Everything you need to know about the DORA LEI in one place.

What is the DORA LEI

Under the Digital Operational Resilience Act (DORA), Information and Communication Technology (ICT) companies providing critical services to financial entities must comply with stringent regulatory standards.

A key requirement of these standards is the use of a Legal Entity Identifier (LEI). Thus we have coined the phrase DORA LEI.

This ensures that ICT service providers are uniquely and consistently identified, facilitating enhanced oversight and risk management.

By adopting LEIs, these companies help improve the transparency and resilience of the financial system.

Why do ICT Companies Need an LEI under DORA?

1. Transparency and Traceability:

LEIs help regulators and financial entities track the relationships between different entities, providing greater transparency in the financial ecosystem. For ICT companies, this means their involvement and roles in providing critical services can be easily identified and monitored.

2. Third-Party Risk Management

DORA emphasizes robust risk management practices concerning third-party ICT service providers. Financial entities must ensure that these providers can be reliably identified and assessed for potential risks. The LEI enables a standardized identification system, making it easier for financial entities to manage and report third-party risks.

3. Incident Reporting

In case of significant ICT-related incidents, financial entities are required to report to regulatory authorities. Having an LEI helps in the accurate identification of involved entities, ensuring clarity and consistency in incident reports.

4. Regulatory Compliance and Oversight

Regulators can more effectively oversee and enforce compliance with DORA when all critical ICT service providers have an LEI. This standardized identifier allows for streamlined data collection, analysis, and regulatory supervision.

How ICT Companies Obtain an LEI.

1. Application Process :

The application process involves completing an online registration form with business details and submitting the required document. If you require a DORA LEI. quickly complete your DORA LEI code registration, and receive your LEI number within 1 hour.

2. Renewal and Maintenance

The DORA LEI will need to be renewed , renewal is the process of updating your DORA LEI record and confirming that the LEI is still in use. Many regulators require an ACTIVE LEI code , and if the LEI is not renewed within 60 days of its expiry date the status will change to LAPSED.

Addressing Common Misconceptions

1. Scope of DORA

DORA applies not only to EU-based firms but also to non-EU entities providing services to EU financial institutions must also comply with DORA requirements This means that a fintech company or an IT consultancy in Silicon Valley, if serving EU financial clients, will need to meet DORA’s regulatory standards.

This broadens the regulatory reach to encompass global service providers, ensuring that all entities regardless of the geographical location comply with regulations when conducting business in the European Union.

2. Broad Mandate Beyond Cybersecurity

DORA covers all aspects of digital operational resilience , including data protection , system robustness , infrastructure resilience , and recovery from disruptions.

Incident Response and Recovery requires structured incident response plans and comprehensive disaster recovery and business continuity plans.

Recommendations for firms under DORA.

1. Conduct a GAP analysis

Identify areas where current practices fall short of DORA requirements and plan necessary improvements.

2. Examine Current Practices

Review and enhance ICT systems , processes , and controls to align with DORA's standards.

3. Engage Legal and Compliance Terms

Involve legal and compliance experts to develop a robust compliance strategy well ahead of the January 2025 deadline.

4. Develop a Comprehensive Compliance Program

Create a detailed roadmap for achieving and maintaining DORA compliance, including timelines and responsibilities.

5. Enhanced Documentation and Certifications

Keep thorough records of ICT risk management practices and pursue relevant certifications like ISO 27001 to demonstrate adherence to best practices and regulatory expectations.