4 Misconceptions about Legal Entity Identifier that You Need to Get Rid of

16 Jul 4 Misconceptions about Legal Entity Identifier that You Need to Get Rid of

If you work in the finance industry within Operations or as a Trader, then you must have already heard about Legal Entity Identifier. Yes, you guessed it right – it is referred to that process through which you can find out certain details and potential of a particular company. However, if you are one of them who have no clue about it and just believe the myths that are there in the market, then you need to give this write-up a thorough read. You need to eradicate these silly misconceptions from your head right away!

Please keep reading.

LEI Search is not That Important – First things first – there are many who will tell you that LEI search is not that important before entering a relationship with a company. However, it would be great for you if you do not pay heed to such misconceptions and take the help of Legal Entity Identifier for finding out the credibility of a company or fund. It is safe, secure, maintained and updated by experts on a regular basis and sometimes, this check is mandatory as well as per the EU directive (MiFID II) introduced in January 2018. The LEI can actually save you from getting trapped into financial frauds, cyber crimes, etc. You can bid goodbye to the vulnerability of transactions and the risk of being cheated on with LEI.

It is Very Difficult to Get the Data – Another common misconception is that people would tell you about the difficulty of obtaining the data. However, it is not at all the case. There are various tools available in the market, which can help you with your LEI database search. These are basically professional applications that are linked to secure global database. Thus, you will only get authentic information from there.

A Layman cannot Handle the Data – Another unfortunate yet common myth is that a layman cannot handle LEI database search. You need to be skilled or a professional to do it, It is not the case. Anyone can do it as these sites are really easy to use. Once you get to know about a good site, all you need to do is enter the name of the company you want the details about or its unique registration details, and you will get your data. You can also download and save it for future references. People can also check the enlisted organisations from there.

LEI has no Relation with the London stock exchange: If you have been living with this myth, then let us tell you that London Stock Exchange allocates LEIs to all local legal units which apply from the United Kingdom. It basically acts as the Local Operating Unit (LOU), which processes the applications of the legal entities on the basis of the guidelines provided by ROC. Any further reason to have doubts?

The idea of LEI has been endorsed by the G20 nations with the intention of reducing financial frauds. It is basically a filter, with the use of which people can feel safer and secure. Any registered company would have its details here, which can be checked by anyone from around the world.

So, now that you know it all, hopefully you will make a smart move before making an investment or collaborating with a partner. It is important for you to take a look at a few things before making your call! It is always better to be safe than sorry, right? All the best! And to know how to find LEI, keep a check on this section.