LEI Registration in India: Legal Framework & Compliance
What is an LEI?
A Legal Entity Identifier (LEI) is a unique 20-character alphanumeric code that distinctly identifies legal entities participating in financial transactions. It enhances transparency, facilitates regulatory reporting, and improves risk management in global financial markets.
Governing Acts, Sections & Rules
1. Reserve Bank of India (RBI) Directions
- RBI/2022-23/34: Mandates that non-individual borrowers with an aggregate exposure of ₹25 crore or more obtain an LEI code. This applies to entities borrowing from banks and non-banking financial companies (NBFCs) .
2. Securities and Exchange Board of India (SEBI) Circular
- SEBI/HO/AFD/AFD–PoD–2/CIR/P/2023/0127: Requires all non-individual Foreign Portfolio Investors (FPIs) to submit their LEI details during registration and KYC processes. Existing FPIs must update their LEI within 180 days to avoid account blocking .
3. Legal Entity Identifier India Ltd. (LEIL) Rules
- LEIL Rules: Govern the issuance and management of LEIs in India. Key provisions include:
- Self-registration: Entities must apply for LEI through self-registration; third-party applications are not permitted.
- Online Account: Applicants must create an online account on the LEIL portal to manage LEI-related activities.
- Document Verification: Submission of documents like Certificate of Incorporation, PAN, and address proof is required for verification .
Who Needs an LEI in India?
Entities required to obtain an LEI include:
- Corporate Borrowers: Entities with an outstanding credit of ₹25 crore or more from banks or NBFCs.
- FPIs: Non-individual FPIs must submit LEI details during registration and KYC processes.
- Large Value Transactions: Entities involved in large-value RTGS/NEFT transactions over ₹50 crore.
- Cross-Border Transactions: Entities engaging in capital or current account transactions under FEMA, 1999, exceeding specified thresholds.
Documents Required for LEI Registration
To register for an LEI, the following documents are typically required:
- Certificate of Incorporation: Proof of the entity’s legal existence.
- PAN Card: Permanent Account Number of the entity.
- Address Proof: Utility bill or lease agreement as proof of registered office address.
- Authorized Signatory KYC: Identity proof of the person authorized to apply for LEI.
- Parent Company Details (if applicable): Information about the parent company, if the entity is a subsidiary.
Procedure for LEI Registration
- Select an LOU: Choose a Local Operating Unit accredited by the Global Legal Entity Identifier Foundation (GLEIF). In India, Legal Entity Identifier India Ltd. (LEIL) is the designated LOU.
- Create an Online Account: Register on the LEIL portal to initiate the application process.
- Submit Application: Provide entity details and upload the required documents.
- Verification: LEIL verifies the submitted information and documents.
- Issuance of LEI: Upon successful verification, a 20-character LEI code is issued, valid for one year.
Advantages of LEI Registration
- Regulatory Compliance: Meets RBI and SEBI requirements for large-value transactions and financial reporting.
- Enhanced Transparency: Improves visibility and traceability of financial transactions.
- Risk Management: Aids in identifying and mitigating counterparty risks.
- Global Recognition: Facilitates participation in international financial markets.
- Investor Confidence: Boosts credibility among investors and stakeholders.
Renewal and Maintenance
- Annual Renewal: LEIs must be renewed annually to maintain validity.
- Data Updates: Entities are required to update their LEI information in case of any changes, such as changes in authorized signatories or corporate structure.
Penalties for Non-Compliance
Failure to obtain or renew an LEI as mandated by RBI and SEBI can result in:
- Account Restrictions: Blocking of accounts for FPIs and other entities failing to comply.
- Regulatory Actions: Imposition of penalties or other actions by regulatory authorities.
Our LEI Registration Services
At India Stat Filing, we offer comprehensive LEI registration services, including:
- Eligibility Assessment: Determining whether your entity requires an LEI.
- Documentation Assistance: Guidance on preparing and submitting the necessary documents.
- Application Filing: Assistance in completing and submitting the LEI application.
- Renewal Services: Timely reminders and support for LEI renewal.
- Compliance Advisory: Ensuring adherence to RBI, SEBI, and LEIL regulations.
Our Commitment
At India Stat Filing, we simplify MSME registration and help businesses leverage all financial, legal, and operational benefits. From document verification to online filing, we ensure hassle-free registration and seamless access to government schemes.