All eligible market participants
Legal Entity Identifier Code for
participation in non-derivative markets
The Legal Entity Identifier
(LEI) code has been conceived of as a key measure to improve the quality
and accuracy of financial data systems for better risk management post the
Global Financial Crisis. The LEI is a 20-character unique identity code
assigned to entities who are parties to a financial transaction. Globally,
use of LEI has expanded beyond derivative reporting and it is being used in
areas relating to banking, securities market, credit rating, market
The LEI system has been implemented in a phased manner for participants
(other than individuals) in the over-the-counter markets for rupee interest
rate derivatives, foreign currency derivatives and credit derivatives in
India in terms of RBI circular FMRD.FMID No.
14/11.01.007/2016-17 dated June 1, 2017 and for large corporate
borrowers of banks in terms of RBI Circular
DBR.No.BP.BC.92/21.04.048/2017-18 dated November 2, 2017.
2. In the Statement on Developmental and Regulatory Policies, First Bi-monthly Monetary Policy Statement for 2018-19
(Paragraph No. 8), dated April 05, 2018, it was proposed to
implement the LEI mechanism for all financial market transactions
undertaken by non-individuals in interest rate, currency or credit markets
regulated by RBI. Accordingly, draft directions in this regard were issued
for public comments on June 20, 2018.
Based on comments received during the consultation, the directions on
requirement of LEI Code for participation in non-derivative markets have
been finalized as below.
3. All participants, other than
individuals, undertaking transactions in the markets regulated by RBI viz.,
Government securities markets, money markets (markets for any instrument
with a maturity of one year or less) and non-derivative forex markets
(transactions that settle on or before the spot date) shall obtain Legal
Entity Identifier (LEI) codes by the due date indicated in the schedule
given in Annex. Only those entities
that obtain an LEI code on or before the due dates applicable to them shall
be able to undertake transactions in these financial markets after the due
date, either as an issuer or as an investor or as a seller / buyer.
Transactions undertaken on recognized stock exchanges are outside the
purview of the LEI requirement.
4. In case of non-derivative
forex transactions, while all inter-bank transactions shall be subject to
LEI requirement, client transactions shall require LEI code for
transactions involving an amount equivalent to or exceeding USD one million
or equivalent thereof in other currencies.
5. Non-resident entities
undertaking financial transactions in the relevant markets shall also
require LEI code. Such entities that are not legal entities in their
country of incorporation (e.g., funds operated by a non-resident
parent/management company that are each registered as an FPI) shall use the
LEI code of the parent/management company.
6. Entities responsible for
executing transactions, reporting or for depository functions in these
markets shall capture the LEI code of the transacting participants in their
7. Entities can obtain LEI from
any of the Local Operating Units (LOUs) accredited by the Global Legal
Entity Identifier Foundation (GLEIF) (https://www.gleif.org/en).
In India LEI code may be obtained from Legal Entity Identifier India Ltd.
The rules, procedures and documentation requirements may be ascertained
from LEIL (https://www.ccilindia-lei.co.in/USR_FAQ_DOCS.aspx).
8. Entities undertaking
financial transactions shall ensure that their LEI code is considered
current under the rules of the Global LEI System. Lapsed LEI codes shall be
deemed invalid for transactions in markets regulated by RBI.
9. The Directions are issued
under section 45W, read with section 45U, of the Reserve Bank of India Act,
Chief General Manager
for Implementation of LEI in the Money market, G-sec market and Forex
Worth of Entities
above Rs.10000 million
April 30, 2019
between Rs.2000 million and Rs
August 31, 2019
up to Rs.2000 million
March 31, 2020