This guide explains when an LEI is required versus when it is simply expected by banks or partners. It is vendor‑neutral, practical, and concise. Use the checklist and decision path below, then follow the links for regime‑specific details. This is information only, not legal advice.
Quick answer checklist
- Trading & transaction reporting (EU/UK). For MiFID II/MiFIR, legal‑entity clients typically need an LEI; many firms apply no LEI, no trade. See MiFID II and LEI.
- Derivatives reporting. EMIR identifies counterparties by LEI. See EMIR and LEI.
- Securities financing. SFTR uses LEIs for counterparties, reporting entities, intermediaries, and issuer LEIs for underlying securities. See SFTR and LEI.
- Bank onboarding & cross‑border services. Many institutions expect an LEI for KYB/KYC even when not explicitly mandated.
- Natural persons. Use national identifiers, not LEIs.
Decision path
Figure — A simple way to decide whether you need an LEI for a scenario.
By activity
Trading & transaction reporting
For EU/UK markets, firms typically require an LEI for legal‑entity clients when executing reportable transactions. See MiFID II and LEI.
Derivatives reporting
EMIR identifies counterparties, reporting entities, and certain intermediaries with LEIs. See EMIR and LEI.
Securities financing (repos, lending)
SFTR uses LEIs for counterparties, reporting entities, and issuer LEIs for underlying securities. See SFTR and LEI.
Bank onboarding & services
Banks and payment providers often expect an LEI for cross‑border services and KYB/KYC, even when a strict mandate is absent. Treat this as a practical requirement.
Procurement & due diligence
Public buyers and large enterprises may request an LEI to verify counterparties quickly. It does not replace tax or customs identifiers; it complements them.
By role
| Role | Typical identifier | Notes |
|---|---|---|
| Legal‑entity client / counterparty | LEI | Required/expected for trading and reporting contexts. |
| Natural person | National ID | LEIs are not for natural persons. |
| Reporting firm / venue | LEI | Issuer or firm LEI must be valid. |
| Issuer of instrument | LEI | Used in reference data; under SFTR also for underlying security issuers. |
| Intermediaries (broker/agent) | LEI | Where reported. |
Controls & good practice
- Pre‑trade: If the client is a legal entity, require a valid LEI; block execution otherwise.
- Onboarding: Validate format and check digits; match registry names exactly; store signatory evidence.
- Reporting: Use the correct identifier per role (LEI vs national ID) and monitor counterparty LEI status.
- Renewal: Renew annually; align with your compliance calendar and set reminders.
FAQ
Is an LEI mandatory for all companies?
No. It depends on your activities, reporting obligations, and counterpart expectations. Many cross‑border services will expect one.
Do sole proprietors need an LEI?
Only if they are treated as legal entities under local rules and participate in activities where LEIs are required or expected. Natural persons use national IDs.