In a digitally advancing world where companies can conclude transactions virtually without any in-person interaction, fraudulent activities have undermined confidence in digital authenticity. How does an organisation trust that a party to a financial markets transaction located across the globe is who they say they are? The process of confirming a stakeholder’s legal identity digitally has become an essential requirement and the Legal Entity Identifier (LEI) has become a key that enables the determination of a person’s identity for such financial market transactions.
The Legal Entity Identifier (“LEI”) system was developed in 2012 following the global financial crisis of 2007-2008. The aim was to, inter alia, create transparency within the financial markets in order to prevent anti-money laundering and financial fraud.