Regulatory support promotes the spread of the Legal Entity Identifier (LEI)

6 joulukuun 2024

The increasing importance of the Legal Entity Identifier (LEI) is reflected in its expanded use in global payment transactions and supply chains. Initially designed for the capital market, the LEI has now established itself as an indispensable instrument for the transparency and efficiency of financial transactions.

The role of the LEI in the global financial system

The Legal Entity Identifier (LEI) has become an essential building block in the global financial system. Its use extends far beyond its original purpose and now encompasses a wide range of applications. The LEI’s contribution to the security and efficiency of international transactions is particularly noteworthy, as it ensures unambiguous identification of all parties involved. Through its standardised use in international payment messages, the LEI promotes interoperability between different payment systems and thus reduces errors and delays. This is particularly important in fast-growing markets such as India.

India is crucial in promoting the Legal Entity Identifier in global payments. The Indian authorities have made the LEI mandatory for certain financial transactions, particularly in the trade finance and credit markets. These measures have significantly increased the use of the LEI in one of the world’s largest and most dynamic markets. India is thus sending a strong signal about the importance of transparency and security in international finance.

Regulatory support has been instrumental in establishing the LEI as a mandatory standard for financial transactions in 45 jurisdictions. This has led to an accelerated spread in global payment transactions. By integrating the LEI into payment messages, the originator and recipient of transactions can be identified in real-time. This reduces risks and ensures more efficient processing of international payments.

The advantages of the LEI for companies

The use of the Legal Entity Identifier (LEI) offers companies numerous advantages that go far beyond mere identification:

Improved transparency:

the LEI enables companies to identify their trading partners, reducing uncertainty and misunderstandings uniquely. This is particularly invaluable for international transactions.

Increased efficiency:

Companies can save time and money by automating processes and making accurate data quickly available. For example, the LEI speeds up payment processing by eliminating the need for time-consuming manual checks.

Strengthening competitiveness:

Companies that use the LEI can position themselves as trustworthy partners in the international market. This promotes business relationships and creates a solid foundation for growth.

Regulatory compliance:

The LEI makes it much easier to comply with legal requirements. Companies can quickly meet the requirements of supervisory authorities and optimise their internal processes simultaneously.

Risk minimisation:

The LEI reduces the risks of fraud and errors by ensuring clear identification of all transaction participants. This leads to more secure and reliable financial operations.

LEI and the future of global payments

The dissemination of the LEI is a decisive step towards a secure and efficient global financial system. Companies that use the LEI benefit from increased transparency and security and support the further development of international standards. Regulatory support and growing acceptance make the LEI indispensable to modern financial transactions.

Act now and benefit from the advantages of the LEI

For companies involved in cross-border payments, acquiring an LEI is essential. Start now and secure the benefits of optimised financial transactions. Visit our website to find out more and register your LEI number.