LEI code: why your bank requires it before an FX hedge, and how to obtain and renew it
Before an option or a non-deliverable forward, your bank asks for an LEI code. What this identifier is, why European regulation requires it, when it is not needed, how to obtain it from INSEE in France — and why an LEI that has not been renewed can block your hedges.
The request often comes at the wrong moment: the company wants to put an FX option or a collar in place, and the bank replies that it first needs its LEI code. For many mid-sized companies it is the first time they have heard of it. Getting one takes a day; forgetting it can block a hedge.
What the LEI is
The LEI (Legal Entity Identifier) is a 20-character alphanumeric code, defined by the ISO 17442 standard, that uniquely identifies a legal entity worldwide. The system is run by the Global Legal Entity Identifier Foundation (GLEIF), which publishes the database of all LEIs free of charge.
- Level 1 data answer the question "who is who": official name, address, registration number.
- Level 2 data answer the question "who owns whom": the direct parent and the ultimate parent, or the reason they are not reported.
Why your bank asks for it
The main reason is the European EMIR regulation. Derivative contracts must be reported to a trade repository, and each counterparty is identified there by its LEI.
Since 18 June 2020, with the reform known as EMIR Refit, the bank alone reports, and is responsible for reporting, the OTC derivatives concluded with its non-financial clients below the clearing threshold — the vast majority of mid-sized companies. The client must provide the information the bank cannot know by itself, and keep its LEI up to date. Without a valid LEI, the bank cannot report the trade.
Companies that buy securities also know the MiFID II "no LEI, no trade" rule: since 3 January 2018, a firm may not execute a reportable transaction for a legal entity without having obtained its LEI.
When it is needed, and when it is not
| Transaction | LEI required? | Why |
|---|---|---|
| Spot FX | No | It is not a derivative |
| Deliverable forward used to pay for identifiable goods, services or direct investment | Generally not | Excluded from the definition of financial instruments when used as a means of payment |
| Deliverable forward not linked to an identifiable payment | Yes | It is a derivative subject to EMIR |
| Non-deliverable forward (NDF) | Yes | Settled net, it cannot be a means of payment |
| Options, collars, accumulators, structures | Yes | They are derivatives subject to EMIR |
To benefit from the exclusion, a forward must meet several conditions: be concluded by a non-financial counterparty, be used to pay for identifiable goods, services or direct investment, be physically settled — each currency is exchanged in full at maturity —, and not be traded on a trading venue.
A company that today only uses payment forwards can therefore do without one — until the day it wants an option. Better to get it before you need it: it is a day's delay that will never come at a good time.
How to obtain it in France
For entities under French law, INSEE is the only issuer based in France accredited by GLEIF, since 2018. Other accredited issuers, based elsewhere, can also assign an LEI to a French entity.
- 1Create an account on INSEE's LEI France site
The lei-france.insee.fr site lets you attach the company to your personal account, using its SIREN number and the supporting documents requested.
- 2Declare the parent companies
A short questionnaire asks for the direct parent and the ultimate parent, or the applicable exception — for example, no parent company.
- 3Attach a mandate if needed
If the request is made on behalf of another company, a dated and signed mandate is required, with a Kbis extract if the company has no company stamp.
- 4Pay
By bank transfer or card. Once payment is validated, the invoice, which bears the LEI code, is sent overnight; the LEI is certified and visible on GLEIF's site the next business day.
| INSEE service | Fee | Validity |
|---|---|---|
| Initial issuance and certification | EUR 110 net of tax | 1 year |
| Renewal | EUR 50 net of tax | 1 year |
| Transfer of an existing LEI to INSEE | Free | The code stays the same |
Renewal: the trap
An LEI must be renewed every year: the data it carries must be verified no later than one year after the previous verification. INSEE allows renewal from six weeks before the expiry date.
Without renewal, the LEI moves to "LAPSED" status. GLEIF specifies that this status does not mean the company has ceased to exist, but that its data have not been verified on time. INSEE, for its part, states that an expired LEI can no longer be used.
The typical scenario: the LEI was obtained for a first option, then forgotten. A year later, the company wants to hedge a new order, and the bank, which must report the trade and cannot do so with a lapsed LEI, asks for it to be updated before dealing. The hedge waits — while the rate moves.
In a group: one LEI per entity
Each legal entity that trades derivatives needs its own LEI: the parent's LEI does not cover its subsidiaries. For a group, the task is to keep an up-to-date table of the LEIs of every entity that deals with banks, with their expiry dates, and to check that the ownership links reported to GLEIF are consistent between parent and subsidiaries.
The checklist
- Check whether the company already has an LEI: the search is free on GLEIF's site.
- If it has none and plans anything beyond payment forwards, apply now.
- Put the expiry date in the treasury calendar, with an alert six weeks ahead.
- Name a person responsible for renewal — and a back-up.
- In a group, keep the table of LEIs for each entity that trades derivatives.
- Tell the bank about any change of name, address or shareholding, and update it in the LEI.
Sources
- GLEIF, "Introducing the Legal Entity Identifier (LEI)", "Level 2 Data: Who Owns Whom", and "The Importance of Timely Renewal of Legal Entity Identifiers" (annual renewal, LAPSED status).
- INSEE, LEI France site: "La demande de LEI", "Tarifs LEI", "Le renouvellement de LEI" and "Le rôle de l'Insee" (accessed 17 October 2026).
- Regulation (EU) 2019/834 (EMIR Refit), amending Regulation (EU) No 648/2012: reporting by the financial counterparty on behalf of non-financial counterparties below the clearing threshold, since 18 June 2020.
- Delegated Regulation (EU) 2017/565, Article 10 (FX contracts used as a means of payment); Delegated Regulation (EU) 2017/590, Article 13(2) ("no LEI, no trade" rule).
- NatWest Markets, "Foreign Exchange Means of Payment Exclusion", client information note (conditions of the exclusion and consequences for the LEI).
Before signing an option, check its price
The LEI lets the bank deal; it says nothing about the price. The pricer recomputes the premium or guaranteed rate offered with current market data.
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Frequently asked questions
The questions finance departments ask most often on this topic
What is an LEI code?
It is a 20-character identifier, defined by the ISO 17442 standard, that uniquely identifies a legal entity worldwide. It is issued by organisations accredited by GLEIF, which publishes the database of all LEIs free of charge.
Is an LEI mandatory for an FX hedge?
It is required for derivatives subject to EMIR: options, collars, structures, non-deliverable forwards, and forwards not used to settle identifiable payments. A deliverable forward used as a means of payment for identifiable goods, services or direct investment is generally exempt, as is spot FX.
How much does an LEI cost in France?
At INSEE, EUR 110 net of tax for initial issuance and certification, valid for one year, then EUR 50 for each annual renewal. Transferring an existing LEI to INSEE is free. Private issuers set their own prices.
What happens if the LEI is not renewed?
It moves to "LAPSED" status. According to INSEE, it can then no longer be used. As the bank must report derivatives with a valid LEI, it may ask for it to be updated before dealing a new hedge.
Can a subsidiary use its parent's LEI?
No. Each legal entity that trades derivatives needs its own LEI. Links between the parent and its subsidiaries are reported in the Level 2 data of each LEI.
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