International Securities Identification Number
An International Securities Identification Number (ISIN) is a code that uniquely identifies a security globally for the purposes of facilitating clearing, reporting and 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.
"ISIN" redirects here. For other topics, see Isin (disambiguation).
ISO 6166 (or ISO6166:2021 as of the 2021 revision[4]) 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:
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. 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.
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 (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".[5][6]
In 2011, Standard and Poor's provided six undertakings[7] 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.
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 IBAN numbers which may also mix letters and digits). Some protocols require the transmission of additional check digits added to the full ISIN number.