Lucknow. In the global business landscape, transparency is no longer just a regulatory requirement, but is becoming an important sign of trust and responsible corporate governance. In this context, the trend of voluntary adoption of Legal Entity Identifier (LEI) is increasing rapidly, which the industry is seeing as the new standard of corporate ethics.
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Until now LEI was taken to meet regulatory requirements, but in recent years many companies have started adopting it without any compulsion. According to industry analysts, this change reflects the thinking in which transparency is not being considered a burden but a strategic advantage.
G20 – Global background on the FSB initiative
The foundation of the LEI system was laid on the recommendations of the G20 countries and the Financial Stability Board (FSB) following the 2008 global financial crisis. Its objective was to ensure clear and uniform identification of legal entities involved in cross-border financial transactions and their ownership structures. Today LEIs are seen as a fundamental mechanism for global financial transparency, monitoring systemic risk and curbing illicit financial activities.
Increase in companies voluntarily adopting LEI
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LEI International Private Limited, a GLEIF accredited LEI issuer and a wholly owned subsidiary of TNV Global Limited. Company director Prajnesh Kumar Singh said that in recent times there has been a significant increase in the number of companies voluntarily applying for LEI.
According to him, voluntary adoption of LEIs has now become a clear indication of good corporate governance. This not only increases the confidence of regulators, but also strengthens trust with investors, banks and global business partners.
New identity of corporate ethics
LEI is a 20-digit globally recognized alphanumeric code, which ensures unique identification of legal entities involved in financial transactions. Companies that voluntarily adopt it clearly demonstrate their commitment to transparency, ethical conduct and accountability. Such companies are also enjoying benefits like better working relationships with banks, faster onboarding process and greater credibility in international markets.
Expanding scope in various areas
LEI registrations are continuously increasing around the world and its use is no longer limited to regulated financial institutions only. Companies in cross-border trade, digital commerce and other emerging sectors are also voluntarily adopting LEIs. The Global Legal Entity Identifier Foundation (GLEIF) also continues to emphasize that the LEI system plays an important role in strengthening market transparency and financial stability.
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Major reasons for voluntary adoption
According to experts, companies are voluntarily adopting LEI because it builds trust without asking for it, is in line with global policy direction, reflects corporate responsibility and ensures better preparation for changing regulatory standards in the future.
Symbol of honesty and trust
As global financial systems demand greater transparency, voluntary adoption of LEIs is becoming a hallmark of ethical corporate culture. What was once considered merely a regulatory step has now become a symbol of integrity, credibility and responsible business in the global marketplace.
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