View source for International Securities Identification Number

{{short description|Identifier for a security}}
{{redirect|ISIN|other topics|Isin (disambiguation)}}
{{pp|small=yes}}
{{primary sources|date=June 2024}}
An '''International Securities Identification Number''' ('''ISIN''') is a code that uniquely identifies a [[security (finance)|security]] globally for the purposes of facilitating [[clearing (finance)|clearing]], reporting and [[Settlement (finance)|settlement]] of trades. 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 (finance)|settlement]].

==History==
ISINs were first used in 1981, but did not reach wide acceptance until 1989, when the [[Group of Thirty|G30 countries]] recommended adoption.<ref>{{cite web |title=Coordinated Portfolio Investment Survey Guide, Second Edition, International Monetary Fund, 2002, Washington DC - Appendix VII: International Securities Identification Number (ISIN) Code System |url=http://www.imf.org/external/pubs/ft/cpis/2002/pdf/cpis_index.pdf |url-status=live |archive-url=https://web.archive.org/web/20170614080658/http://www.imf.org/external/pubs/ft/cpis/2002/pdf/cpis_index.pdf |archive-date=2017-06-14 |access-date=July 10, 2019 |website=©2002 International Monetary Fund |publisher=imf.org |language=en-US |format=PDF}}</ref> The ISIN was endorsed a year later by ISO with the ISO 6166 standard.

Initially information was distributed via [[CD-ROM]]s and this was later replaced by distribution over the internet.{{cn|date=June 2024}}

ISINs slowly gained traction worldwide and became the most popular global securities identifier. Trading, clearing and settlement systems in many countries adopted ISINs as a secondary measure of identifying securities. Some countries, mainly in Europe, moved to using the ISIN as their primary means of identifying securities. European regulations such as [[Solvency II Directive 2009]] increasingly require the ISIN to be reported.<ref>{{cite web |url=https://dev.eiopa.europa.eu/Taxonomy/Full/2.0.1/EIOPA_XBRL_Filing_Rules_for_Solvency_II_reporting_2.0.1.pdf |title=EIOPA XBRL Filing Rules for Solvency II reporting |access-date=2016-07-20 |url-status=live |archive-url=https://web.archive.org/web/20161007121238/https://dev.eiopa.europa.eu/Taxonomy/Full/2.0.1/EIOPA_XBRL_Filing_Rules_for_Solvency_II_reporting_2.0.1.pdf |archive-date=2016-10-07 }}</ref>

In 2004, the European Union mandated the use of instrument identifiers in some of its regulatory reporting with ISIN as one of the valid identifiers.<ref>{{cite web|url=http://data.europa.eu/eli/reg/2004/809/oj/eng|title=Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements (Text with EEA relevance)|website=europa.eu}}</ref>

== Description ==

''[[International Organization for Standardization|ISO]] 6166'' (or ISO6166:2021 as of the 2021 revision<ref>{{cite web |title=ISO 6166:2021 |url=https://www.iso.org/standard/78502.html |website=ISO |publisher=International Organization for Standardization |access-date=14 February 2024 |language=en}}</ref>) defines the structure of an International Securities Identification Number (ISIN). An ISIN uniquely identifies a [[Security (finance)#Fungible and non-fungible security|fungible security]].

Securities with which ISINs can be used are:
*[[Stock|Equities]] (shares, units, depository receipts)
*[[fixed income|Debt instruments]] ([[Bond (finance)|bonds]] and debt instruments other than international, international bonds and debt instruments, stripped coupons and principal, treasury bills, and others)
*Entitlements ([[Pre-emption right|rights]], [[Warrant (finance)|warrants]])
*[[Derivative (finance)|Derivatives]] ([[Option (finance)|options]], [[Futures contract|futures]], and [[exchange-traded fund]]s)
*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]]. They are thus always 12 characters in length. When the NSIN changes due to corporate actions or other reasons, the ISIN will also change. 

An ISIN does not specify a particular trading location. Typically a [[Market Identifier Code|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.{{cn|date=June 2024}}

==Who assigns==
Each country has a [[national numbering agency]] responsible for issuing ISINs. Often these are national [[stock exchange]]s, [[central bank]]s, but also [[financial regulator]]s or financial data provider or [[Clearing house (finance)|clearing house]]s and rating agencies. A global governing body is the Association of National Numbering Agencies (ANNA).<ref>{{Cite web |url=https://anna-web.org/ |website=Association of National Numbering Agencies}}</ref>

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.{{cn|date=June 2024}}

==Commercial model==
{{unreferenced section|date=June 2024}}
The ISIN is included in services sold by [[financial data vendors]] and intermediaries. The issuer of a security will include the ISIN in issuance papers or other documentation for identification purposes. These services are paid services as more value added data is included with the information of the ISIN.{{OR|date=June 2024}}

== Controversy ==
In 2009, [[Standard & Poor's]] was charged by the [[European Commission]] (EC) with abusing its position in licensing international securities identification codes for United States [[securities]] by requiring European [[financial firm]]s 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&nbsp;&ndash; for instance, reporting to authorities or clearing and settlement&nbsp;&ndash; and cannot be substituted".<ref>{{cite web
 |url         = http://www.securitiestechnologymonitor.com/news/-24275-1.html
 |title       = EC Charges S&P With Monopoly Abuse
 |date = November 19, 2009 |first1= Chris |last1=Kentouris
 |website = Securities Technology Monitor
 |url-status     = dead
 |archive-url  = https://web.archive.org/web/20110716033737/http://www.securitiestechnologymonitor.com/news/-24275-1.html
 |archive-date = 2011-07-16
}}</ref><ref>{{cite web
 |url         = http://www.finextra.com/news/fullstory.aspx?newsitemid=20768
 |title       = European Commission Accuses S&P of Monopoly Abuse over Isin Fees
 |year        = 2009
 |editor      = Finextra
 |url-status     = live
 |archive-url  = https://web.archive.org/web/20110312100847/http://www.finextra.com/news/fullstory.aspx?newsitemid=20768
 |archive-date = 2011-03-12
}}</ref>

In 2011, Standard and Poor's provided six undertakings<ref>{{Cite web |title=Commission Decision of 15.11.2011 relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the EEA Agreement (Case COMP/39.592 - Standard & Poor's) |url=https://ec.europa.eu/competition/antitrust/cases/dec_docs/39592/39592_2152_5.pdf |website=European Commission}}</ref> 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 ==
{{unreferenced section|date=June 2024}}
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.|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==
{{original research|section|date=June 2024}}
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 AU0000'''VX'''GZA3 (instead of AU0000'''XV'''GZA3)

: 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 [[International Bank Account Number|IBAN]] 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]]
* [[Central Index Key]]
* [[CUSIP]]
* [[ISO 10383]]
* [[ISO 10962]]
* [[Legal Entity Identifier|LEI]]
* [[NSIN]]
* [[Request for quote]]
* [[Ticker symbol]]
* [[System for Award Management]]

==References==
{{reflist}}

==External links==
{{Wikidata property|1=P946}}
* [https://www.iso.org/standard/78502.html ISIN] at the [[International Organization for Standardization]]
* [http://www.anna-web.org/standards/isin-iso-6166/  ISIN History] {{Webarchive|url=https://web.archive.org/web/20210926101726/http://www.anna-web.org/standards/isin-iso-6166/ |date=2021-09-26 }} &ndash; describes in detail ISIN code history

{{International numbering standards|state=uncollapsed}}
{{ISO standards}}

[[Category:Financial metadata]]
[[Category:Financial regulation]]
[[Category:ISO standards]]
[[Category:Security identifier types]]