Parent company data when applying for an LEI number
When applying for an LEI number, you must provide second-level data in addition to the company’s basic details. This shows whether the company has a consolidating parent, or gives the reason why parent company data isn’t being provided.
Parent company data helps describe the company’s ownership structure and answers the question of which companies are connected to one another. If the parent company has an LEI number, the relationship between parent and subsidiary can be publicly verified in the GLEIF database.
What does second-level data mean?
LEI data is divided into two levels.
Level one data describes the company itself: its trading name, address, country of registration and legal form. This data answers the question of who is who.
Level two data describes the company’s relationship with its parent. It answers the question of who owns whom, or which legal entity consolidates the company’s financial results.
If the parent company has an LEI number, the LEI data of the parent and subsidiary are linked in the GLEIF database. This creates a public overview of which companies belong to the same group.
Direct and ultimate parent
The LEI application distinguishes between a direct and an ultimate parent.
The direct parent is the nearest legal entity that consolidates the applicant company’s financial results in its own consolidated accounts.
The ultimate parent is the legal entity at the top of the group that prepares the consolidated annual accounts and which the applicant company also belongs to.
It’s important to note that the LEI system isn’t based solely on the size of a shareholding. The parent relationship is determined by accounting consolidation. As a result, the application may need to include consolidated annual accounts showing the relationship with the parent.
At LEI Universal, the document submitted to confirm the parent relationship must have been issued within the last two years. Confirming parent company data costs €10 per parent company per year and can take up to 48 hours.
If there is no parent, or the data can’t be disclosed
Not every company has a parent within the meaning of the LEI system. For example, a company may be controlled by an individual or owners for whom no consolidated accounts are prepared. In this case, parent company data isn’t provided; instead, the relevant exception reason is noted in the application.
An exception may also be needed if the parent company doesn’t have an LEI number, or if disclosure of the data is restricted by a legal obstacle, a contractual restriction, a lack of consent, or another reason that makes disclosure impossible.
The exception reason must be clearly stated in the application.
Why is parent company data requested?
Parent company data also makes the LEI number useful for checking group relationships. It allows anyone to see, from the public LEI database, which company consolidates which, and whether related companies hold LEI numbers.
This matters to banks, financial service providers, supervisory authorities and companies that check a counterparty’s background or assess group-related risks.
For investment funds, second-level data can also describe fund relationships, such as the fund manager and the structure of umbrella and sub-funds. Read more: Applying for an LEI number for a fund.
Frequently asked questions
Does every company have to provide parent company data?
Every LEI number applicant must provide second-level data. If there is no parent within the meaning of the LEI system, a suitable exception reason must be noted instead of parent company data.
Which document confirms the parent relationship?
The parent relationship is usually confirmed by consolidated annual accounts showing that the parent consolidates the applicant company’s financial results.
Is parent company data public?
If parent company data is submitted and confirmed, the relationship is published in the GLEIF LEI database. If the data isn’t provided due to an exception, the relevant exception reason is reflected in the LEI data instead.
What’s the difference between a direct and an ultimate parent?
The direct parent is the nearest consolidating parent. The ultimate parent is the consolidating parent at the top of the group.