What is an LEI code?

Navigating the financial world with the LEI code

When it comes to transactions in the financial world, it’s all about transparency and reliability. And one of the key elements that promote this transparency is the Legal Entity Identifier (LEI) code. Find out below what an LEI code means and how Proboss helps with this.

What is an LEI code?

A Legal Entity Identifier (LEI) acts as a kind of “digital fingerprint” for a company or entity and provides a standardized method of identification in financial transactions and reporting. The LEI code was introduced in response to the 2008 global financial crisis, with the goal of promoting transparency and improving risk management in financial markets.

This code is a globally standardized set of numbers and letters specifically assigned to an entity, such as a company, organization or even an individual legal entity.

The code is standardized according to the ISO 17442 standard and consists of 20 alphanumeric characters. The first part of the code identifies the entity that requested the LEI, while the second part is a verification key used to ensure the uniqueness of the code.

Why is an LEI code important

Having an LEI code has become mandatory in the global financial sector because it helps reduce risk, improve transparency and promote market integrity. It allows financial institutions, regulators and other stakeholders to accurately identify the entities they do business with, which is vital to ensuring regulatory compliance and reducing fraudulent activity.

Renewal of LEI code

To ensure the accuracy of the data, in the Global LEI Pool, it is mandatory to renew the LEI code annually. This includes updating data linked to the code such as the address. This must be done within 12 months of expenditure.

If this is not done, you can no longer trade on financial markets (stocks, bonds, etc.). Due to the fact that this code is linked to a legal entity, it is not possible to request a new code. After expiration date, this code remains linked to the legal entity but is inactive until you renew it.

You can always check the renewal date of your LEI code via the GLEIF (Global Legal Entity Identifier Foundation) database.

Is an LEI code needed for anything else?

Proboss markets a stock option solution specifically designed for corporate directors. This solution allows directors to diversify their sources of remuneration and thus optimize their tax situation. To benefit from this advantageous solution, an LEI code is required.

Because we always want to offer a smooth and user-friendly solution, we at Proboss naturally ensure that the LEI code application is entered directly for our customers. As a farm manager, you do not have to worry about the administrative procedures involved in obtaining this code. Proboss takes care of everything so that you can use their solution with peace of mind and in full compliance with applicable regulations.

In short, obtaining an LEI code is not only a legal obligation, but also a guarantee of security and transparency for any company wishing to operate in the financial markets. With the LEI, managers can take full advantage of the benefits offered by Proboss’ stock option solution, while respecting international compliance and risk management standards.

Want to know more about the Proboss solution?