G20 Countries are pushing for the Legal Entity Identifier as effective mechanism of tracking the entities with Unique 20 Digit code. India is pushing this initiative through RBI.
In India, the LEI is issued by the Legal Entity Identifier India Ltd. (LEIL), a wholly-owned subsidiary of the Clearing Corporation of India, and is governed by the Reserve Bank of India.
In the U.S., the sponsoring authority is the U.S. Commodity Futures Trading Commission – but private financial services player, Bloomberg, is also authorised to issue LEIs. In China, it is the China Financial Standardisation Technical Committee. In India there are no private organisations who are directly issuing LEI.
Mandatory LEI for Market Participants
All participants, other than individuals, undertaking transactions in the markets regulated by the RBI such as government securities markets, money markets (markets for any instrument with a maturity of one year or less) and non-derivative forex markets are required to obtain LEI codes.
The LEI code has been conceived of as a key measure to improve the quality and accuracy of financial data systems for better risk management post the global financial crisis.
Timelines to obtain Legal Entity Identifier Code
RBI in its November 2, 2017 Notification has specified introducing LEI in a phased manner for large corporate borrowers having fund and non-fund exposure of Rs 5 crore and above. Below table cites the deadlines for corporates to get LEI issued.
Schedule for implementation of LEI
|Total Exposure of Banks||LEI to be Obtained by|
|₹ 1000 crore and above||Mar 31, 2018|
|Between ₹ 500 crore and ₹ 1000 crore||Jun 30, 2018|
|Between ₹ 100 crore and ₹ 500 crore||Mar 31, 2019|
|Between ₹ 50 crore and ₹ 100 crore||Dec 31, 2019|