LEI Regulation Spotlight
FATF Recommendations 16 & 24
Understand how FATF Recommendations call for transparency in payments and beneficial ownership, and how the Legal Entity Identifier (LEI) helps financial institutions verify and trace entities across payment and ownership networks.
Overview
The Financial Action Task Force (FATF) develops global standards to combat money laundering and terrorist financing. Recommendation 16 addresses originator and beneficiary information in payment transfers, and Recommendation 24 focuses on transparency of beneficial ownership.
FATF Recommendation 16: Payments Transparency
The June 2025 update clarifies that payment messages must carry accurate originator and beneficiary information and that all entities in the chain are accountable.
FATF Recommendation 24: Beneficial Ownership
The updated also requires access to adequate, accurate and up-to-date information on ownership and control of legal entities. The LEI system supports this requirement via Level 2 relationship data and open data.
Objectives and scope
Both recommendations aim to ensure authorities can trace the flow of funds and the ownership of legal entities. FATF members, representing over 200 jurisdictions, must implement these requirements through national laws and supervision frameworks.
FATF encourages the use of LEIs to strengthen data quality and interoperability:
- Under Recommendation 16, LEIs can be embedded in ISO 20022 payment message fields to identify the originator and beneficiary legal entities.
- Under Recommendation 24, LEIs and GLEIF Level 2 relationship data can link parent and subsidiary entities in beneficial-ownership registries.
These uses enhance transparency and support coordinated AML/CFT monitoring.
Why organisation identity matters
Cross-border payment and ownership data are often inconsistent across jurisdictions. Name-based identifiers can lead to ambiguity, delays, and compliance gaps.
The LEI offers a standardised, globally unique identifier that helps financial institutions verify and trace entities across payment and ownership networks.
Implementation insight
To align with FATF Recommendations 16 & 24:
Request
Request LEIs from corporate customers during onboarding
Include
Include LEIs in payment and remittance messages
Relationships
Use GLEIS Level 2 relationship data to map ownership hierarchies
RapidLEI support and next steps
RapidLEI provides automated LEI registration, renewal, and validation services that support FATF 16 and 24 objectives. Our API and tools enable banks, PSPs, and VASPs to link LEI data directly into AML/KYC systems, strengthening transparency and auditability.
Key resources
- What is an LEI? An introduction to Legal Entity Identifiers and the LEI ecosystem
- FATF Recommendation 16
- FATF Recommendation 24
- RapidLEI White Paper: Achieving FATF Compliance with the LEI