Taking a hard position, annual renewal of your Legal Entity Identifier is required. By the GLEIF. They bake it into the LEI record. A red or green dot indicates whether the LEI has been renewed within the required time frame. Why demand renewals? So data can be self-attested. The registrant accounts for changes in company name, address, ownership structure, and officer roles. Or simply affirms nothing has changed. Anything can be challenged by an outside party.

Red LAPSED -- ༼ つ ◕_◕ ༽つ

When looking at a LEI record, a red dot next to the word Lapsed under Registration Status shows the entity has failed to renew.

Globally, 30.8% of LEIs are Lapsed. Let's consider some factors for why this might be:

  • Enforceability: Implementation occurs on a jurisdictional basis. The GLEIF works very hard as a non-profit to promote best practices surrounding LEI data quality, but enforcement is left to regulatory bodies overseeing areas where LEI usage has been implemented. View a comprehensive list here. Firms are required or requested to have a LEI; whether the annual renewal standard is met is often inconsequential.

  • Cost: Renewing a LEI costs money. Generally, the cost of renewal will be less than registration. But what reason is there spend money less any material penalty?

  • Awareness: Firms deal with an array of mental burdens. Renewing a LEI costs time. Employees charged with management may be unaware of the requirement or prioritize other duties. Outsourcing to a dedicated provider could help solve this issue.

Green ISSUED -- (￣︶￣*))

Still, the necessity is obvious for some. Those subject to MiFID II operate under a strict no-LEI-no-TRADE rule. This policy demands fresh data yearly. But that's not everyone. Why else would doing annual LEI renewals be beneficial?

The strength of brand loyalty begins with how your product makes people feel. - Jay Samit

  • Conformity Flag: Besides the green or red dot, look for a holistic compliance indicator to appear on all LEI records in 2021. GLEIF CEO Stephen Wolf referenced roll-out of the Conformity Flag feature during a recent webinar. Registration Status will contribute to entities being deemed in alignment with LEI ROC policy, and thus suitable for receiving the binary indicator.

  • Improved KYC/KYB: Further expedite on-boarding, KYC, and any other validation process which uses the LEI. Applications built on a Lapsed Registration Status suffer. Reconciliation against other data sources will take longer. Staying current means checks are more likely to be validated. Less work keeps everyone happy.

Solution: Extend, Extend, Extend

We call it Extension because the LEI can always be renewed. Falling into a Lapsed status doesn't mean your company will suffer any penalties, unless mandated so by a specific piece of reporting. The GLEIF will never stand in the way of a business wanting to self-attest fresh, up-to-date data. This is essential for maintaining the LEI system's integrity as a whole. Extend before or after your renewal date.

The renewal date will be set exactly 1-year from the date the LEI was issued. Not when you payed for it. Obtain the date from the LEI record. A subscription-based service automates payment, making LEI renewal a set-it-and-forget-it business process. Outsourcing management can also be beneficial to companies with large portfolios. Otherwise, stay Issued through internal due diligence.

Your 20-digit code will never change; not if renewed, not if management transfers from one LOU to another. The LEI encapsulates one legal entity forever within its alphanumeric code. Choose a dedicated provider and automated payment to assure your LEI never slips through the compliance cracks. As a living business record, promote the ultimate in corporate-facing trust.