International Securities Identification Number (ISIN)

What is ISIN Number?

The International Securities Identification Number (ISIN Code) is a universal code designed to efficiently facilitate cross-border trading. It is assigned to instruments by National Numbering Agencies (NNAs), who are responsible for assigning ISINs in their respective countries.

The ISIN Number  is a 12 digit alphanumeric code that uniquely identifies stocks, bonds, and other securities. It has been adopted in many countries as the definitive way of identifying these securities and is quickly becoming the global standard in identifying them. ISIN numbers are more precise than their alternatives such as ticker symbols, and play an important role in helping to meet the goal of global straight-through processing (GSTP), the electronic handling of trade clearing and settlement without manual intervention. They are also used by custodians to track the holdings of institutional investors in a format which is consistent across markets worldwide.

One example of an alternative securities identification system is the CUSIP number, owned by the American Bankers Association and operated by Standard & Poor’s. In the United Kingdom,  the Stock Exchange Daily Official List (SEDOL) is often used.

Structure of the ISIN

ISIN IdentifierISO Country CodeLocal IdentifierCheck
First 2 digitsNext 9 digitsLast Digit

A two-letter country code is used to identify the country of incorporation of a company or security, as delineated by the International Organization for Standardization (ISO). This code, drawn from ISO 6166, is typically assigned according to the location of a company’s head office. However, a different code designation, ‘XS’ is used for international securities cleared through pan-European clearing systems such as Euroclear and Clearstream. For depository receipts, the ISIN code is unique in that the country code is assigned to the receipt issuer, not the underlying security.

A National Securities Identifying Number (NSIN) is a nine-digit numeric identifier that is assigned by each country’s or region’s governing body in order to uniquely identify securities. If a national number contains less than nine digits, it is padded with leading zeros to bring the total up to nine, as the NSIN must be nine digits in length. The number itself has no intrinsic meaning, it is simply a serial number used to identify and distinguish individual securities.

A check-digit is a single digit used to validate a sequence of numbers or characters. It is typically the last character in the sequence and is used to verify that the sequence is genuine and not counterfeit. The check-digit is calculated using a sum modulo 10 algorithm, which takes the preceding 11 characters/digits into account. This algorithm helps to protect against fraud by validating the authenticity of the sequence.

ISO rules govern designation of the ISO Country Code:

  • For Equity Issues: the country where the entity is incorporated.
  • For Domestic Debt Issues: the country where the lead manager is located.
  • For International Debt Issues: the country where the Central Securities Depository is located.

Applying for an ISIN Code

Obtaining an ISIN Number (International Securities Identification Number) or a CUSIP Number (Committee on Uniform Securities Identification Procedures) number is a necessary step to take when a company is looking to raise capital. In order to do so, the company must draft the proper documentation. For a public company, this is typically a prospectus, while for a private company, it is usually a private placement memorandum or an offering memorandum. Once the documentation is complete, the company can then apply for the correct code from the issuing authority in order to gain access to capital markets.