International Securities Identification Number (ISIN)

International Securities Identification Number is a 12 character alpha numeric code that uniquely identifies securities, across the world. The securities include shares, bonds, warrants etc. Securities with which ISIN can be used include debt securities, shares, options, derivatives and futures.

The ISIN Organization manages International Securities Identification Number. ISIN uniquely identify a securities – its structure is defined in ISO 6166. Securities for which ISIN are issued include bonds, commercial papers, equities and warrant. Think of it as a serial number that does not contain information characterizing financial instruments but rather serves to uniformly identify a security for trading and settlement purposes.

ISIN constitutes of three parts. It has three components – a pre-fix, a basic number and a check digit. The pre-fix is a two letter country code as stated under ISO 6166 (IN for India). The country code is followed by a 9-character alpha-numeric national security identification code assigned to a security by the governing bodies in each country. This is followed by a single character check digit, which will validate the ISIN code.

In India, SEBI has delegated the assigning of ISIN of various securities to NSDL. For securities getting admitted on CDSL, the ISIN is allotted to those securities on receiving request from the CDSL. Allotment of ISIN for G-sec is done by Reserve Bank of India.

Example: ISIN INE 475C 01 012

·        IN: India

·        E – Company time

·        First four digits, 475C – Company serial number

·        01 – Equity (It can be mutual fund units, debt or G-securities)

·        01 – Issue Number

·        Last two digits, 2- Check digit.

The Third digit (E in the above example) may be E, F, A, B or 9. Each one carries the following meaning:

·        E – Company

·        A – Mutual Fund unit

·        A – Central govt. security

·        B – State govt. security

·        9 – Equity shares with rights which are different from equity shares bearing INE number.

In an ISIN number, it is important to pay special attention to the third digit. In a time when trading securities across the geographical boundaries of countries has become common, having a unique identifier for a security greatly helps traders as well as brokers in a various countries to unambiguously identify and trade a security.