Guidelines on the use of the Legal Entity Identifier (LEI)

EIOPA | Westhafen Tower, Westhafenplatz 1 | 60327 Frankfurt | Germany Tel. +49 69-951119-20 info@eiopa.europa.eu | https://www.eiopa.europa.eu EIOPA-BoS-2021/456 30 September 2021

EIOPA Regular use 1./5

Guidelines on the Legal Entity Identifier (LEI)

INTRODUCTION

1. In accordance with Article 16 of Regulation (EU) No 1094/2010¹, EIOPA issues these revised Guidelines on the use of the Legal Entity Identifier (LEI).
2. As part of the review of the application of the Guidelines on the use of the Legal Entity Identifier (LEI) (EIOPA-BoS-14-026)², EIOPA concluded that the Guidelines should be revised to clarify their scope, taking into account changes in the use of the LEI code and its growing importance. Furthermore, where necessary, the revision should simplify and update the content of the Guidelines to facilitate and further promote the use of the LEI code as a unique identifier for legal persons subject to the supervisory powers of competent authorities.
3. These Guidelines are addressed to the competent authorities.
4. These Guidelines apply from 1 July 2022 and repeal and replace the Guidelines on the use of the Legal Entity Identifier (LEI) (EIOPA-BoS-14-026).
5. These Guidelines consider the need for the LEI code and identify the legal persons that should have an LEI code. The Guidelines do not specify when the LEI code should be used. The use of the LEI code in fulfilling future reporting and disclosure requirements will be incorporated into new or amended legislative acts.
6. As part of its participation in data standardisation initiatives, EIOPA continues to support the establishment of the Legal Entity Identifier system proposed by the Financial Stability Board and endorsed by the G20, which aims to ensure a unique global identification of parties in financial transactions.
7. These Guidelines continue the establishment of consistent, effective and efficient supervisory practice by harmonising legal person identification to ensure reliable and comparable high-quality data. The application of such data contributes to: a) better supervision and monitoring of financial institutions, as well as improved regulatory policies and decision-making procedures; b) identifying, assessing and monitoring risks, and reporting on risks threatening the financial stability of European insurance and pensions sectors; c) supporting EIOPA's overall work in the areas of crisis prevention, financial stability, supervision, policy and consumer protection.
8. The broader use of the LEI code for identifying legal persons under the supervision of competent authorities in different Member States would be particularly useful for classifying and aggregating data on legal persons operating cross-border, via subsidiaries established in other Member States or based on the freedom to provide services.
9. The LEI rules enable unambiguous identification of the aforementioned legal persons, thereby avoiding inconsistencies and ambiguities in identification using national codes or names of these legal persons. This categorisation improves the quality and timeliness of aggregated data at EU level and ultimately reduces the reporting burden applicable to reporting entities operating cross-border.
10. The use of common codes for the collection and dissemination of data from individual legal persons will also facilitate linking with different databases and other information sources available at national and international levels.
11. Given the benefits of the LEI code, these Guidelines encourage legal persons with registered offices in the EEA to obtain an LEI code for their subsidiaries established in third countries, as well as for legal persons from third countries and unregulated entities that are part of a group as defined in Article 212(1)(c) of Directive 2009/138/EZ³.
12. These Guidelines relate to legal persons subject to the supervisory powers of competent authorities. As such, the Guidelines do not generally apply to natural persons.
13. However, it should be noted that "individuals acting in a business capacity qualify for obtaining an LEI code, provided they carry out an independent business activity which is evidenced by registration in the commercial register, with one LEI issued for each individual, subject to appropriate checks ensuring that data protection, privacy or other obstacles do not prevent the publication of the current LEI code data file"⁴.
14. Therefore, for the purposes of these Guidelines, if natural persons act as cross-border intermediaries in the EEA, such natural persons should have an LEI code.
15. These Guidelines take into account the recommendations of the European Systemic Risk Board on identifying legal persons⁵ (particularly Recommendation B), which recommends to competent authorities⁶ to require or, where applicable, continue to require that all legal persons involved in financial transactions within their supervisory remit have an LEI code.
16. These Guidelines take into account the principle of proportionality and legal powers.
17. Unless otherwise defined in these Guidelines, terms have the meaning defined in Directive 2009/138/EZ, Directive (EU) 2016/2341⁷ and Directive (EU) 2016/97⁸. For the purposes of these Guidelines, the following definitions are used: a) LEI – Legal Entity Identifier consisting of 20 alphanumeric characters based on the ISO 17442 standard developed by the International Organization for Standardization (ISO). It is linked to key reference information enabling clear and unique identification of legal persons participating in financial transactions. Each LEI code contains information on the ownership structure of the legal person and thus answers the questions "who is who" and "who owns what". b) GLEIF – Global Legal Entity Identifier Foundation established by the Financial Stability Board in June 2014 and responsible for supporting the implementation and use of the Legal Entity Identifier. GLEIF's work is overseen by the LEI Regulatory Oversight Committee and it operates as the operational branch of the global Legal Entity Identifier system. GLEIF is a supranational non-profit organisation headquartered in Basel, Switzerland. c) GLEIS – Global Legal Entity Identifier System operating at three levels: the LEI Regulatory Oversight Committee, GLEIF and local operational units. d) The Financial Stability Board and the G20 group have endorsed LEI, GLEIF and GLEIS. e) LEI ROC – Regulatory Oversight Committee is a group of 69 full members and 19 observers from more than 50 countries established in January 2013 to coordinate and oversee the global framework for Legal Entity Identification, the Global Legal Entity Identifier System. f) LEI Issuers – local operational units that issue LEI codes. Local operational units are public services approved by the Regulatory Oversight Committee, or accredited by GLEIF under the oversight of the Committee, to provide registration services for LEI code applicants and other services. Local operational units provide registration, renewal of registration and other services and act as the main interface for legal persons wishing to obtain an LEI code.

Guideline No 1 – Scope of Legal Persons 18. Competent authorities should require at least the following legal persons subject to their supervisory powers to have an LEI code: a) legal persons within the scope of Directive 2009/138/EZ: (i) insurance and reinsurance undertakings; subsidiaries established in the EEA belonging to insurance and reinsurance undertakings with registered offices in the EEA may use the LEI codes of those insurance and reinsurance undertakings; (ii) the ultimate parent undertaking as defined in Article 215 of Directive 2009/138/EZ and all undertakings, except non-EEA undertakings and unregulated entities, within the group as defined in Article 212(1)(c) of Directive 2009/138/EZ; (iii) mixed insurance holding companies; (iv) subsidiaries established in the EEA belonging to insurance or reinsurance undertakings with registered offices in a third country; b) occupational pension institutions registered or authorised in accordance with Directive (EU) 2016/2341 and meeting one of the following conditions: (i) total balance sheet exceeds EUR 1 billion; or (ii) total balance sheet exceeds EUR 100 million and is less than EUR 1 billion, and the institution ranks among the five largest occupational pension institutions in terms of total balance sheet in the Member State; c) insurance and reinsurance intermediaries and ancillary insurance intermediaries operating cross-border in accordance with Directive (EU) 2016/97, provided they are subject to the supervisory powers of the competent authority.

Guideline No 2 – Provision of Information to EIOPA 19. Competent authorities should ensure that disaggregated information submitted to EIOPA regarding legal persons or groups of legal persons subject to their supervisory powers contains LEI codes in accordance with the requirements of these Guidelines. 20. Competent authorities should use the LEI code, where available, to identify information submitted to EIOPA regarding subsidiaries established in third countries belonging to an insurance or reinsurance undertaking with a registered office within the EEA.

Compliance and Reporting Rules 21. This document contains guidelines issued in accordance with Article 16 of Regulation (EU) No 1094/2010. In accordance with Article 16(3) of that Regulation, competent authorities and financial institutions must make every effort to comply with the guidelines and recommendations. 22. Competent authorities that are compliant or intend to comply with these Guidelines should incorporate them appropriately into their regulatory or supervisory framework. 23. Competent authorities should confirm to EIOPA whether they are compliant with these Guidelines or intend to comply, and state the reasons for non-compliance within two months of the publication of the translated versions. 24. In case competent authorities do not respond within the specified period, they will be considered non-compliant with reporting rules and reported as such.

Final Review Provision 25. These Guidelines are subject to review by EIOPA.

Footnotes: 1 Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, p. 48.) 2 EIOPA Guidelines on the use of the Legal Entity Identifier (LEI) (EIOPA-BoS-14-026), available at: https://www.eiopa.europa.eu/document-library/guidelines/guidelines-use-of-legal-entity-identifier_en. 3 Directive 2009/138/EZ of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1.) 4 LEI ROC, “Statement on individuals acting in a business capacity”, available at: https://www.leiroc.org/publications/gls/lou_20150930-1.pdf. 5 Recommendation of the European Systemic Risk Board of 24 September 2020 on identification of legal persons (ESRB/2020/12), available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32020Y1126(01)&qid=1606388881614&from=EN. 6 Recommendation of the European Systemic Risk Board of 24 September 2020 on identification of legal persons (ESRB/2020/12) (2020/C 403/01), section 2 point 1 – Definitions 7 Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (OJ L 354, 23.12.2016, p. 37.) 8 Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (recast) (OJ L 26, 2.2.2016, p. 19.)