Why the bank require LEI
If you want to be able to trade in securities with your company, you are required to register for LEI code. You will be notified of this when you’re about to perform a transaction, since the bank will require you to enter the company’s LEI number. The same rules apply regardless if you turn to HSBS, Barclays, Lloyds or Royal Bank of Scotland. It also applies if you turn to online brokers suchas IGor Hargreaves Lansdown – you can read more about registering LEI through IG and Hargreaves on our site.
Since 2018, all companies and legal entities must have a registered global identification, which is exactly what LEI codes are. LEI is short for Legal Entity Identifier.
Requirements for securities trading
Regardless if your selling or buying an existing holding, you will need a registered LEI code. This applies to trading in most types of securities, such as shares, derivates, bonds, exchange traded funds and interest rate swaps. It does however not apply for security transactions that take place in an endowment insurance. LEI is also not a requirement for private individuals who trade in the securities market.
The LEI requirement means better security for all parties involved in trading securities, since it makes it possible to track both buyer and seller in all transactions. In addition, it also gives authorities the opportunity to gain insight into the transactions that are made.
Notify the bank of your LEI number
If your company or organization trades in securities, your bank or online broker will request your LEI number in order to complete your transactions. For a smooth process, you can state your LEI number as soon as you contact your bank. You can also enter your LEI code in the settings of your internet bank or account at Avanza. In some cases, the LEI code can also be added automatically when it’s registered at GLEIF which is the organization behind the LEI system.
If you’re going to enter your LEI code manually into the bank’s system, please keep in mind that it might be a couple of days between receiving your LEI code and being able to register it at the bank. We recommend that you wait for 1-2 bank days before you try to register your LEI code in the bank’s system.
How to register for LEI
If you plan on trading in securities, you should make sure to register for LEI code if you don’t have one already. You can register with us at LEI certificate, we offer registration and renewal of LEI at a very competitive rate. You can see our full price list here.
If you’ve had a LEI code previously, but it has expired for some reason, you need to re-activate it in order for the LEI to be valid. You can do this by renewing your LEI code here. When renewing, you will keep the same code as you have used before. Your Legal Entity Identifier is valid for a year upon renewal, and you can search the GLEIF database in order to find out when your LEI needs to be re-activated.
MiFID 2 stands for Markets in Financial Instrument Directive 2 and what regulates the use of LEI codes. MiFID 2 has been active since January 3rd, 2018. Since that date, all companies and legal entities must have active LEI codes registered to them. Without a valid LEI code, all transactions that involve securities will be denied. The purpose of MiFID 2 is to create transparency in the financial market and protect the parties who are involved in trading.