An ISIN, or International Securities Identification Number, is a 12-character alphanumeric code that uniquely identifies a financial instrument, such as a share, bond, fund unit, warrant or derivative. It is defined by the international standard ISO 6166. An ISIN identifies the instrument itself, wherever it is traded or held, and is the identifier most widely used in trading, clearing, settlement, custody and regulatory reporting across borders.
ISINs are allocated by national numbering agencies, one for each country or territory, which are members or partners of the Association of National Numbering Agencies. The code is the cornerstone of instrument reference data and is normally the key under which a security is stored in a security master file. It sits alongside national and commercial identifiers such as CUSIP, SEDOL and the FIGI.
Structure of the code
An ISIN has three parts.
- A two-letter prefix. This is normally the country code of the issuer's country of registration or legal domicile, taken from the ISO standard for country codes. Certain prefixes are not countries: XS is used for international securities cleared through the international depositories, and a few other prefixes beginning with X or E serve special purposes.
- A nine-character national identifier. This is the security's code in the local numbering scheme, padded with leading zeros if it is shorter than nine characters.
- A single check digit. It is calculated from the preceding eleven characters and allows systems to detect most keying errors.
For example, the ordinary shares of Apple Inc. have the ISIN US0378331005. The prefix US shows a United States issuer, 037833100 is the nine-character CUSIP, and 5 is the check digit. A British security embeds its seven-character SEDOL after two zeros, and a German one embeds its national code in the same way.
Who issues ISINs
Each national numbering agency is the sole allocator for issuers in its territory. The role is performed by stock exchanges, central securities depositories, central banks, regulators or data companies, depending on the country. In the United States it is carried out by the operator of the CUSIP system, in the United Kingdom by the London Stock Exchange, and in Germany by a financial data publisher. Where a country has no agency, a substitute agency allocates on its behalf.
An issuer or its adviser applies for a code when a new security is created, supplying the offering document or terms. The agency records standard descriptive data with the code, including a classification code and a standard short name, both defined by related ISO standards. The association of agencies operates a central service that consolidates ISIN records from all members.
For over-the-counter derivatives, which have no issuer in the usual sense, a dedicated utility set up by the association has allocated ISINs in near real time since 2017, to meet European reporting rules.
How ISINs are used
- Trading and settlement. Orders, confirmations and settlement instructions identify the security by ISIN, and a central securities depository holds and transfers securities under it.
- Custody and asset servicing. Holdings statements, income payments and corporate action notices are keyed to the ISIN.
- Regulatory reporting. Under MiFID II, instruments admitted to trading on European venues must have an ISIN, and it is the identifier used in transaction reporting. Rules on short selling, fund holdings, securities financing and central bank collateral use it too.
- Issuance. A new bond or share issue cannot be accepted for clearing without one, so obtaining the ISIN is an early step in bond issuance and listings.
- Data management. Vendors and firms use the ISIN to link prices, ratings and issuer information, including the issuer's legal entity identifier; the bodies responsible for the two standards publish a mapping between them.
History
National numbering schemes developed separately from the 1960s. The ISIN standard was first published in 1981 to give them a common wrapper, but take-up was slow until 1989, when a report by the Group of Thirty on clearing and settlement recommended its adoption worldwide. The association of numbering agencies was founded in 1992 to coordinate allocation and promote the standard. Regulatory mandates in Europe in the 2000s and 2010s made the ISIN effectively compulsory for listed instruments there.
Limitations
An ISIN identifies an instrument, not a place of trading. A share listed on several exchanges, in several currencies, carries one ISIN, so a price or a trade is fully identified only by adding a market identifier code and a currency, or by using a venue-level identifier such as a ticker symbol or SEDOL. This matters for pricing and settlement, where the line of stock traded in one market may not be interchangeable with another without a transfer between depositories.
An ISIN can change during a security's life. Corporate events such as a share split, a change of domicile or a merger commonly result in a new code, and systems must link old and new. The code itself carries no information about the terms of the instrument. Finally, because many ISINs embed a national number that is subject to licensing, access to and redistribution of the data can involve fees, which has been a source of regulatory complaints and has encouraged interest in open identifiers.