A Legal Entity Identifier (LEI) is another “tool” to help prevent money-laundering, etc.
With effect from January 2018, I understand an entity will require an LEI to undertake any financial transaction. I believe this will also apply to your late Aunt Agatha’s executors selling her handful of shares in Lloyds Bank.
I understand “Entity” includes not just a corporate entity but also individual trusts and estates.
It is similar in effect to the identification and verification process for an individual, except that once the legal entity has an LEI, it only needs to quote it to any relevant service provider, rather than go through the whole process ever time.
When applying for an LEI, the “entity” needs to be able to refer to a source to confirm its identity. With companies, this can be straightforward – they are all registered at Companies House. However, with trusts there has been a lot of discussion, as there is no central record of trusts.
It has been suggested that where trust returns are made to HMRC, the UTR (unique taxpayer reference) will help enable the issue of an LEI, but I am not sure how far that discussion has progressed (or if every trust and estate actually has a UTR).
If there is a corporate trustee, I understand it will be possible for that trustee to obtain an LEI for its trusts more efficiently than for a trust with individual trustees.
Within the UK, an LEI is issued by The London Stock Exchange. There is a set-up fee and an annual fee.
It is good to know that at least some stockbrokers are warning their clients of the need for an LEI, rather than leaving it until the last moment.