LEI made mandatory for Non-Convertible Securities, Securitised Debt Instruments and Security Receipts

SEBI through its circular dated 3rd May, 2023 has made Legal Entity Identifier (LEI) code mandatory for issuer who have listed and/ or propose to list non-convertible securities, securitised debt instruments and security receipts.

LEI is a unique global identifier for legal entities participating in financial transactions. LEI is designed to create a global reference data system that uniquely identifies every legal entity, in any jurisdiction, that is party to a financial transaction. It is a unique 20-character code to identify legally distinct entities that engage in financial transactions.

Currently, RBI mandate non-individual borrowers having aggregate exposure of above Rs. 25 crores, to obtain LEI code. Now after this notification, issuers having outstanding listed non-convertible securities as on August 31, 2023, shall obtain and report LEI code in the Centralized Database of corporate bonds on or before September 1, 2023. Similarly, issuers having outstanding listed securitised debt instruments and security receipts as on August 31, 2023, shall Obtain and report LEI code to the Depositories, on or before September 1, 2023.

Further, issuers proposing to issue and list non-convertible securities, on or after September 01, 2023, shall report their LEI code in the Centralized Database of corporate bonds at the time of allotment of the ISIN. Similarly, issuers proposing to issue and list securitised debt instruments and security receipts, on or after September 01, 2023, shall report their LEI code to the Depositories at the time of allotment of the ISIN.

From where LEI code can be obtained

Entities can obtain the LEI code from any of the Local Operating Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF). In India, the LEI code may be obtained from Legal Entity Identifier India Ltd (LEIIL), a subsidiary of the Clearing Corporation of India Limited (CCIL), which has been recognized by the RBI as issuer of LEI under the Payment and Settlement Systems Act, 2007 and is accredited by the GLEIF as the LOU in India for issuance and management of LEI codes.

LEI Registration Process

1. Create your Companies account with Legal Entity Identifier India Limited and get your account activated.
2. Login to your account and fill the details- Company Information, Direct Parent (Holding Company Information), Ultimate Parent details etc.
3. Submitted the details and make payment.
4. Upload the documents as applicable.
5. After successful payment and documents verification, LEI Number will be issued.

Documents required for LEI Registration

1. Certificate of Incorporation/ Registration Certificate
2. Companies PAN Card
3. Undertaking- Cum-Indemnity as per LEIL format
4. Audited Financial Statements
5. Board Resolution for authority as per LEIL format
6. Power of Attorney (In case of delegation of authority)

We can advise and help you with your LEI Compliances.

The author can also be reached at csneharedekar@gmail.com

Disclaimer: Please note that the above article is based on the interpretation of related laws, which may differ from person to person and is not legal advice.