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An International Securities Identification Number (ISIN) uniquely identifies a security. Its structure is defined in ISO 6166. The ISIN code is a 12-character alphanumeric code that serves for uniform identification of a security through normalization of the assigned National Number, where one exists, at trading and
settlement Settlement may refer to: * Human settlement, a community where people live *Settlement (structural), the distortion or disruption of parts of a building *Closing (real estate), the final step in executing a real estate transaction *Settlement (fin ...
.


History

ISINs were first used in 1981, but did not reach wide acceptance until 1989, when the G30 countries recommended adoption. The ISIN was endorsed a year later by ISO with the ISO 6166 standard. Initially information was distributed via CD-ROMs and this was later replaced by distribution over the internet. In 2004 the European Union mandated the use of instrument identifiers in some of its regulatory reporting, which included ISIN as one of the valid identifiers.


Description

'' ISO 6166'' (or ISO6166:2013 as of the 2013 revision) defines the structure of an International Securities Identification Number (ISIN). An ISIN uniquely identifies a fungible security. Securities with which ISINs can be used are: * Equities (shares, units, depository receipts) * Debt instruments ( bonds and debt instruments other than international, international bonds and debt instruments, stripped coupons and principal, treasury bills, others) *Entitlements (
rights Rights are legal, social, or ethical principles of freedom or entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people according to some legal system, social convention, or ethical theory ...
,
warrants Warrant may refer to: * Warrant (law), a form of specific authorization ** Arrest warrant, authorizing the arrest and detention of an individual ** Search warrant, a court order issued that authorizes law enforcement to conduct a search for eviden ...
) * Derivatives (
options Option or Options may refer to: Computing *Option key, a key on Apple computer keyboards *Option type, a polymorphic data type in programming languages *Command-line option, an optional parameter to a command *OPTIONS, an HTTP request method ...
, futures) *Others (commodities, currencies, indices, interest rates) ISINs consist of two alphabetic characters, which are the ISO 3166-1 alpha-2 code for the issuing country, nine alpha-numeric characters (the National Securities Identifying Number, or NSIN, which identifies the security, padded as necessary with leading zeros), and one numerical
check digit A check digit is a form of redundancy check used for error detection on identification numbers, such as bank account numbers, which are used in an application where they will at least sometimes be input manually. It is analogous to a binary parit ...
. They are thus always 12 characters in length. When the NSIN changes due to corporate actions or other reasons, the ISIN will also change. Issuance of ISINs is decentralized to individual national numbering agencies (NNAs). Since existing national numbering schemes administered by the various NNAs form the basis for ISINs, the methodology for assignment is not consistent across agencies globally. An ISIN cannot specify a particular trading location. Another identifier, typically a MIC ( Market Identifier Code) or the three-letter exchange code, will have to be specified in addition to the ISIN for this. The currency of the trade will also be required to uniquely identify the instrument using this method.


Usage and acceptance

Since 1989, when ISINs were introduced, they have slowly gained traction worldwide in their usage. ISINs are being introduced worldwide and are the most popular global securities identifier. Trading, clearing and settlement systems in many countries have adopted ISINs as a secondary measure of identifying securities. Some countries, mainly in Europe, have moved to using the ISIN as their primary means of identifying securities. In addition new European regulations such as
Solvency II Solvency II Directive 20092009/138/EC is a Directive in European Union law that codifies and harmonises the EU insurance regulation. Primarily this concerns the amount of capital that EU insurance companies must hold to reduce the risk of insolv ...
increasingly require the ISIN to be reported.


Commercial model

The ISIN is generally included in services sold by financial data vendors and intermediaries. These services are normally paid services as more value added data is included with the information. In general, the issuer of a security will include the ISIN in issuance papers or other documentation for identification purposes.


Controversy

In 2009, Standard & Poor's was charged by the
European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
(EC) with abusing its position in licensing international securities identification codes for United States securities by requiring European financial firms and data vendors to pay licensing fees for their use. "This behaviour amounts to unfair pricing," the EC said in its statement of objections which lays the groundwork for an adverse finding against S&P. "The (numbers) are indispensable for a number of operations that financial institutions carry out – for instance, reporting to authorities or clearing and settlement – and cannot be substituted". In 2011, Standard and Poor's provided six undertakingshttp://ec.europa.eu/competition/antitrust/cases/dec_docs/39592/39592_2152_5.pdf to the European Commission to remedy the situation. The agreement is applicable to all consuming companies in the European Economic Area. These expired at the end of 2016.


Examples

The examples below describes one approach for applying the Luhn algorithm on two different ISINs. The difference in the two examples has to do with if there are an odd or even number of digits after converting letters to number. Since the NSIN element can be any alpha numeric sequence (9 characters), an odd number of letters will result in an even number of digits and an even number of letters will result in an odd number of digits. For an odd number of digits, the approach in the first example is used. For an even number of digits, the approach in the second example is used. The Luhn algorithm can also be applied in the same manner for both types or lengths (alternating multiply the string of digits by 1 and 2, starting from the end of the string), being more generic.


Apple, Inc.

Apple, Inc.: ISIN US0378331005, expanded from CUSIP 037833100 The main body of the ISIN is the original CUSIP, assigned in the 1970s. The country code "US" has been added on the front, and an additional check digit at the end. The country code indicates the country of issue. The check digit is calculated using the Luhn algorithm. Convert any letters to numbers by taking the ASCII code of the capital letter and subtracting 55: U = 30, S = 28. US037833100 -> 30 28 037833100 Collect odd and even characters: 3028037833100 = (3, 2, 0, 7, 3, 1, 0), (0, 8, 3, 8, 3, 0) Multiply the group containing the rightmost character (which is the FIRST group) by 2: (6, 4, 0, 14, 6, 2, 0) Add up the individual digits: (6 + 4 + 0 + (1 + 4) + 6 + 2 + 0) + (0 + 8 + 3 + 8 + 3 + 0) = 45 Take the 10s modulus of the sum: 45 mod 10 = 5 Subtract from 10: 10 − 5 = 5 Take the 10s modulus of the result (this final step is important in the instance where the modulus of the sum is 0, as the resulting check digit would be 10). 5 mod 10 = 5 So the ISIN check digit is five.


Treasury Corporation of Victoria

TREASURY CORP VICTORIA 5 3/4% 2005-2016: ISIN AU0000XVGZA3. The check digit is calculated using the Luhn algorithm. Convert any letters to numbers by taking the ASCII code of the capital letter and subtracting 55: A = 10, G = 16, U = 30, V = 31, X = 33, Z = 35. AU0000XVGZA -> 10 30 0000 33 31 16 35 10. Collect odd and even characters: 103000003331163510 = (1, 3, 0, 0, 3, 3, 1, 3, 1), (0, 0, 0, 0, 3, 1, 6, 5, 0) Multiply the group containing the rightmost character (which is the SECOND group) by 2: (0, 0, 0, 0, 6, 2, 12, 10, 0) Add up the individual digits: (1 + 3 + 0 + 0 + 3 + 3 + 1 + 3 + 1) + (0 + 0 + 0 + 0 + 6 + 2 + (1 + 2) + (1 + 0) + 0) = 27 Take the 10s modulus of the sum: 27 mod 10 = 7 Subtract from 10: 10 − 7 = 3 Take the 10s modulus of the result (this final step is important in the instance where the modulus of the sum is 0, as the resulting check digit would be 10). 3 mod 10 = 3 So the ISIN check digit is three.


BAE Systems

BAE Systems: ISIN GB0002634946, expanded from SEDOL 000263494 The main body is the SEDOL, padded on the front with the addition of two zeros. The country code "GB" is then added on the front, and the check digit on the end as in the example above.


Check-digit flaw in ISIN

The Treasury Corporation of Victoria ISIN illustrates a flaw in ISIN's check digit algorithm which allows transposed letters: Suppose the ISIN was mis-typed as AU0000VXGZA3 (instead of AU0000XVGZA3) A = 10, G = 16, U = 30, V = 31, X = 33, Z = 35. "AU0000VXGZA" -> 10 30 00 00 31 33 16 35 10". Collect odd and even characters: 103000003133163510 = (1, 3, 0, 0, 3, 3, 1, 3, 1), (0, 0, 0, 0, 1, 3, 6, 5, 0) Multiply the group containing the rightmost character (which is the SECOND group) by 2: (0, 0, 0, 0, 2, 6, 12, 10, 0) Add up the individual digits: (1 + 3 + 0 + 0 + 3 + 3 + 1 + 3 + 1) + (0 + 0 + 0 + 0 + 2 + 6 + (1 + 2) + (1 + 0) + 0) = 27 Take the 10s modulus of the sum: 27 mod 10 = 7 Subtract from 10: 10 − 7 = 3 Take the 10s modulus of the result (this final step is important in the instance where the modulus of the sum is 0, as the resulting check digit would be 10). 3 mod 10 = 3 So the ISIN check digit is ''still'' three even though two letters have been transposed. Such flaw against a single transposed pair of letters or digits would have been avoided using two check digits instead of just one (i.e., a 97 modulus instead of the 10 modulus, like in
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numbers which may also mix letters and digits). Some protocols require the transmission of additional check digits added to the full ISIN number.


See also

*
Approved Publication Arrangement With MiFID II directive being in force in January 2018, Approved Publication Arrangements (APA) data should increase transparency in the OTC markets by publishing quotes for pre-trade transparency, and trades for post-trade transparency. An APA ...
* Central Index Key * CUSIP *
ISO 10383 ISO is the most common abbreviation for the International Organization for Standardization. ISO or Iso may also refer to: Business and finance * Iso (supermarket), a chain of Danish supermarkets incorporated into the SuperBest chain in 2007 * Is ...
* ISO 10962 * LEI * NSIN *
Request for quote A Request for Quote (RfQ) is a financial term for certain way to ask a bank for an offer of a given financial instrument from a bank, made available by so-called Approved Publication Arrangement (APA) by the stock markets itself or by Financial data ...


References


External links


ISIN
at the
International Organization for Standardization The International Organization for Standardization (ISO ) is an international standard development organization composed of representatives from the national standards organizations of member countries. Membership requirements are given in A ...

ISIN History
– describes in detail ISIN code history {{ISO standards Financial metadata Financial regulation ISO standards Security identifier types