Legal Identity Identifier identifies each entity or legal structure that is a party of any financial transaction and is a worldwide reference number. Legal Entity Identifier India Limited is the Local Operating Unit for the issuance of these.
Legal Entity Identifier India Limited is a fully-owned subsidiary of The Clearing Corporation of India Ltd., and it serves as a Local Operating Unit for the issuance of internationally compatible Legal Entity Identifiers in India. Under the Payment and Settlement Systems Act of 2007, the Reserve Bank of India recognises Legal Entity Identifier India Limited as an “issuer” of Legal Entity Identifiers. The Global Entity Identifier Foundation has accredited Legal Entity Identifier India Limited as a Local Operation Unit to issue and manage Legal Entity Identifiers.
Why Does An Organisation Require a Legal Entity Identifier?
A Legal Entity Identifier is basically a worldwide reference number used to distinctly identify each legal structure or entity that is a party of any financial transaction. Legal Entity Identifier India Limited shall assign Legal Entity Identifiers to legal entities such as banks, intermediary institutions, trusts, mutual funds, holdings, partnership firms, asset management companies (AMCs), special purpose vehicles (SPVs), and any other institution that is party to a financial transaction.
A Legal Entity Identifier shall act as an identity proof for financial entities, ensure that the reporting of transactions is facilitated to Trade Repositories, and aid in ensuring that regulatory requirements are abided by.
Legal Entity Identifiers Code
ISO Standard 17442 determines the global Legal Entity Identifiers’ structure in detail, and takes into consideration Financial Stability Board stipulations.
Legal Entity Identifier India Limited as a Local Operation Unit
The Clearing Corporation of India Ltd., offers a number of services which make it possible to carry out trading on state-of-the-art Trading Platforms and ensures that trade is reported to an extensive Trade Repository. It also offers a variety of post-trade services and ensures that all trades are settled through its Central Counter Party services. A Legal Entity Identifier at all stages shall be an efficient value-addition. Legal Entity Identifier India Limited uses the expertise of the Clearing Corporation of India Ltd. for trading, reporting, as well as settlement engines in an effort to bring to users the Legal Entity Identifiers web portal which offers a variety of benefits which are as follows:
- Self-registration: It is easy to set up the system.
- Challenges: It ensures that all the information of the entity is maintained in a proactive manner.
- Advanced search and filter: It aids in finding data quickly, including data related to foreign Legal Entity Identifiers.
- Accuracy: It carries out rigorous checks using consolidated databases from a variety of Local Operation Units, thereby making it highly reliable.
- Simple interface: The user guide and frequently asked questions (FAQs) are fairly simple.
- Reserve Bank of India Mandate
A mandate has been issued by the Reserve Bank of India which has made it compulsory for corporate borrowers with aggregate fund-based as well as non-fund based exposure in excess of Rs.5 crore from any financial institution to ensure that they have Legal Entity Identifier registration. The registration will also have to be captured in the Central Repository of Information on Large Credits (CRILC). Doing so will help in assessing aggregate borrowing by corporate entities or groups in addition to monitoring a group or entity’s financial profile. The following is the schedule drafted by the Reserve Bank of India for the implementation of Legal Entity Identifiers:
|Overall Exposure to SCBs||Due Date for Completion|
|Rs.1,000 crore and more||31 March, 2018|
|Rs.500 crore to Rs.1,000 crore||30 June, 2018|
|Rs.100 crore to Rs.500 crore||31 March, 2019|
|Rs.50 crore to Rs.100 crore||31 December, 2019|
How to Obtain Legal Entity Identifiers
The following is the process to be followed for obtaining a Legal Entity Identifier:
- Self-registration with the Legal Entity Identifier.
- Courier the annual report, declaration, and board resolution to the Legal Entity Identifier.
- Document verification.
- Once the documents have been successfully verified, fees must be paid so that a Legal Entity Identifier is issued. The total fees will be Rs.7,000 + GST @ 18% = Rs.8,260.