International Securities Identification Numbering

The International Securities Identification Number (ISIN) is a 12-character alpha-numerical code that identifies uniquely a security (debt instruments such as bonds; share instruments such as equities and collective investments; options; futures; warrants) on the financial markets. This international norm allows a financial intermediary to identify easily the considered security and its associated movements. This identifying number generally accompanies the security description and prospectus.

Confronted with the growing number of financial securities, worldwide organizations decided to attribute a unique number to identify each international financial security. Indeed, the national numbers were generally limited to the considered country and unusable internationally. This standardization enables a uniform and unified financial instruments classification system in order to improve market efficiency (leading to more accuracy and to more effective settlement and clearing). Furthermore, this codification allows the streamlining of back-office routines.

The ISIN does not contain information about the specificities of the considered financial instrument but only identifies the security. However, the securities are not perfectly identified because the ISIN code does not generally specify the exchange place of the selected security (contrary to a ticker symbol).

The Association of National Numbering Agencies (ANNA) was formed in 1992 with 22 National Numbering Agencies. The three main goals of this association, defined in the standard ISO 6166, are to promote, maintain, and develop the ISIN standard. And one of ANNA's key tasks is to improve its general communication to all market investors. ANNA is the registration authority for the allocation of ISINs. ANNA comprises 77 organizations (number of full members in July 2008) handling the functions of National Numbering Agencies, i.e., they assign ISINs to stocks and other financial instruments in their countries. The two main international numbering agencies in Europe are Euroclear Bank S.A./N.V. and Clearstream Banking. Therefore, these agencies are authorized to assign ISINs for securities issued in specific European countries and they are obliged to make available the information to all securities market participants.

The structure of an ISIN code is described by norm 6166 of the International Organization for Standardization (ISO). An ISIN code has traditionally three parts: a prefix composed of two letters identifying the issuing country of the security (for instance, FR for a security issued in France, and US for a security issued in the United States), a basic number formed by nine characters (letters and/or digits), and a final single check digit.

For example, BE0003796134 is the Dexia ISIN code where BE is the country code. These two first letters indicate that the country of the issuer is Belgium. The following characters, 000379613, formed the original CUSIP (Committee on Uniform Securities Identification Procedures) number, and the last character, 4, is the check digit. The CUSIP number can be itself decomposed in three parts: The first part is a four-character code identifying the issuer, the second part is a three-character code identifying the type of asset, and the third part (two characters) identifies the security issuance. Note that the SEDOL (which is a seven-character code) is also a part of the security's ISIN and is used for securities issued in the United Kingdom.

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