Authors note May 2018: Ubisecure is now an accredited LEI issuer and our Legal Entity Identifier service is now available at RapidLEI.com.
The LEI (Legal Entity Identifier) is a 20-digit, alpha-numeric code based on an international standard (ISO 17442) primarily used to uniquely identify a Legal Entity (LE) party to a financial transaction. For example, Ubisecure Oy’s Legal Entity Identifier is 529900T8BM49AURSDO55 – verifiable by LEI search.
Who is behind LEI?
An initiative endorsed by the G20 and operated by the Global Legal Entity Identifier Foundation (GLEIF) maintains a framework of policy and processes known as the Global Legal Entity Identifier System (GLEIS) – effectively a globally recognized identifier for an organization. Multiple Accredited LEI Issuers upload, and therefore maintain the open database of LEI’s therefore providing a trustworthy global business directory in order to verify counter parties to a transaction.
Today, the LEI code is used largely for organisations doing derivative transactions within financial markets, however, as with all good practice the LEI is finding wider adoption in other market segments where transparency, accountability and accuracy demands solutions with global support. Legal Entities that are required by their industry regulators to acquire a LEI code have a number of LEI issuers to choose from. To acquire a LEI code, check out the accredited issuers listed on the GLEIF website. Whilst the delivery timeframe for the LEI may be slow from some issuers, due in part to manual processing activities and the lack of a consistent data format from the underlying country specific registration authorities, enhanced competition from newer disruptive players will drive speed, accuracy and efficiency.
Future Use Cases for the LEI
So what innovative use cases will make these global identifiers interesting for service providers and web developers in the near future?
Let’s use a popular example many of us are familiar with to illustrate. Today, as individual consumers, we are able to utilize our social sign-in identity, provided to us as a consequence of using a social networking service, such as Facebook or Google, to dramatically simplify the sign-up and login process to web sites. The sheer scale of the numbers behind these social identities has paved the way for all stake holders to benefit from highly convenient authorization protocols. Service providers not only pass convenience on to the end user for registration and sign-in but also have the opportunity, through consent from the user registering for the service, to extract profile information (attributes) in order to provide more targeted content.
As a verified global identifier, the LEI code, when delivered as an attribute of an individual’s business identity, as opposed to an individual’s social identity, has the potential to provide significant cost savings through automation. Ultimately this will lead to more reliable decisions about who to do business with globally, as well as ensuring accurate Legal Entity Reference Data (LE-RD) is passed automatically as part of the on-boarding process. With 500,000 Legal Entities already possessing a LEI code and regulation driving millions more to obtain one, it will not be too long before these enhanced authorization models become the new norm.
Ubisecure has been helping our customers especially in the B2B identity management space to provide easy-to-use online services like the DNA’s My Company service that won the KuppingerCole’s Best B2B Identity project award. We are excited to see new identity initiatives like the Legal Entity Identifier to further help service providers to provide self-service based online services to their customers and provide operational cost-savings. Expect to hear more about our activities around the Legal Entity Identifier in our upcoming blogs.