LEIs must be renewed annually to remain ‘Active’. As the economy becomes more reliant on LEIs to facilitate trusted trade and identify organisations both in the physical and digital world, it’s critical that LEIs are renewed prior to lapsing.
Here are the top three reasons why you should never let your LEI lapse:
1. You risk non-compliance with dozens of different regulations
Over 120 rules contained within more than 40 regulations require LEIs to be used in various reporting situations. A further 55 rules request the use of LEIs. A growing number of regulations, like MiFIR and MiFID, state an obligation to renew the LEI to maintain compliance.
Lapsed LEIs used in regulated activities risk significant fines. In a landmark case reported by Securities Lending Times in October 2020, Morgan Stanley was fined $5m by the CFTC for failing to comply with data reporting obligations, including the use of lapsed LEIs.
2. Your record will contain out of date identity information
LEIs must be renewed to maintain an accurate record of the organisation. If an LEI lapses, no checks have been completed on what reference data may have changed. Only at the point of renewal will the organisation information be re-validated, and hence, kept up to date.
LEIs are increasingly used as the trust anchor point for organisation identity beyond just regulatory requirements. They are used in digital signatures within electronic documents, and represent the central identity in governance solutions like Ubisecure’s ‘Sign in with RapidLEI’. The GLEIF’s vendor relationship group and vetting agent model is driving adoption of LEIs to speed up banking onboarding and B2B KYC. All relying parties in such solutions require up to date, accurate legal entity reference data. Flagging a lapsed LEI will interrupt services, cause application errors, and may raise credibility issues about the organisation.
In coming months the LEI Record Conformity flag will be activated. The LEI status must be active to achieve the conformity flag. This binary flag is set to become a fundamental datapoint in many applications and workflows.
3. LEI records are historical and persistent
The LEI record maintains a full history of LEI record changes. The ‘Status’ field will record the change from ‘Issued’ to ‘Lapsed’, and the date it has lapsed. This entry is persistent, your once-lapsed status will never go away.
Lapsed LEI? Here’s what to do next…
To reactivate a lapsed LEI, you just need to renew it. We have a Team ready to help you around the clock:
If you’re unsure when your LEI expires, go to RapidLEI’s LEI Search service to find out. RapidLEI and our Partner Network offer multi-year LEIs that reduce lapse risk and automate the annual renewal process. Our teams also make sure your LEIs do not lapse by mistake. Visit rapidlei.com for more information.