The base price to obtain an LEI is $20,000. That doesn’t sound like a lot of money until you realize that to have an LEI issued for your company, it must be legally confirmed in the jurisdiction where the entity exists. This could mean setting up shop in another country or incorporating in another state if your business already exists elsewhere. For this, you are looking at around $5,000 for legal fees.
We have seen businesses being priced as high as $25,000 for LEI registration. If you are registering your company in another country or state, be sure to ask about the costs of local incorporation or establishing a physical presence there, which is required to register for an LEI.
The first thing you should know about the LEI code is that it only needs to be obtained once. Subsequent LEI code renewals will not require an additional cost, but companies need to consider that they will be required to renew it after three years. Unfortunately, many companies forget about the renewal cost and start panicking when they see a bill come in for approximately near to $1590 within three years of having registered their LEI code, usually because the person or persons responsible for paying such costs moved on to other businesses or passed away without updating the company’s information.
The purpose of the Legal Entity Identifier (LEI) is simple yet complicated. The goal, which was set forth by regulators, is to track every financial transaction involved in a company’s operations. This would include daily changes made to the ownership or management structures of said company. A company registered with an LEI will use the same identification code for years or even decades to come. This means that if regulators identify a person of interest, it would be straightforward to find the connections between various companies and their owners/managers to determine a possible relationship.
Currently, both the U.S. and Canada struggle with LEI implementation due to differences in their business structures. However, other countries have already implemented this system. While it works out great for Europe, the Asia Pacific, and Latin America, Company registration requirements must be met before an LEI code can be issued.
So this means if you are a financial institution, a person or entity responsible for maintaining a CCP, a central securities depository, a trade repository, an insurance company, or any derivatives market, then you are going to have to register your LEI code. If none of these apply to you personally, then the chances are that having an LEI code isn’t necessary for the business. So first, think about whether or not this code is something that your business needs. The next thing you need to think about is that, although it can be substantial, the cost associated with getting an LEI code is relative in comparison to all of the other expenses related to running a business, so it is essential to weigh out everything before making any ultimate decisions on whether or not the code is worth it.
For starters, you need to know that there are three different tiers of LEI Code, with the most popular one being Standard Service. Upon registration, everyone will be assigned a certain tier level. The pricing for each tier ranges from $1295 per year up to $1590 per year. Pricing can vary so much because there are also three different levels within each tier: Bronze, Silver, and Gold Service.
The cost of obtaining an LEI code is pretty self-explanatory. The more services you select, the more money it will cost you. One thing to keep in mind is that there are some additional costs involved with each service tier level beyond what was paid for securing an LEI code initially. These extra fees can range from about $10 for each service tier level to $1000 or more, depending on your purchasing services. It is also essential to know that when it comes time for renewal, specific steps must be followed to avoid being assessed additional fees after three years. There are particular terms and conditions to these processes or putting in a bid with another Leasing Registrar to prevent using the company’s name for marketing purposes.