Introduction
A Legal Entity Identifier (LEI) is not just a one-time registration. It requires annual renewal to remain active and valid. Many businesses overlook this simple requirement, risking compliance issues and operational disruptions. But what really happens if your LEI expires?
Understanding LEI Validity
An LEI is valid for one year from the date of issuance or renewal. To maintain its “ACTIVE” status in the Global LEI System (GLEIS) database, it must be renewed every year with updated entity information if any changes have occurred.
What Does “Expired” Mean?
When an LEI expires:
- Its status changes to “LAPSED” in the GLEIF database.
- It remains visible but indicates to regulators and counterparties that it is not renewed or maintained.
Consequences of an Expired LEI
1. Regulatory Non-Compliance
– RBI and SEBI Requirements:
Entities without a valid LEI cannot:
- Trade in securities or derivatives
- Access certain banking facilities
- Participate in forex transactions
Both RBI and SEBI mandate an active LEI for all financial transactions within their purview.
2. Transaction Blocks
Banks and financial institutions are instructed to:
- Reject transactions where the LEI is expired
- Prevent further trading until the LEI is renewed and reactivated
This can result in business delays, blocked payments, and missed trading opportunities.
3. Penalties and Reputational Risk
In some cases, failing to maintain an active LEI can:
- Lead to penalties for non-compliance with regulatory guidelines
- Harm your company’s reputation with trading partners, investors, and stakeholders
4. Missed Renewal Discounts
Many registration agents offer early renewal discounts for multi-year renewals. Delaying until after expiry means you lose these cost benefits and face urgency charges.
How to Check Your LEI Status
You can easily check your LEI status on:
- GLEIF database (www.gleif.org)
- Your registration agent’s dashboard (if provided)
Search your LEI number to verify if it is ACTIVE, LAPSED, or INACTIVE.
How to Renew an Expired LEI
Renewal of an expired LEI follows the same process as renewing an active LEI:
- Submit renewal application with updated entity details
- Upload necessary documents for verification
- Make payment securely
- Receive reactivation confirmation within 1-2 working days
At MyLEI, we ensure:
- Fast renewal processing
- Verification of your details for accuracy
- Zero downtime in your compliance journey
Can I Renew Before Expiry?
Absolutely. It is recommended to renew at least 30 days before expiry to ensure uninterrupted validity and avoid last-minute rushes.
Benefits of Timely Renewal
– Uninterrupted business transactions
– Compliance with RBI, SEBI, and global regulations
– Peace of mind knowing your entity remains verified and recognized globally
Conclusion
An expired LEI can have serious operational and compliance impacts on your business. Ensure you set reminders and renew your LEI on time to avoid disruptions.
Is your LEI about to expire? Renew now with MyLEI for fast processing and continued compliance.
