chat icon
Camille Van Vyve

Camille Van Vyve

03 Jun 2024
Share on Linkedin Share on Facebook Share on Twitter Share on Twitter

Investing with your company: everything you need to know about the LEI code

In the financial world, LEI codes are essential for transparency and traceability in transactions. Whether you're looking to invest your company's excess liquidity or are simply curious, this article will explain everything you need to know about LEI codes.

Any company that wants to realize transactions on the financial markets needs a LEI code.

What is an LEI code?

The LEI (Legal Entity Identifier) is a unique identifier consisting of 20 alphanumeric characters. It is used to uniquely identify legal entities participating in financial markets transactions. LEI codes are standardized globally under ISO 17442. They provide information about the legal entity, such as the entity's official name, registered office address, country of incorporation, local business identification code, and entity status.

Which companies need an LEI code?

Any legal entity involved in financial markets transactions must obtain an LEI code. This includes:

When to apply for an LEI code?

It is crucial to apply for an LEI code before commencing any activity that requires its use. For instance, if you wish to invest your company’s cash, an LEI will be necessary. Generally, companies must obtain an LEI before trading derivatives, engaging in cross-border transactions, or complying with certain financial regulations.

 
         

Purpose of the LEI code

The LEI code plays a critical role in enhancing transparency in financial markets. It helps identify counterparties in financial transactions, reduces fraud risk, and improves the accuracy of financial reporting.

Who can apply for the LEI code within the company?

The application for an LEI code must be made by a person with legal authority to represent the legal entity. This can be:

How to apply for an LEI code?

Applying for an LEI code is typically done through accredited issuing organizations, known as Local Operating Units (LOUs). Here are the typical steps:

  1. Choose an issuer: select an accredited organization to issue LEI codes. Easyvest recommends using leicode.be.
  2. Complete the form: provide necessary information about your legal entity. Note that if the company is a subsidiary, you will need to provide consolidated accounts.
  3. Pay the fees: fees vary depending on the chosen issuer.
  4. Receive your LEI code: once your application is processed, you will receive your unique LEI code. In simple cases, this takes less than 24 hours.

Validity of an LEI code

An LEI code is valid for one year from the date of issuance, but some issuers offer automatic renewal for longer periods. To keep the LEI active, it must be renewed annually, which typically involves verifying the initially provided information and paying the fees.

Cost of an LEI code

The cost of obtaining and renewing an LEI code varies by issuer. On average, the initial registration fee ranges from 50 to 100 euros excluding VAT, and the annual renewal fee is slightly lower. Since this purchase is made by the company, the VAT is recoverable and the annual fees are deductible for the company.

The LEI is necessary to invest as a company with Easyvest

When a legal entity invests in stocks, bonds, or ETFs, it must apply for an LEI. Therefore, an LEI is required to open an Easyvest portfolio in the name of a company. This process can be particularly advantageous for managing a company’s excess liquidity through the liquidation reserve mechanism or for withdrawing liquidity from a company. If you want to know your potential return by investing your company's cash, start a simulation without delay on our website or contact one of our wealth managers.

Share on Linkedin Share on Facebook Share on Twitter Share on Twitter

Easyvest is a brand of EASYVEST NV/SA, with company number 0631.809.696, authorized and regulated by the Belgian Authority for Financial Services and Markets (FSMA) as a portfolio management company and as a broker in insurances, with registered office at Rue de Praetere 2/4, 1000 Brussels, Belgium. Copyright 2024 EASYVEST NV/SA. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in loss.