About International Securities Identification Numbers (ISIN)
ISIN Structure
There are three parts to an ISIN as exemplified by US-049580485-1 (the dashes don't count, they are there to add clarity). The code can be broken down as follows:
A two-letter country code, drawn from a list (ISO 6166) prepared by the International Organization for Standardization (ISO). This code is assigned according to the location of a company's head office. A special code, 'XS'. is used for international securities cleared through pan-European clearing systems like Euroclear and CEDEL. Depository receipt ISIN usage is unique in that the country code for the security is that of the receipt issuer, not that of the underlying security.
ISIN Use
ISINs were once considered only a secondary form of security identification, used exclusively for clearing and settlement. In recent years, some European countries have adopted ISINs as their primary security identifier. An offering memorandum or an prospectus is often required to obtain an ISIN. ISIN's are implicitly used in the U.S. and Canada because they are built upon CUSIP numbers. Over time, most countries appear willing to adopt ISIN numbering either as a primary or secondary identifier to administer ISINs.
CUSIP (owned by the American Bankers Association and operated by Standard & Poor's) and its work with a CUSIP number. Similarly in the U.K., the Stock Exchange Daily Official List (SEDOL). ISIN.org has no affiliation with either organization. In additon, ISIN.org has no affiliation with the association of national number agencies, (ANNA) or any national number agency (NNA).
Universal acceptance of ISIN is important in meeting the goal of global straight-through processing (GSTP), which is the electronic handling of the trade clearing and settlement without manual intervention. ISINS are used by share custodians to track holdings of institutional investors in a format which is consistent across markets worldwide.
Know this about ISINs...
Securities with which ISINs can be used include debt securities, such as notes or bonds as well shares, such as common stock or shares of a fund, options, derivatives and futures. The ISIN identifies a security. An ISIN should not be confused with a ticker symbol which identifies the stock at the exchange level. For instance, IBM common stock trades through almost 25 trading platforms and exchanges worldwide. IBM stock has different ticker symbols depending on where it is traded, but has only a single ISIN for each security. The ISIN code acts an identifier for the securities and as such is the only common denominator securities identification number that is universally recognized. ISINs are used for numerous reasons such as for clearing and settlement.
History of ISINs
ISINs were first used in 1981, but didn't reach wide acceptance until 1989, when the G30 countries recommended adoption. A year later it was endorsed by the ISO. The Global ISIN Access Mechanism was developed in 1994 to facilitate the electronic exchange of ISIN information across the different regions. Annais charged with the implementation and availability of ISIN throughout the world. To that end, they have worked out an information exchange process named GIAM-2, which uses the Internet and CD-ROM technologies.