International Securities Identification Number (ISIN) is an essential system implemented to identify a specific securities issue. We have covered the following topics in this article:
The International Securities Identification Number or ISIN Code is a unique code that is used to identify securities. The National Numbering Agency (NNA) – a country-specific establishment – is responsible for allocating ISINs for all the securities issued in the country.
1. History of ISIN System
The ISIN numbering system dates back to the year 1981. However, it wasn’t widely used until the year 1989. That year, the Group of 30 (G30) nations called for all their members to adopt the numbering system and use it to distinguish between various investment tools. A year later, the International Organisation for Standardisation (ISO) joined the Group and started using the ISO 6166 standard as its reference. Until the year 2000, the ISIN code data was distributed using disks till transmission via the internet. In the year 2004, the ISIN code became extremely important when the European Union (EU) mandated the use of the system for significant regulatory reporting needs.
2. Main Features of the ISIN
All those involved in trading securities internationally have to use the ISIN numbering scheme. In that sense, the ISIN numbering is the de facto standard to trade securities. The United States and Canada, however, use the CUSIP numbering system that is similar to ISIN.
The main features of this system are as follows:
a. Twelve-character numbering
An ISIN code is a 12-digit alphanumeric number. This is how the numbering code is broken down:
i. First two letters of the ISIN code refer to the country in which the issuing company is based out of.
ii.The next nine digits identify specific security and act as a unique identifier.
iii. The final character also referred to as the ‘check digit’ checks forgery.
For instance, here’s an ISIN number for an Indian company’s stock certificate:
On the other hand, a company located in the US could have an ISIN, which appears as US-000K0VF05-4.
b. Computer-generated code to protect against counterfeiting
The nine digits of the ISIN which are security-specific codes are computer-generated using a complex formula. The code is critical in preventing counterfeiting and forgery.
c. Governed by the International Organization for Standardization (ISO)
International Organization for Standardisation (ISO 6166) currently defines the structure of the ISIN system. At present, the law states that an ISIN can be attributed to most forms of securities, which includes (but is not limited to) equity shares, units, depositary receipts; debt instruments (bonds, stripped coupons, and principal amounts), T-bills; derivatives; commodities, and currencies.
3. ISIN in India
In India, the task of issuing ISIN for various securities has been assigned by the Securities and Exchange Board of India (SEBI) to the National Securities Depository Limited (NSDL). For the government securities, the allotment of the ISIN code is regulated by the Reserve Bank of India (RBI).
The NSDL was established in August 1996, under the aegis of the Depositories Act, 1996. You can use the NSDL website
to look up and verify ISIN codes.