial Stability Board (FSB) is the international body responsible for standard-setting and operational oversight and coordination of the Global LEI System (GLEIS). The ROC, in turn, established the Global LEI Foundation (GLEIF), an organization tasked with supporting and developing the GLEIS and accrediting Local Operating Units (LOU) that assign and maintain LEIs.

Background

The global community, in particular the Group of Twenty (G20) countries, have long been making efforts to introduce common global standards for codification and identification of financial and securities market entities.

The global crisis of 2008-2009 made it necessary also to improve the transparency of companies involved in financial transactions, in addition to the need to harmonize financial transaction formats, which should have helped regulators and oversight bodies better control and manage systemic risks in the financial market.

To achieve that objective, the G20 took a decision to create a global system for identification of legal entities the purpose of which was not only to identify participants of financial transactions, but also to assess financial risks of transactions with the help of companies' reference data recorded in the GLEIS and updated by companies on a regular basis. The G20 called on the Financial Stability Board to establish global infrastructure that, under supervision by the ROC, would contribute to addressing those tasks.

LEI assignment purpose and procedure

A LEI allows to unambiguously identify a legal entity both in the domestic market (in particular, Russian market) and in transactions of that legal entity in other countries and globally.

NSD is a Local Operating Unit (LOU) accredited by GLEIF to assign LEIs. NSD was granted the accredited LOU status on 5 January 2018 instead of the pre-LOU status. NSD had been acting as pre-LOU since 1 March 2013. The pre-LOU status had been received by NSD with assistance from Russian authorities involved in the ROC's efforts to create GLEIS.

A LEI is assigned to a legal entity either at its request or at the request of a person authorized by the legal entity.

The list of LEIs assigned by NSD is available at www.lei-code.ru, as well as in the GLEIF database to which NSD transmits LEIs in the format required by the GLEIF.

In addition to a legal entity's LEI, publicly available data include the legal entity's key reference data required by the ISO 17442 standard, including the official name, registered address, and other data. The LEI data pool also includes the ‘Level 2’ data of parent companies of LEI owners and information on their connections with subsidiaries through LEIs.

Advantages

Playing a key role in the Russian market, NSD holds information for almost all Russian legal entities involved in financial transactions. At the request of a legal entity, NSD may use that information to assign a LEI to the legal entity and to keep the LEI up-to-date in the Global LEI System.

A LEI helps:

  • Minimize the probability of mistakes in transactions.
  • Simplify regulatory reporting processes.
  • Unambiguously identify counterparties, issuers, or other financial market participants.

LEI usage

A LEI is used:

  • As a global identifier when compiling lists of securities holders or lists of persons exercising the rights attached to securities. In accordance with Federal Law No. 39-FZ dated 22 April 1996 "On the Securities Market" (the "Law"), when compiling a list of securities holders or a list of persons exercising the rights attached to securities, it is required to indicate the global identifier of the entity that keeps records of the rights to securities of securities holders and of persons exercising the rights attached to securities. Detailed information on how to use a global identifier is provided in Articles 8.6-1 and 8.7-1 of the Law and is also available here.
  • As a global identifier of legal entities for the purposes of reporting OTC repo and derivative trades. In accordance with paragraph 13 of Bank of Russia's Directive No. 4104-U dated 16 August 2016, a trade repository shall refuse to make a data entry in the contracts register if a party to the contract who is obliged to report its trades to the trade repository, or the reporting agent, does not have a LEI. Detailed information on NSD's Trade Repository and on the procedure for reporting OTC repo and derivative trades is available here.
  • As a global identifier of a non-Russian issuer in reports on portfolio investments in non-Russian securities to the Bank of Russia. In accordance with Bank of Russia's Directive No. 5010-U dated 14 December 2018, in a report on portfolio investments in non-Russian securities, which is to be submitted to the Bank of Russia, it is required to provide the 20-character legal entity identifiers (LEIs) of the relevant non-Russian issuers. Detailed information on how to use LEIs is provided in Chapter 4 of Bank of Russia's Directive No. 5010-U.

How to get assigned a LEI?

Detailed information on how to get assigned a LEI is available at www.lei-code.ru.


For further information, please contact the Client Relations Unit (tel.: +7 495 956-27-90/91) or NSD's regional representatives.

FAQ

How frequently is it required to verify the LEI?

LEI verification takes place once a year.

Does NSD assign LEIs to its clients only?

No, NSD may assign LEIs to any legal entities.

When and how can we receive a bill for the assignment/verification of our LEI?

A bill will be issued within two business days following the entry of your application for LEI assignment/verification in NSD's system. Moscow-based clients may collect a bill from NSD's Client Relations Unit from 9:30 to 17:00 on business days. Bills issued to regional clients are mailed by Post of Russia.

Are there any requirements to secure binding of a document entitled "Parent Company's Details"?

There are no specific requirements. The only requirement is that the document has to be bound, but not provided on separate sheets.

How can we know the next date of LEI verification?

Information is available here: https://www.lei-code.ru/en/db/guide/.

How much does LEI assignment/verification cost?

For information on the applicable fees, please see https://www.lei-code.ru/en/fees/.

May a non-Russian legal entity be assigned a LEI by NSD?

Yes, if it is incorporated in one of the jurisdictions in which NSD is accredited to assign and maintain LEIs. Detailed information and the list of jurisdictions in which NSD is accredited by GLEIF are available at https://www.lei-code.ru/en/services/serv_jur/.

What will happen to the LEI if it is not verified in due time?

If your LEI is not verified (renewed) in due time, its status will change to LAPSED. This could affect your transactions in markets in which a LEI status is controlled in accordance with legal requirements.

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