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 to be renewed annually. Failing to renew your LEI can bring many inconveniences and at times become quite costly to your business.
What Does It Mean to Be “Lapsed?”
All businesses must renew their LEI registration every year on the day they initially registered. Failure to do so moves the company from “Active” status to “Lapsed” status. This can impact your business in many ways.
You Can Be Fined
Failure to renew your registration can lead to severe penalties. Even major corporations have failed to keep their status updated and paid the price for it. For example, Morgan Stanley has assessed a $5 million fine for failing to update information related to the LEI.
Your organization may not face this type of stiff penalty, but it clearly is not worth the risk.
Your Business Can Be Denied Access
The biggest factor affecting your business is that you can be shut out from global markets. Truthfully, in most instances, a significant fine is not assessed. There may be a fine involved, but it is not going to be $5 million.
What to Do If I Have Gone into “Lapsed” Status?
There are times when you may have let your status lapse. Life happens, and that is understood. If this does occur, then you will need to renew your LEI with your previous service provider or transfer your LEI to a new chosen partner. The great thing is that the system was designed to make transferring your LEI from one provider to another a quick and simple process. It is also free to do so.
You may be charged by some providers to assist you with the LEI registration. Many take advantage of the free transfer options by choosing an LEI service provider that is faster and cheaper than other providers.
The most important thing to realize is that you do not need to panic. This organization understands that there are mistakes that are made. It is the continual violators that get fined heavily. So, get back on track and do not worry.