The Legal Entity Identifier (LEI) is a unique 20-digit alpha-numeric code used in identifying every legal entity participating in securities and financial transactions in the market. It enables a unique identification of companies, at the global level that are involved in international financial markets.
This code is different from the International Securities Identification Number (ISIN) code which identifies local symbols for International investors' usage. The LEI identifies all participants in securities dealings, ISIN code is used by international investors to identify our local securities. The LEI is issued by the Local Operating Unit (LOU) which makes their identities clear when they participate in financial transactions.
The Local Operating Units (LOU or pre-LOU) are components of the LEI system that issue pre-LEIs to entities that require a code to comply with the regulatory mandates related to identification of counterparties for reporting of derivatives transactions to Trade Repositories.
15th May 2014, the LEI ROC (Regulatory Oversight Committee) endorses 27 pre-LOUs that are operational including the CSCS (Central Securities Clearing System) Plc. Nigeria as sponsored by the Securities and Exchange Commission (SEC) Nigeria.
Improved risk management: The LEI would enable firms to strengthen the accuracy, integrity, and aggregation of data across entities and subsidiaries and thus improve counterparty risk data and management, as well as supporting enhanced data modeling and analysis.
Enhanced regulatory reporting: A global LEI system should lead to more precise and accurate regulatory reporting, as well as supporting the production of data for recovery and resolution planning.
Portability: Pre-LEI data will be allowed for movements from one Pre-LOU to another in the event of relocation to another jurisdiction.
Operational efficiency: For easy reconciliation of data.
Global unique number.