Is a code that identifies distinct legal entities that engage into Transfers, it is defined in lines with the ISO 17442 standards. It was developed as a global standard by the G20 in 2011 with the aim of having a possibility for Financial Institutions to identify organisations. LEI consists of a 20-character alphabetic string, with the characters identifying the Local Operating Unit (LOU) that issued the LEI. Characters 5 and 6 are reserved as '00'. Characters 7-18 are the unique alphanumeric string assigned to the organisation by the LOU. The final 2 characters are checksum digits.
LEIs work by assigning a unique identification code to the legal entity and Transfer. It is an identification code which is made to recognise all of the Transfers and entities. These codes are used to identify and manage financial risks and report any out of books or suspicious Transfers. The GLEIF helps to monitor the quality of the data contained in LEIs.