What happens when the LEI expires?
In the increasingly digitally connected world - the need for trust and transparency has become one of the main concerns. For this reason, information related to your Legal Entity Identifier (LEI) number needs annual renewal. Failing to renew your LEI can bring inconveniences and, at times, become quite costly to your business.
What Does It Mean to Be "Lapsed?"
All businesses must renew their LEI registration annually on the day they initially registered. Failure to do so moves the company from "Active" to "Lapsed" status. A lapsed LEI can impact your business in many ways.
You Can Get Fined
Failing to renew your registration can result in severe penalties. Many large companies, such as Morgan Stanley, have failed to maintain their status up-to-date and faced significant fines. For instance, Morgan Stanley has assessed a $5 million penalty for not updating information related to the Legal Entity Identifier (LEI).
Your organization may not face such stiff penalties, but it is not worth the risk.
Your Business Can Be Denied Access
The most significant factor affecting your business is that you can get shut out from global markets. Truthfully, in most instances, a substantial fine is not assessed. A penalty might get involved, but it will not be $5 million.
What to Do If I Have Gone into "Lapsed" Status?
If you find yourself in a situation where your registration has lapsed, it's important to know that you have options. You can renew your Legal Entity Identifier (LEI) with your previous provider or transfer it to a new provider.
Transferring your LEI from one provider to another is simple and usually free of charge. However, it's important to be aware that some providers may charge a fee for assistance with the transfer. To avoid these additional costs, consider choosing a provider that offers a fast and cost-effective transfer process.
It's also important to remember that there's no need to panic; simply choose a provider and renew your LEI as soon as possible.